Deal value is a basic concept in sales work and commission calculation. It covers the economic value of a single sales order, i.e. how much a specific deal is worth in dollars.
In practice, deal value is used to measure the significance of a sale and to calculate commission. When a seller closes a deal, deal value is often the number that forms the basis for calculating the bonus or commission. Typically, the higher the deal value, the greater the reward.
For management, deal value provides a clear picture of how much each order contributes to the company's total revenue. In CRM systems, deal value is a key factor for prioritizing pipeline, forecasting earnings, and analyzing performance.
However, one should pay attention to whether deal value is always inserted into the CRM in the same way in some cases one inserts ARR, some sellers may insert an accumulated ARR over the entire contract period. For example, if the seller closes a 3-year deal for ARR 12,000 then 3 * 12,000 = 36,000 is inserted into the deal value. It is important to apply the numbers consistently.