Definition
TCV is the total signed contract value over the full term (often includes recurring plus one-time items depending on your definition).
How to use it
- Use TCV to understand total signed value and contract scope.
- Use ACV/ARR to understand recurring run-rate.
Common mistakes
- Comparing TCV to ARR/MRR without normalizing for contract length.
- Treating services-heavy contracts as recurring run-rate.
Why this matters
This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.
Practical checklist
- Write a 1-line definition for "TCV (Total Contract Value)" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Sanity-check with a related calculator from the same category on MetricKit.
- Document common pitfalls so the metric doesn't get gamed.
Where to use this on MetricKit
Calculators
- LTV Sensitivity Calculator: See how gross profit LTV changes as churn and gross margin vary (simple 3x3 sensitivity).
- LTV:CAC Calculator: Compute LTV:CAC ratio and CAC payback using ARPA, gross margin, churn, and CAC.
- CAC Payback Period Calculator: Estimate how many months it takes to recover CAC (months to recover CAC) using gross profit.
- CAC Payback Sensitivity Calculator: See how CAC payback months change as ARPA and gross margin vary (simple 3x3 sensitivity).
- Churn Rate Calculator: Calculate customer churn rate for a period and compare retention across segments or cohorts.
Guides
- LTV sensitivity: how churn and margin change LTV: A practical guide to LTV sensitivity: vary churn and gross margin to see how gross profit LTV changes under realistic scenarios.
- CAC Payback Period (Months to Recover CAC): definition, formula, benchmarks: Learn how to calculate CAC payback (months to recover CAC) using gross profit, plus benchmarks and levers to improve it.
- CAC payback sensitivity: ARPA * margin scenarios (months to recover CAC): A practical guide to CAC payback sensitivity: vary ARPA and gross margin to see how months to recover CAC changes under realistic scenarios.
- Churn: How to measure churn rate correctly: A guide to churn rate: customer churn vs revenue churn, measurement choices, and how to track churn by cohort.
- Gross revenue churn: definition, formula, and how to calculate it: Gross revenue churn explained: contraction + churned MRR relative to starting MRR, with monthly-equivalent conversion and pitfalls.