ACV vs PLG
ACV (Annual Contract Value) and PLG (Product-Led Growth) both come up in business conversations and get confused. Here's the plain-English difference, side by side, so you can use each one with confidence.
The key difference: ACV refers to annual contract value, while PLG refers to product-led growth — they describe different things even when they show up in the same sentence.
ACV — Annual Contract Value
The annualized value of a single customer's contract, excluding one-time fees. Used to size deals and segment customers.
PLG — Product-Led Growth
A go-to-market strategy where the product itself drives acquisition, conversion, and expansion — usually via free trials, freemium, or self-serve.
When to use ACV
Reach for "ACV" when the conversation is specifically about annual contract value. The annualized value of a single customer's contract, excluding one-time fees. Used to size deals and segment customers.
When to use PLG
Reach for "PLG" when the conversation is specifically about product-led growth. A go-to-market strategy where the product itself drives acquisition, conversion, and expansion — usually via free trials, freemium, or self-serve.
FAQs
What is the difference between ACV and PLG?
ACV stands for Annual Contract Value — The annualized value of a single customer's contract, excluding one-time fees. Used to size deals and segment customers. PLG stands for Product-Led Growth — A go-to-market strategy where the product itself drives acquisition, conversion, and expansion — usually via free trials, freemium, or self-serve.
Are ACV and PLG the same thing?
No. They're often used in the same conversation because they're related, but they describe different concepts. ACV = Annual Contract Value. PLG = Product-Led Growth.
When should I use ACV vs PLG?
Use ACV when you're specifically referring to annual contract value. Use PLG when the topic is product-led growth.