3 Reasons Why Knowing Your Close Rate Can Keep Your Business Alive

Jordan Evans

7 months ago

In this blog post, you’ll learn what a close rate is, how to calculate it, and why it’s one of your most important numbers.

Utilizing Close Rates Can Save Businesses

I talk to hundreds of new business owners every year, and let me tell you—the ones who know their average close rate are usually the ones who have the highest budgets, the biggest teams, and know what they want. If you’re in the home services industry and you’re not tracking your close rate, you’re flying blind. With 50% of small businesses failing during their first 5 years, flying blind is not an option.

What is a Close Rate?

A close rate is how many leads you turn into jobs (close) vs. how many leads you get. For example, if I got 100 leads and turned 45 into paying jobs, I’d have a 45% close rate.

What is a Good Close Rate?

Many sources say the average close rate in the U.S. is 20%. But there’s no evidence we could find to back this up. At 99 Calls, we think your closing rate should be MUCH higher if you’re getting leads with us. Your business’s close rate is going to depend on 3 things: lead quality, skill level of the sales team, and unique value proposition.

Lead quality is one of the main reasons you need to track your closing rate. If all the leads from Source A don’t close, but 70% of the leads from Source B close, you should move funds from Source A to Source B. Not all leads close at the same rate. Knowing which leads have a higher close rate & ROI will help your business succeed

Your sales team, whether that means 30 people or you in your truck, matters. If you answer calls 90% of the time, you may get 90% more leads. If the sales team doesn’t answer calls, isn’t helpful to prospects, or is rude to customers, etc, you’re gonna have a close rate problem.

Unique Value Propositions (UVPs) are what set you apart from competitors. Do you offer free estimates, have a cool promotion, or have 200 5-star reviews? UVPs are why customers pick you vs. the company across the street. Make sure that you showcase your value in sales calls.

If you’re not already calculating your close rate, you’re a hard sell. We’re used to that. Which is why here are 3 huge reasons to know your close rate:

Reason 1: You Can Track Which Lead Sources Are Worth It

Let’s say you’re getting leads from three different sources: Google Ads, SEO, and Facebook. If you’re not tracking close rates, all you’ll see is the number of leads and maybe your cost per lead.

But when you track your close rate by source, you can calculate your actual cost per booked job, not just cost per lead.

20 leads from Google Ads at $40 each = $800
20 leads from Facebook at $20 each = $400

Which one’s better?

Well, if you close 25% of Google Ads leads, you booked 5 obs at $160/job.
If you close 10% of Facebook leads, you’ve booked 2 jobs at $200/job.

Google Ads wins.

Close rate gives you the truth behind your marketing ROI.

Reason 2: You Can Fine-Tune Your Sales Process

Some salespeople are better on the phone. Others are great at in-home estimates. Maybe your team closes 30% when you offer on-the-spot pricing, but only 10% when you say, “We’ll send a quote later.”

Knowing your close rate helps you figure out:

Which scripts, pitches, or offers close better
Whether discounts or bundles help increase jobs
How each team member is performing

For example, you might notice that offering a 10% discount doesn’t actually increase sales. In that case, stop giving away margin. But if a discount boosts close rates from 15% to 25%, it may be worth making that part of your offer.