Why Your Close Rate Should Probably Be 50%, Not 75%
Closing more jobs isn't the same as making more money. Here's the math that changes how you price every bid.
Closing more jobs isn't the same as making more money. Here's the math that changes how you price every bid.
Most contractors treat close rate like a scoreboard. High close rate means good. Low close rate means bad. A contractor closing 90% of his bids thinks he's crushing it. A contractor closing 40% thinks he's got a problem.
Both of them are wrong.
Close rate is a lever, not a grade. It responds directly to price — move the price up, close rate drops; move the price down, close rate climbs. The question isn't how high you can push it. The question is what number you should land on, given what every extra job actually costs you to do.
I ran this math on my own pricing recently and it flipped my thinking. The contractor answer isn't 80% or 90%. It's probably closer to 50%.
Here's why.
Here are the close rates I see at three different price points for a house wash on a typical 2,500 square foot home in my market:
$0.25 per square foot — 50% close rate
$0.20 per square foot — 65% close rate
$0.15 per square foot — close to 100% close rate
Pick the rate. Pick what you close at that rate. Let's run the month.
Ten house wash bids in a month. 2,500 square feet each.
Scenario A: $0.25 × 10 bids × 50% close = 5 jobs. Revenue: $3,125.
Scenario B: $0.20 × 10 bids × 65% close = 6.5 jobs. Revenue: $3,250.
Scenario C: $0.15 × 10 bids × 100% close = 10 jobs. Revenue: $3,750.
At first glance Scenario C wins. More jobs, more revenue, highest close rate. The "close more to make more" instinct confirmed.
But that's revenue, not profit. And revenue is the wrong number to chase.
Every extra job closed is an extra job done. Every extra job done consumes time, crew hours, fuel, chemicals, equipment wear, and a slice of your indirect cost.
The $0.15 scenario with 10 jobs requires me to actually do 10 jobs. Each of those jobs takes labor, fuel, and chemicals — the direct costs. But each one also burns through an hour and change of indirect cost — the $59.63 per hour it costs me to operate as a business whether or not the truck moves.
If each house wash takes roughly 1.25 hours from start to finish, here's what the indirect cost allocation looks like:
Scenario A (5 jobs): 5 × 1.25 hours × $59.63/hr = $373 in indirect cost
Scenario B (6.5 jobs): 6.5 × 1.25 × $59.63 = $485
Scenario C (10 jobs): 10 × 1.25 × $59.63 = $745
The difference between Scenario A and Scenario C in indirect cost is $372. That's $372 more in fixed-cost allocation the cheaper pricing is eating. Direct costs (labor, fuel, chemicals) scale similarly — more jobs means more materials, more crew hours, more miles on the truck.
Now the revenue picture looks different. The $625 extra revenue from closing 10 jobs instead of 5 is being chased down by the extra cost of doing 5 more jobs. Closer to break-even than a win. Sometimes negative.
Meanwhile Scenario A — fewer jobs, higher price, lower close rate — leaves half the bids on the table and still produces more take-home in many cost structures than Scenario C.
That's the insight contractors don't have until they run this math. More closed jobs isn't free. Every close has a cost. And when the price drop outpaces the margin, the additional volume isn't making you money — it's making you busy.
Before the close-rate math works, the underlying pricing has to be anchored in something real.
Every bid I run starts with measurement. For a house wash, I pull heated square footage plus garage plus any other surface I'm cleaning from the tax assessor's site. Cross-check against Google Earth. Physical walk-through if something looks off. The square footage is the anchor.
I multiply that anchor by a per-square-foot rate — $0.25, $0.20, $0.15 — and the price comes out of the math. The same is true for a roof (everything under roof, even if it's not a true roofing takeoff), for a commercial building (measured surface area, not square footage from a tax card), for a paver driveway (measured footage plus strip and reseal add-ons).
All pricing is anchored in measurement. That's the non-negotiable foundation. A contractor who eyeballs a house and picks a number he feels good about can't reliably move his close rate up or down — he doesn't know what he's moving off of.
Once the measurement is the anchor, moving $0.05 per square foot either direction is a calibrated flex, not a guess. You know what you're adjusting. You know what your floor is. You know what your cost structure requires.
Pricing by feel doesn't let you have this conversation at all. Pricing by measurement is what makes the close-rate math possible.
There are situations where dropping the price and closing more jobs actually makes more money. I run into them regularly. The difference is whether the lower price unlocks something that wasn't available at the higher price.
When flex-down works: commercial bulk and recurring work.
I do flat work at Daytona State College at $0.10 per square foot. Soft wash at $0.12. That's about half my standard residential rate. I've made $120,000 from that one client over two years. Even at that price, when I do the work myself, I'm running 50 to 55 percent true margin.
The reason it works: the jobs are big, the property is predictable, I'm not spending drive time between stops, the process is dialed in from repetition, and the revenue is recurring. The per-hour margin on a $0.10 commercial job, done efficiently on a known property, is often higher than the per-hour margin on a $0.25 residential job where I'm driving across town.
When flex-down works: recurring residential with route density.
A first house wash at $300 might turn into a quarterly maintenance at $150 per visit. Four visits a year at $150 = $600 per customer per year. That's $250 more per year than a single $350 wash. And once I have five customers on the same street running the same quarterly schedule, I'm making $750 in one morning on a tight route. The price dropped. The margin didn't.
When flex-down is the trap: one-off residential bids with no route density, no repeat business potential, and no efficiency gain.
This is the $0.15 scenario from the close-rate math. You're dropping your price to win more bids, but every bid you win is an isolated job — a drive, a setup, a breakdown, a full allocation of indirect cost. You're closing more and earning less per hour on every close.
The test: does the lower price buy me something structural? More volume on the same property, recurring revenue, route efficiency, operational simplification? If yes, drop the price. If no, hold firm and let the close rate drop — because the bids you're losing were the ones that would have lost you money if you'd won them.
Most contractors who price too low are pricing against a fear, not a market.
The fear is scarcity — the belief that if I don't win this bid, there won't be another one. That if I raise my price, I'll lose jobs I can't afford to lose. That the phone might stop ringing tomorrow. That every yes is precious and every no is a threat.
A contractor operating from scarcity will drop his price to close the bid in front of him, even when the math says he shouldn't. He'll rationalize it — "I need the revenue," "I can make it up on volume," "at least I'll have work on the calendar" — and he'll end the year wondering why revenue was strong and take-home was thin.
The contractor operating from confidence believes what he does has value, that more work is coming, and that losing the bid in front of him isn't the end of anything. He prices at his real number. He closes at a rate that matches the value he provides.
Scarcity drops your prices. Confidence holds them. The law of supply and demand is real — if you're closing less than 50% of your work, you may be priced too high or you may not be offering enough value. If you're closing 90%, you're almost certainly too cheap.
The sweet spot for most contractors is probably somewhere between 50 and 65 percent. High enough that you're winning the right jobs. Low enough that you're not leaving money on every bid you send.
When a contractor runs this math on his own business, a few things happen.
He stops celebrating his high close rate. A 90% close rate stops being a badge of honor and starts being a signal that he's underpriced.
He stops panicking about his low close rate. A 40% close rate stops being a failure and starts being a diagnostic — maybe the price is too high for the value, maybe the value isn't being communicated, or maybe the price is exactly right and he's being selective about the work he takes.
He stops making flex-down decisions in the dark. When he considers dropping his price by $0.05 a square foot, he can quantify what that move costs him in margin and whether the volume increase pays for it.
He stops chasing the biggest number on the invoice and starts chasing the biggest number in the take-home.
That's what close-rate math does when you pair it with true margin visibility. It stops being about winning. It starts being about keeping.
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