A short advisory transcript from a speaker giving pricing strategy advice to freelancers and small business owners: measure your closing rate (people who move forward after phone conversations) and, if it is above 40%, raise prices because high close rates often indicate prices are too low and limit margin needed to scale beyond freelancing.
Above 40%
If you're closing more than 40% of the people that you're talking to on the phone, it's typically because your prices are too low. And a lot of people do this when they're starting out, a lot of freelancers, because they are worried about people not saying yes to them. And so if you can focus on looking at how many people you're talking to, reverse engineering, okay, of those people that I talk to, how many of them actually move forward and then turning that and figuring out what that percentage is. If you are above 40% closing rate, your prices should be going way up, because if you don't charge those higher prices, what likely happens is you don't have the margin to hire people because you're thinking like a freelancer, not thinking like a business owner.
