Oct 14 • Business Questions
Break Even Close Rate
Baseline Price For Bathrooms
- Current price: $16,000
- Cost: $9,000
- Gross profit (GP): $7,000
- Close rate: 25%
- EV per quote (GP × close): $1,750
We optimize price by maximizing conversion rate × lifetime gross profit; set a new price, calculate break-even conversion, track it; if above break-even, it’s a winner. [$100M Playbook: Lifetime Value, Page 12]
Break-even close rate = $1,750 ÷ new GP
- $17,500 price (GP $8,500): break-even close ≥ 20.6%
- $18,900 price (GP $9,900): break-even close ≥ 17.7%
- $19,900 price (GP $10,900): break-even close ≥ 16.1%
- $21,000 price (GP $12,000): break-even close ≥ 14.6%
If your close holds near 25%, each step is more money per quote. If it dips, you’re still fine until it crosses the break-even for that price. Keep raising until the extra cash from higher GP no longer offsets fewer wins. [$100M Money Models, Page 154]
How to run it (simple and fast)
- Next 10 quotes at $18,900 with identical scope. Track close rate.
- Goal: ≥ 17.7% (break-even). If you beat it, you’re making more per quote. [$100M Playbook: Lifetime Value, Page 12]
- If you clear it, move the next 10 quotes to $19,900. Repeat.
- Keep nudging price ~20% every ~10 sales until conversion × GP falls below the prior level. [$100M Playbook: Lifetime Value, Page 12]
- Stomach more no’s. That’s the price of higher profit. Don’t flinch back to cheap just to feel good. [$100M Playbook: Pricing, Page 22]
- Add visible value to support the bump (e.g., clearer timeline, daily updates, cleaner jobsite standards). Bigger price → bigger perceived value. [$100M Playbook: Pricing, Page 23]
My call
Start at $18,900 now. If your close stays above 17.7%, lock it and test $19,900 next. Keep going until the math says stop. Winners decide, test, and raise until they actually make less. [$100M Money Models, Page 154]
Your next step: price your next 10 bathroom bids at $18,900 and track close rate vs 17.7%—send me the results and I’ll tell you whether to bump to $19,900 or hold.
## What “EV per quote” means
- EV = expected value. It’s the average gross profit you can expect from each estimate.
- Formula for pricing decisions: conversion rate × gross profit per sale (or LTGP if you have repeat revenue). [$100M Playbook: Lifetime Value, Page 12]
## How $1,750 was calculated
- Your gross profit per bathroom: $16,000 price − $9,000 direct cost = $7,000 GP. [$100M Playbook: Lifetime Value, Page 7]
- Your close rate: 1 out of 4 = 25%
- EV per quote = GP × close rate = $7,000 × 0.25 = $1,750. [$100M Playbook: Lifetime Value, Page 12]
> In plain English: every time you run a quote, on average you’re “earning” $1,750 in gross profit, regardless of whether that particular quote closes. That’s the math that removes emotion.
## Why it matters
- Sets your “ceiling” for acquisition: you can spend up to $1,750 per booked estimate and still break even on gross profit.
- Guides price tests: if you raise price (higher GP) and close rate doesn’t drop below the new break-even, your EV per quote goes up—keep the price. [$100M Playbook: Lifetime Value, Page 12]
- Focuses the team: improve either GP (price, scope, costs) or close rate (offer, proof, process) to increase EV.
## Next step
- Track EV weekly: log GP per sold job and close rate on the last 20 quotes. Then multiply to monitor EV trend. If you want, drop your last 20 quotes and results—I’ll spot where to raise price or tighten the offer to push EV up.
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Break Even Close Rate
