- Why “winning” too many clients is a bad thing
- The ideal close rate for your sales process
- What to do if your close rate is too high
- Avoiding the scarcity mindset of wanting to win every client
- Sales leads vs. marketing leads – and why they are important
- When to raise your rates
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[00:00:00] Welcome to the six Figure Creative Podcast. I'm your host Brian Hood, and in today's episode I'm going to break down why a high sales conversion rate, meaning you close a lot of the people you have conversations with about working with you, why a high close rate is actually a bad thing, or usually a really good sign that you have an unhealthy business in some way, shape, or form.
I've seen people brag that they have a close rate as high as 70 to 90%, meaning that out of 10 people that you talk to about a potential project, you're closing seven to nine of those people. That's actually a bad thing. And we're gonna break down why that is. If you're returning listening to this show, thank you so much for coming back again and again.
I cannot overstate how much it means to me that you trust me with your business, with helping you grow your business or helping you fix the problems that you may be experiencing right now. But if this is your first time listening to the show, this is probably not the best representation of what this podcast is.
This is a very unique show because two reasons. One is this is the first solo episode. I believe I've ever done this show. I've never done a solo podcast episode. I either have a guest or cohost on every single episode. So this is much different than usual. Second, I'm in Bali right now, matter of fact, actually [00:01:00] there's a third here because I'm outside right now.
So this is my first outdoors show. I've never been outside while recording an episode. So I'm in Bali right now on the rooftop of the resort. We're staying out here in Ubud Bali, and . There, it's like dusk right now. So all the animals and weird noises are coming out. So you're probably gonna hear some weird background stuff sorry in advance if that's the case.
But we've been out here for about four weeks in Bali. It's been a lot of time. We if you've been following me on Instagram, you maybe seen some of my Instagram stories that I've been posting. I've not been as good at that as I'd like to be. But we had, just to kind sum everything up, we had a 30 plus hour flight from Nashville over to Southeast.
One of those flights was from New York to Japan, and it was like 14 plus hours long. It was the longest flight I've ever been in my life, and it was like two hours longer than normal because we couldn't fly over Russia. For those who don't know, whenever you go from like New York to Asia, you actually fly over Alaska to get there, and you actually cross over parts of Russia.
That's the shortest path. It's not just a straight east to west flight. and it took us like 14 plus hours because of all the conflicts in Russia. So these four weeks has been a lot of fun. We, honestly, we've been mostly working like, I've been really productive, which is the whole point of this [00:02:00] trip.
This is not a vacation. Like people hear us going to Bali for like, we call it just going to Bali for the fall or going to Southeast Asia for the fall. We don't have a return trip planned. We don't have, we know when we're gonna be back. But this is not supposed to be vacation for us. We're just working, being inspired.
We're still doing cool stuff. Like just recently we, we did this whole like full day adventure for Airbnb where we like went to this temple to. Go through these cleansing pools that they have that's like a religious tradition here where you bathe in these temples. I accidentally swallowed some of the water in these bathing pools, which is disgusting.
And I got something called Bali Belly. They, it's just a thing that they call here where you have either food poisoning or something in your stomach. So all day I was just laid out yesterday I probably slept for like 15 hours yesterday. Just all said and done. If I wasn't sleeping, I was on the toilet.
Tmi. But we just rented a moped. We've been like, put puttering around seeing different cool stuff. We've seen tons of rice fields some monkeys. We went to the monkey forest here. And the thing that's probably been, I wouldn't say disappointing.
It's actually been cool but also unfortunate it is like so much rain. Like we transitioned into an early rainy season here in Bali. Like usually they, the, it's not till end of [00:03:00] October or early November before they start transitioning in. It's like, man, we had like flooding yesterday, Landslides yesterday um, this week in Bali because of all the rain.
So, uh, My wife and I were actually heading out tomorrow as the time we record this episode tomorrow to go back to Thailand. Because it's transitioning into the dry season there. So we'll be on some uh, Thai islands there that eventually go up north for the Lantern festival. you've probably seen this before, where there release lanterns into the air the, just like thousands of lanterns in the air.
I think that festival's on November 9th. So we'll be up in che my Thailand for that. So if you're up in Cheng, my Thailand, holler at me and say hi.
So that's just kind of the quick and dirty update from this trip so far. There's so much more that's happened. Like it's four weeks. I can't really sum it up in one podcast intro and, truth be told, like it's really weird just talking about myself like this at length.
Without having to co-host to kinda go back and forth on having to ask me questions. So it is what it is. You know, Like I said, this is a definitely a different type of episode. This will also probably be a shorter episode because I, the thing I wanna talk about today is just one of those like short tidbits that I think is going to hopefully change the way you think about something.
And there's still some actionables that you're gonna take away from from this episode to make change in your business. I'd rather, you know, get a short, actionable episode than to just long drawn out thing where I'm [00:04:00] just talking at in about nothing. So let's go back to what I said earlier where I said that a high sales conversion rate is typically a bad thing. I say typically cuz like it's not always a bad thing because there's a lot of gray area in this, but it's almost always a bad thing.
It's a sign that your business is unhealthy and it means that you're leaving a ton of money on the table, meaning like you could be earning way more than you're earning right now if you fix this problem, which is counterintuitive because you think, Hey, I want the highest close rate I can possibly get when I'm on these sales calls like, or not even sales call, sometimes people close through email or they meet in person, but meaning like, whenever I have an opportunity to get a new client, if I'm closing 70, 80, 90% of those people into clients, I am not doing something right.
And I'm gonna talk about that today.
So there's two reasons why a high sales conversion rate is a bad thing.
The first one is it's a sign that you are wildly undercharging. So freelancers, we're bad at setting our rates. We're notoriously bad at setting our rates. We have a lack of confidence around setting rates. We sometimes don't have any clue how to even start pricing. By the way, if you wanna know how to price your projects, just go to six figure creative.com/pricing.
I have a whole calculator and guide there to help you set your rates.
if your rates are [00:05:00] too low, people tend to hire you more. And so we have this scarcity mentality as freelancers where we want to capitalize in every single opportunity that we get. So we start bringing our prices down because last time that one sales opportunity, we got that one potential client we got, we lost them because we were too expensive.
Now this leads us into a trap. It's a trap of being always busy. Maybe having clients all the time, but you're also always broke. This is like a deaths sentence for freelancers because when you're always busy and always broke, you don't have any chance of fixing this. What I like to see in like most freelancers, you either have a ton of time and no money, and that's okay.
Like you have plenty of time to fix the things that are broken that led you to having no money, or you have tons of money and no time, which is also a wonderful place to be because you can take all of that extra money and put it into getting some of your time. Those are both completely fine places to be, but if you were ever in the place where you have no time and you have no money, that's a death sentence, and I don't want you to ever be there.
So lowering your rates to the point where you're closing, every opportunity you get is a sign that you're probably gonna be in that place. If you're not now, you will be eventually.
[00:06:00] So I honestly, I wanna see you rejected about 50% of the time. That's the healthy, sweet spot. If you're getting rejected more than that, there's probably some room to. if you're getting rejected way less than that, meaning like you're closing most of the people you talk to, then that this means it's probably time to, to raise your rates.
Now, this is not, again, this is not a blanket statement completely. There's some gray area, there's some nuance. Everyone's slightly different. And I'm gonna give you, later on in this episode, I'm gonna give you a benchmark so that you know if it's time to raise your rates. But if you're closing more than half of the sales opportunities that you're getting, then it's probably time to raise your rates. So that's the first argument why a high sales close rate is a bad thing.
But there's actually a second one, and this is sometimes what leads to this first issue, there's actually a second one, and that is you're only talking to the people who would hire you no matter what. So this one takes a little more explanation and I'm gonna do the best that I can. But if you are only getting low hanging fruit, meaning the people that were like in your circle, they're gonna hire you no matter what.
Like it's your repeat customers or referrals or friends. Or friends of friends, like these people in your small, tiny circle that's low hanging fruit. [00:07:00] Low hanging fruit's a wonderful thing, but low hanging fruit is not enough to sustain you long term. It's not enough to scale, to grow to make it to six figures.
In order to get past that, there's something we have to do. So if you're only getting low hanging fruit, that typically means you're gonna have a high sales conversion rate. And I typically see this when people are only doing something I call sales lead generation. They're only generating sales leads. So really quick, let me tell you what a sales lead is and then I'll tell you what to do instead of that.
The sales lead is when someone says, Hey, how much do you charge for blank? How much are your rates? Or do you have availability for what? If somebody reaches out to you and they're genuinely expressing interest in working with you, This is someone who's a sales lead, Now, sales leads are not a bad thing, but they're Typically the like lowest hanging fruit of all, and you're ignoring what you actually need to be focused on things that will turn into way more sales opportunities than sales leads.
So there's actually two actionables that I want you to take away from this episode. instead of bragging about these vanity metrics, like I, I've literally seen people bragging about this I close 90% of my sales calls. Like instead of bragging about this stuff that does not matter whatsoever.
I want you to start making these changes, these necessary changes in order to be healthy business because again, [00:08:00] rejection is a necessary part of doing what we do. And I want you to get rejected more if you're closing too many clients. So let's talk about the two actionables, the first action. Is raising your rates, which I already talked about.
Raise your rates. I'm gonna sing this until the cows come home. I'm gonna keep saying this over and over again, but raise your rates, but only if you're getting more than $10,000 per month of inquiries. So when someone says, like in my world, in the production world, Hey Brian, how much would it cost for you to mix 10 songs?
I might say something like that, six grand. So that was a $6,000 quote request for me. That was an inquiry for $6,000 worth of work. So if I got one of those and one more client asking me for $4,000 worth of mixing work, that's $10,000 worth of inquiries in one month. But if you're only getting a couple thousand dollars of inquiries in a month, it's not, not quite time for you to raise your rates quite yet because you're not getting enough opportunities of potential clients to close.
So how do you do that? That leads us to the second, the second takeaway from this episode. The second action from this episode, to get you above that $10,000 per month and inquiries, and that is start focusing on something called [00:09:00] marketing leads instead of just sales leads. This actually comes back from something in the software world, because for those of you who don't know me I have two software companies. They are software as a service, SaaS companies, software as a service. It is a huge niche. it is a world that has mastered the art of marketing and so that they call customer acquisition, which is where I get the term client acquisition from.
I talk about it all the time on this podcast, but in the customer acquisition, SaaS companies have turned this stuff into a science. They've turned the art of getting customers from an art into a science. So they have these two terms.
One is called marketing qualified leads. The other is called sales qualified leads. MQL and SQLs. So to sum this up for everyone listening right now, a marketing lead is just someone who has signed up for a lead magnet. A sales lead is someone who has expressed interest in working with you. So my takeaway is for you to focus on getting marketing leads. You probably have zero marketing leads every month right now.
I wanna see that number. Get to 20, to 30 to 50, up to a hundred per month at least. And depending on what your strategy is, sometimes to get to that number, you have to do paid ads. And sometimes if [00:10:00] you have a good content marketing engine, sometimes social media. But ideally, I want you to start building a mailing list. Now, we talked about this in depth at episode 222. Go back and listen to that episode if you want more on how to build an email list. that's my marketing. Platform of choice. I've generated over 75,000 leads in my email list over the past few years.
And I'm gonna get off topic for a second here. It's now these like cadas or some version of Cadas have come out. It is like dark as hell.
Since I started this episode, the lighting has gone down. So my apologies to the YouTube viewers right now, and my apologies to anyone listening to here's these bugs in the background. maybe we can get this edited out with some magic on the back end. Who knows? Bring this back to us. The simplest way to think about a marketing lead versus a sales lead is a marketing lead has signed up for something to get, like a mailing list or they have joined your newsletter or something like that. A sales lead is someone who's expressed explicit interest in working with you directly.
So I want you to start focusing on marketing leads because the more you start focusing on marketing leads, they will naturally turn into sales leads over time, which will give you more opportu. To get clients, which [00:11:00] means you'll get more inquiries every single month getting above that $10,000 per month of inquiries that threshold so that you can start to raise your rates.
It's like this, it's this weird like virtuous cycle where if you don't have enough inquiries coming in, you start lowering your rates. Every single opportunity you get, you bring it lower and lower because you have to close it this time and then, you get the work you fulfill in the work. You stay busy all the time.
You can't market your business because you're busy with that work and you under, you are undercharging for it. So you work forever, your dollars per hour nose dive and it's just, it's a really difficult cycle to get out of. So by doing what software as a service companies have mastered at this point, because there, there are no billionaire or billion dollar freelance companies that I'm aware of, no billion dollar freelance agencies, but there are absolutely billion dollar SaaS companies or softwares and service companies because they've mastered this.
Of customer acquisition, I want you to take away that you as a freelancer can steal these concepts for yourself and implement them into your business. That's a lot of what I do in on this podcast is take away things I've learned while building my software companies and then bring it over to the freelance world and think, how does [00:12:00] this pertain to freelance businesses?
Because we have not become sophisticated enough, or we typically are not sophisticated as business owners, especially not in the way that software as a service companies are. This is what I want you to focus on. Just build in a mailing list. That's it. At the end of the day, build a damn mailing list.
Episode 222. We talked about this at great length. again, sorry for anyone listening right now, if there's like bugs and weird things happening in the background again, being on a rooftop in Bali at dusk, it's like dark now. If you're watching this on YouTube, you see how much darker it's gotten since I started this episode.
Yeah, start building a mailing list. Episode 2 22. I go into depth with this. A lot of d detail on how to make a lead magnet. All of the, how do you promote it? How do you build the email list? I wanna see you start getting 20, 30, 50, up to a hundred marketing leads every single month, and that will typically turn into five to 10 inquiries every month. And then that turns into clients for you, three to five clients. That's kind of how tends to work out. So that is basically the two takeaways. One, raise your rates if you're getting more than $10,000 of inquiries each month.
Two, build a mailing list. That's really it. a third would be stop bragging about having a high close rate, especially if your rates are too low or if you're not getting [00:13:00] high, a high amount of sales opportu. So I'll leave you off with this. If you are wanting to build an email list and you don't know where to start I would highly encourage you to go sign up for a free trial of Easy Funnels firstname.lastname@example.org.
That's my website builder. And in there, there are you can build websites in it. You can build funnels in it where you can promote your lead magnets or give away your lead magnets where it can put in their name and email address, and then it'll auto deliver the lead magnet to 'em. Easy Funnels has like a booking widget similar to Calendly, where you can they can book time on your schedule or book time on your calendar or book meetings with you. And most importantly, it has all of the email marketing and email automation stuff built into it. So if you're trying to give a way a lead magnet and then auto deliver that, and you want a series of emails to be dripped out to them over the next six to 12 days, which is what I re.
All of this stuff is built into easy funnels, and we all already have templates built into that to where you can just it's already built out. You just need to write the emails and put them into there. if you are interested in doing that, I wanna go ahead and give you a coupon code to get 20% off.
So here's how you get that. If you want 20% off of easy funnels, you just sign up for free trial. You don't have to have a credit card or anything. Pick a template if you [00:14:00] want to use one of our templates that we have, or just start from scratch, if you're like a designer, And if you like how it all works and you want to actually turn it into a paid account, use coupon code podcast 2 24 when you convert to a paid account, that's Podcast 2 24 with no spaces, and that would give you 20% off of your Easy Funnels account.
For anyone still listening,
that's Easy funnels.io.
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