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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 percent 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 going to break down why that is if you're returning listen to the 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 on the show I've never done a solo podcast episode I either have a guest or a co-host on every single episode so this is much different than usual second I'm in Bali right now matter of fact actually is a third here because I'm outside right now 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 may be 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 of sum everything up we had a 30 plus hour flight from Nashville over to Southeast Asia 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 honestly we've been mostly working like I've been really productive which is the whole point of this trip this is not a vacation like people hear us going to Bali for like we call it just going to buy for the fall or going to Southeast Asia for the fall we don't have a return trip plan we don't have no one we're gonna be back but this is not supposed to be a vacation for us we're just working being inspired we're still doing cool stuff like just recently we did this whole like full day adventure for Airbnb where we like went to this Temple to like 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 these bathing pools which is disgusting and I got something called Bali belly 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 there but we just ran into moped we've been like puttering around seeing different cool stuff we've seen tons of rice fields of some monkeys we went to Monkey Forest here and the thing that's probably been I wouldn't say disappointing it's actually been cool but also unfortunate it's like so much rain like we transitioned into an early rainy season here in Bali like usually the it's not until end of October or early November before they start transitioning in it's like man we had like flooding yesterday landslides yesterday this week in Bali because of all the rain so 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 Thai Islands there then we should go up North for the Lantern Festival you've probably seen this before where they release lanterns into the air that just like thousands of lanterns in the air I think that Festival is on November 9th so we'll be up in Chiang Mai Thailand for that so if you're up in Chiang Mai 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 this 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 a co-host to kind of like go back and forth on and haven't asked 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 the thing I want to 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 going to 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 things where I'm just talking it 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 because 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 or not even sales calls 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 going to 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 under charging 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 want to know how to price your projects just go to six figurecreative.com pricing I have a whole calculator and guide there to help you set your rates if your rates are are too low people will tend to hire you more and so we have the scarcity mentality as Freelancers where we want to capitalize on 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 death sentence for Freelancers because when you're always busy and always broke you don't have any chance of fixing this what I'd 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 in 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 back 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 going to be in that place if you're not now you will be eventually so I honestly I want to see you reject it about 50 of the time that's a healthy sweet spot if you're getting rejected more than that there's probably some room to improve 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 going to give you later on this episode I'm going to 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 sells 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 going to 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 from through low hanging fruit is a wonderful thing a 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 a sales lead is when someone says hey how much do you charge for like how much are your rates or do you have availability for what if somebody reaches out to you and they're generally 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 and 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've literally seen people brag about this I close 90 of my sales calls like instead of bragging about the 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 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 actionable is raising your rates which I already talked about raise your rates I'm going to sing this until the cows come home I'm going to keep saying this over and over again but raise your rates but only if you're getting more than ten thousand dollars 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 six thousand dollar quote request for me that was an inquiry for six thousand dollars worth of work so if I got one of those and one more client asking me for four thousand dollars worth of mixing work that's ten thousand dollars worth of inquiries in one month but if you're only getting a couple thousand dollars of inquiries in a month it's probably 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 ten thousand dollar per month in inquiries and that is start focusing on something called 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 SAS companies software as a service it is a huge Niche it is a world that has mastered the art of marketing and so 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 World SAS 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 want to see that number get to 20 to 30 to 50 up to 100 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 times if 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 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 cicadas or some version of cicadas have come out it is like dark as hell here 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 he hears these bugs in the background maybe we can get this edited out with some magic on the back end who knows to 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 that you will naturally turn into sales leads over time which will give you more opportunities to get clients which means you'll get more inquiries every single month getting above that ten thousand dollar 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 at 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're under charging for it so you work forever your dollars per hour nose dive and it's just 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 SAS companies or software as a service companies because they've mastered this art 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 by building my software companies and then bring it over to the freelance world and think how does 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 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 but yeah start building my list to episode 222 I go into depth with this a lot of detail on how to make a lead magnet all of the how do you promote it how do you build the email list I want to see you start getting 20 30 50 up to 100 marketing leads every single month and that will typically turn into five to ten inquiries every month and then that turns into clients for you three to five clients it's kind of how that tends to work out so that is basically the two takeaways one Razer rates if you're getting more than ten thousand dollars 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 High a high amount of sales opportunities 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 over at ezfunnels.io 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 they can put in their name and email address and then it'll Auto deliver the lead magnet to them easy funnels has like a booking widget similar to calendly where you can pick and 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 up away 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 recommend all 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 want to 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 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 podcast224 when you convert to a paid account that's podcast224 with no spaces and that'll give you 20 off of your easy funnels account for anyone still listening so that's easyfunnels.io