Why Your High Close Rate Is Costing You Money
If everyone's saying yes, something's wrong with your pricing.
By Tracy Collins | The Profitable Contractor Blog | Profit Clarity Group
Quick Answer
A healthy close rate for HVAC, plumbing, and electrical contractors is between 40% and 60%. If you're closing 80% or more of your bids, it usually means your pricing is too low. Raising your prices — even if your close rate drops — almost always results in more profit, fewer jobs, and less stress.
You're booking almost every job. Your schedule is packed. Customers say yes before you even finish the proposal.
Sounds like a dream, right?
Here's the truth most contractors don't want to hear: if you're closing 80% or more of your bids, your pricing is almost certainly too low.
That high close rate isn't a sign that you're a great salesman. It's a sign that you're the cheapest option — and that's a position no contractor should want to be in.
What Does a Healthy Close Rate Actually Look Like?
Industry data across the trades consistently points to the same range: a healthy close rate for HVAC, plumbing, and electrical contractors falls between 40% and 60%.
That means if you bid 10 jobs, you should be winning 4 to 6 of them. Not 8. Not 9.
Here's what those numbers actually mean at each level:
Below 30% close rate: Your pricing may be too high, or there's a disconnect in your sales process. Could also mean you're attracting the wrong leads — price shoppers who were never going to buy from you anyway.
40–60% close rate: The sweet spot. You're priced competitively, your value proposition is landing, and you're leaving room for profit. Some customers will choose a cheaper option, and that's exactly what should happen.
70%+ close rate: Red flag. Customers aren't pushing back, aren't comparing, aren't negotiating. That usually means one thing: you're underpriced.
85%+ close rate: You're almost certainly losing money on some of those jobs when you factor in your full costs.
Why Does This Happen?
Most contractors set their prices based on one of three things:
1. What the competition charges. But you have no idea what their overhead, labor burden, or profit goals look like. Their number has nothing to do with your number.
2. What "feels" right. A gut feeling based on years in the trade. The problem is your gut doesn't know what your workers' comp rate went up to this year, or what your true cost per truck is.
3. Fear of losing the job. This is the big one. You'd rather win the job at a thin margin than lose it to someone else. So you shave a little here, round down a little there — and over time, you've trained your entire market to expect you at a discount.
None of these methods account for your actual costs. And that's where the problem starts.
What Does the Math Actually Look Like?
Let's walk through a simplified example.
Say you're an HVAC contractor. You bid 20 jobs in a month and close 18 of them — a 90% close rate. Your average ticket is $1,200. That's $21,600 in revenue. Feels pretty good.
But what if your true cost per job — including labor burden, materials, truck costs, overhead allocation, and your own compensation — is $1,050? That means you're netting $150 per job. On 18 jobs, that's $2,700 in gross profit for the month.
Now imagine you raised your prices by 20%. Your average ticket goes to $1,440. Your close rate drops to 55% — you're now closing 11 out of 20 jobs. Some customers balk at the price. A few go with someone cheaper.
But here's the math:
Before: 90% Close Rate
18 jobs × $150 profit
= $2,700/month
After: 55% Close Rate
11 jobs × $390 profit
= $4,290/month
That's 59% more profit from 39% fewer jobs.
You're running fewer trucks, burning less fuel, putting less wear on your techs, spending less on scheduling and admin — and taking home more money. This isn't theoretical. This is the math I walk contractors through every week.
The Close Rate Gut Check
Here's a quick exercise. Pull up your numbers from last month and answer these questions:
✅ How many jobs did you bid?
✅ How many did you close?
✅ What's your average ticket?
✅ Do you know your true cost per job — including labor burden, overhead, and your own pay?
If you can't answer that last question, your close rate is basically meaningless — because you don't actually know whether those jobs made you money or cost you money.
What Is a "Lost" Bid Really Telling You?
When a customer says no to your price, most contractors take it personally. They think they did something wrong.
But a lost bid at the right price is a good thing. It means:
→ You're holding your margin
→ You're not racing to the bottom
→ That job would have cost you profit if you'd won it at a lower number
→ Someone else gets to lose money on that customer instead of you
The goal isn't to close every job. The goal is to close the right jobs at the right price — and that means some people need to say no.
How Do You Start Fixing This?
If your close rate is running high and you suspect your prices are too low, here's where to start:
Step 1: Know your numbers. Calculate your true labor burden — wages plus payroll taxes, workers' comp, and benefits. Most contractors underestimate this by 20–35%.
Step 2: Calculate your real overhead. Rent, insurance, trucks, fuel, software, office costs, phone, marketing — all of it. Divide that by the number of jobs you run. That's your overhead cost per job.
Step 3: Add owner compensation. If you're not building a real salary for yourself into your pricing, you're subsidizing your customers' projects with your own paycheck.
Step 4: Set your markup based on your actual numbers. Not based on what your competitor charges. Not based on a gut feeling. Based on what it actually costs you to run your business and what you need to take home.
Step 5: Raise your prices and track your close rate. If it drops to 50–60%, you're right where you need to be. If it barely moves, raise them again.
The Bottom Line
A high close rate feels like winning. But in the trades, it's usually a sign that you're giving away profit on every single call.
The contractors who build real wealth aren't the ones who close every job. They're the ones who know their numbers, price accordingly, and are perfectly comfortable hearing "no" from the customers who can't afford what quality work actually costs.
Your close rate is a pricing thermometer. If everyone's saying yes, it's time to turn up the heat.
Not sure what your pricing should actually be?
My 4-week Pricing Foundations program walks you through your real numbers — labor burden, overhead, breakeven, and markup — so you can stop guessing and start pricing for profit.
Frequently Asked Questions
What is a good close rate for HVAC contractors?
A healthy close rate for HVAC contractors is between 40% and 60%. If your close rate is consistently above 70–80%, it typically indicates your pricing is too low and you're leaving profit on the table with every job you run.
What is a good close rate for plumbing contractors?
Plumbing contractors should aim for the same 40–60% range. If you're closing above 80% of your bids, your prices likely aren't covering your full costs including labor burden, vehicle expenses, and overhead allocation.
Does a high close rate mean my prices are too low?
In most cases, yes. When customers say yes without hesitation, comparison shopping, or negotiating, it's a strong signal that your pricing is below market. Raising prices to bring your close rate into the 40–60% range often results in more total profit — even with fewer jobs.
Can I really make more money by running fewer jobs?
Yes. When you raise your prices, your profit per job increases. Even if your close rate drops and you run fewer total jobs, the higher margin on each job typically more than makes up the difference — while also reducing your overhead, fuel costs, wear on equipment, and stress.
About Tracy Collins
Tracy Collins is the founder of Profit Clarity Group, a financial coaching and bookkeeping firm based in Nashville, Tennessee. She works exclusively with HVAC, plumbing, and electrical contractors — helping them understand their true costs, fix their pricing, and build businesses that actually pay them what they're worth.
Her programs include the 4-week Pricing Foundations Program for contractors who need to get their numbers right, and the 12-week Financial Clarity Coaching Program for business owners ready to take full control of their finances.
Profit Clarity Group
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