Break-Even Close Rate Calculator for Contractor Calls

Your break-even close rate is the share of reached calls you have to turn into signed jobs so the gross profit covers what you paid for the calls. Enter three numbers below: cost per call, the share of calls you reach, and gross profit per job. The calculator returns the break-even rate and your cost per job at a close rate you choose.

This tool belongs with the contractor lead cost per job guide. The guide explains why cost per lead misleads you. This page gives you a quick way to test a source before you commit budget to it.

The calculator

Nothing you type here is sent anywhere. The math runs in your browser.

The two formulas

The calculator uses two lines of arithmetic.

Break-even close rate = cost per call / (share reached x gross profit per job)

Cost per job = cost per call / (share reached x close rate)

Both follow the same logic. For every call you pay for, only a share reaches a conversation. Of those, a share signs. Cost per job is what you paid divided by the jobs that came out.

Worked example (illustrative numbers)

These figures are hypothetical, so replace them with your own.

You buy 100 calls at $60. That's $6,000. You reach 80% of them, so 80 become real conversations. Each signed job leaves $2,400 in gross profit.

• Break-even close rate: $60 / (0.80 x $2,400) = $60 / $1,920 = 3.125%

Check it: 3.125% of 80 reached calls is 2.5 jobs. 2.5 jobs x $2,400 = $6,000, which equals the spend. Break-even confirmed.

Cost per job at different close rates, using the same inputs:

Each row divides $6,000 by the jobs. The 20% row, for instance, is 80 x 0.20 = 16 jobs and $6,000 / 16 = $375.

The first thing this shows is how low break-even sits. The second is why break-even is the wrong target: at 5%, you've covered the lead fee and given back 62.5% of the first job's profit before paying anyone to estimate it.

Break-even is a floor

Gross profit doesn't cover everything. Overhead, estimator drive time, office staff and return visits still need paying. Treat break-even as the line below which a source is clearly losing money, and set your real target higher.

A practical way to set it: decide the share of first-job gross profit you'll spend on acquisition (say a quarter), then enter your cost per call and reach rate and adjust the close rate until the lead cost per job lands there. Gross margin and lead cost for contractors shows how that cap works, and marketing budget for home-service contractors turns it into a monthly plan.

What "share of calls you reach" means

This input trips people up, so be strict with it.

A call you reach is a real conversation with a homeowner you can quote. Leave out:

• Calls that rang out or went to voicemail.
• Wrong numbers and out-of-area callers.
• Callers asking for a different service.
• Hang-ups before anyone spoke.

If you're buying exclusive inbound calls, the reach rate is mostly about your own phones and your team's speed, since the call itself arrives live. If you're buying shared leads, reach also depends on who calls the homeowner first; see the hidden costs of shared leads.

Where your close rate should come from

The close rate in this tool is signed jobs divided by reached calls. It combines two steps: how many conversations become booked estimates, and how many estimates close. What is call-to-estimate rate covers the first step on its own.

To get your number, pull 60 to 90 days of records and divide signed jobs by reached calls. If you don't have that yet, how to tell which leads became jobs explains how to build the log. Until then, run the calculator at several close rates, as in the table above, and see how sensitive your cost per job is.

Limits of this calculator

• It uses one gross profit figure. If your jobs vary a lot in size, run it twice for your small and large work.
• It ignores repeat business. A recurring trade can accept a lower first-job result; see contractor lifetime value by trade.
• It ignores timing. Jobs that sign weeks after the call still count here, so decide on a window first. Lead attribution window explained covers that.
• It isn't tax or legal advice. It's arithmetic on numbers you provide.

Using the result

If your break-even is below your real close rate by a wide margin, the source has room. If it's close, the source is fragile, because a bad month or a missed-call problem can push you under. If it's above, the cost per call is too high for the job, or your gross profit per job is too low for this kind of lead.

When you're ready to test exclusive inbound calls, RankLocal bills qualifying calls over 60 seconds and you pay only for those. Apply here and use this calculator on your first 30 days of calls.

Frequently asked questions

What is a break-even close rate?

It's the share of reached calls you must turn into signed jobs so that lead spend equals the gross profit those jobs earn. Below that rate you lose money on the source, and above it you profit before overhead.

What counts as a call I reach?

A call that became a real conversation with a homeowner you can quote, not a missed call, voicemail or wrong number. If you answer 85 of 100 billed calls and 80 are usable, enter 80%.

Does break-even mean I'm making money?

No. It means lead cost equals first-job gross profit. Overhead, estimator time and return visits still have to be paid, so aim for a close rate well above break-even.

Which close rate does this use?

Signed jobs divided by reached calls, which blends booking an estimate and closing it. Use your own last 60 to 90 days of numbers.