???Formula for Upwork

Some time ago, while discussing conversion problems in my client's sales funnel, I caught myself thinking that 95% of freelancers and 80% of agencies on Upwork choose the strategy of increasing potential clients as the only possible solution for increasing income and reaching growth targets. Heh, I thought, if they have targets, of course. For most, freelancing on Upwork remains like rafting down a fast river on an inflatable mattress: wherever the river turns today, that’s where the person or organization goes. Upwork increasingly suffocates those who don’t take this game seriously, make an effort, and develop themselves as entrepreneurs, which every freelancer, and even more so, every agency undoubtedly is.

In this article, we will comprehensively analyze the metrics from which your business on Upwork derives its money. We will understand how to influence these metrics and why it’s essential not to confuse concepts.

You want more profit, but that does not necessarily mean “=” to the number of clients.

When we at JSD were creating our lead generation tool for Upwork based on our experience, the conceptual idea of value for the end client was the ability to set up the right search filter with the highest mathematical probability and receive notifications about a very specific project and client that would bring high LTV (Customer Lifetime Value).

What is the formula "Revenue = L × C × Pu × D × Qt"?

At first glance, the logic is always simple and ironclad: more projects = more Revenue.

But let’s perform a mathematical dissection of your Revenue and see what’s inside.

So what do we see here?

1. L (Leads ): It’s simple – the more potential leads that send you invitations or respond to your proposal, the more opportunities you have to sell your service.
2. C (Lead to Customer %): The percentage of leads that become our customers. These are your successful negotiations that turn potential clients into real ones.
3. Pu (Average Price per Unit): The average check of one unit of service or product you sell within a project.
4. D (Depth of the Check): The average number of units of services and products sold to clients within one project.
5. Qt (Quantity): The average number of repeat purchases made by each client over a period.

This formula comprehensively demonstrates all the levers you can influence to increase your income.

Let’s Imagine…

Let’s imagine that each month we have 100 unique leads (L), every 10th of these people orders something from us, meaning the conversion rate is 10% (C), with each client paying us $10 (average check), and the number of purchases per month is once.

When it comes to increasing sales, many people come up with absolutely fantastic ideas. This formula clearly shows that there are 4 levers that allow you to influence our Revenue.

The number of potential clients, the number of leads that have become actual clients, the average check for which they buy, or the number of repeat purchases.

Everything else is religious, methodological fantasy.

All the efforts you make on Upwork should be aimed at raising these 4 parameters.

What to Do If I Want X2?

Let’s now imagine that we need to earn $200.

As we can see, to achieve the set goal, we can influence the final result by changing each metric to the necessary extent. But do we need to chase the increase of one particular metric obsessively to get the desired result? Of course not. It’s complicated, expensive, and not always possible.

Let’s model such a situation…

Let’s imagine that I want to earn not $4684 but reach a Revenue figure of $5000.

I will show you how to diagnose the impact of each metric on your goal.

To do this, I take the figure $5000 and sequentially divide it by each metric except the one whose impact I want to study.

This calculation allows us to determine the necessary value for each metric and set clear goals for achieving the desired Revenue figure.

I want to draw your attention to the fact that there is no need to achieve target indicators at the expense of one separate indicator. Most often, it will be difficult and inefficient.

A smart approach would be to develop all metrics to an average level, which will give the final result without the need for extensive development of just one indicator.

Your task is to diagnose the metrics that you can easily develop in your Upwork niche and develop them first, followed by the more challenging ones.

Conclusion

Applying a mathematical model to your freelancing or business will give you a sense of control over the process. After this, you will never want to return to the chaos of managing a business based on feelings and intuition. Clearly, what I described is just the tip of the iceberg of the Data Driven approach, but it is enough to have a solid foundation.

Upwork is increasingly polarizing and, with the help of new commissions and connects introduced recently, shows us that it plans to leave professionals on both sides of the barricades. Everyone will pay, but only those who think will earn.