Regardless of what level in a sales group you fall into, cold calling is a cloud hovering over your head. If you’re the VP of Sales, you’re getting these calls several times a week. If you are the Account Manager then you have a set number of calls to make or a list of companies you should be “hunting”. In either of these scenarios, the call is never appreciated. Getting interrupted or interrupting someone else is always the result. The science (if you call it that) is if you make 100 calls a certain percentage will become opportunities. Are companies still playing this game? There are better ways of engaging customers. [tweetmeme source= “insideview” only_single=false]
There is an interesting and very relevant diagram in the book UnMarketing that talks about the Hierarchy of Buying. Read the book, do some other research and it should be confirmed that cold calling is the bottom of the barrel when it comes to finding new customers. The book is positioned towards social media marketing but the lessons still apply to sales leaders trying to stay on the cutting edge. In the age of Customer 2.0 you should have people coming to you in some form or another. Maybe its all word of mouth, lead generation or other avenues. If people are not talking about your company you have bigger fish to fry. Outbound calling to a person that has never heard of you or your product is just about as likely to buy your widget as they are the Brooklyn Bridge. You have to build trust.
Current customers are key
Getting business from current customers is usually the easiest since they already use your product. Unless you have done a poor job with the account or have not been able to keep up with their needs, you are generally in a good place with them. Current customers are a great place for referrals and can and should be leveraged to bring in new business. At the top of the pyramid is where B2B sales teams should be focusing their efforts but it seems like they are aiming much lower on the scale.
This is why companies spend so much time making sure they have great reviews and working with customers to write these reviews.
Why are you still cold calling?
90% of consumers trust peers based on a Nielsen poll, and less than 10% trust an unknown source. Cold calling is perceived a lot like phone spam. If customers want information they will search you out or at least leave digital breadcrumbs of questions or conversations that you can find and then engage. As I said in the Sales Predictions for 2011, sales teams that are not already focusing on social media will, social selling training and tools will be a focus.
Selling is based on trust and you can spend the time (a lot of it) building it with people that have never heard from you or you can move further up to leads and prospects that you have some trust with. This is why sales people have been hearing so much about the value in nurturing campaigns and social media marketing, but little of it seems to apply to anything a sales person can influence. That’s why Sales 2.0 is growing in popularity, sales people can have more relevant intelligence on prospects and become great resources to their customers by using social media and sales leaders see this as a priority.
Some of the best businesses in the world were built from cold calling and that was because they found a way to exploit a technology (phones) using a team of people to saturate a market of people that loved to talk to other people. That hasn’t changed a whole lot in the past few years other than the fact that the phone is no longer the best technology to use because decision makers have less time. Sales 2.0 savvy teams will be the next wave of revenue generators for companies, starting in the technology space and moving like a wave through different industries. Social selling will hit resistance and may not apply at all to some companies (I can’t imagine which ones but I’m sure they exist).
Have you started using social media tools in your sales teams?
Interesting post and very true. So-called “naked cold-calling” is a recipe for failure. Sales is all about building trust today. Comment on blogs, follow on twitter, become a fan on Facebook – there are a myriad of ways to build trust. And tools like InsideView and iSell by OneSource (our client) prepare people for calls.
Jeff Ogden, the Fearless Competitor
Find New Customers “Lead Generation Made Simple”
http://www.findnewcustomers.com
@fearlesscomp
Jeff, thanks for the comment. I remember being a sales guy and hating the thought of cold calls. That’s why I started using social media in the beginning. It made for much better conversations when I had intelligence on who the prospect was and showed more of an interest through networks like LinkedIn.
So… I am going to split hairs. I think people use the term cold calling when they want to position alternatives methods of selling that usually involve their services or products. In actuality, no one “cold” calls anymore. But, sales reps can still have success using the information available to them to do targeted outbound calling and yes…it still works. As a matter of fact, it works better than it ever has before because less and less people are using the phone so buyers are once again picking it up when it rings.
Let me be clear, I am not disagreeing with the multiple methods by which one can build trust and get found. They are critical components of successful selling. But not every buyer will be identified that way and not every company has the budget, brand or inbound machine that can fuel their revenue engine.
The danger here is that our sales people believe the mantra that outbound no longer works and, as quota achievement percentages are lower than they ever have been before, it appears many of them are buying in to the fact that social media and marketing are responsbile for delivering their pipelines.
The truth of the matter is that sales reps need a unified marketing strategy that combines marketing efforts, social media and savvy outbound calling. Your solution is a fabulous tool to use in those efforts..we use it daily and with great success. The key to building a revenue machine is to have ALL the tools in your bag that will allow you to achieve your goals and intelligent outbound (the new term/concept for cold calling should be one of them.
Thanks for listening. Over and out…
It’s always nice to get a different perspective on this topic. By no means am I saying the phone is dead as a tool but it can’t be relied on as the only tool along with email. A unified method of targeting prospects is really about being in the places where you customers are (Which I think Trish advocates a lot) As I said there are industries that are not active in social media but they are still being mentioned online through press releases or reviews. Knowing how to identify this data and turning it into actionable intelligence for communication is the key message.
Well said, Trish. Of course “cold” calling is dumb, and there’s no reason for it. And everyone would like to have a referral introduction, but that’s not always possible. So, the quickest way to attempt to enter into a sales dialog with someone you would like to to business with is to call them. But, the homework must be done first. And using InsideView is one of the best ways to do just that. I’m a bit tired of so many people saying that social media is replacing calling…blah, blah. blah. Granted, it’s becoming a bigger part of the mix, and a tool, but talking to a human will never be replaced. People who are afraid to interact with another human on the phone in real time are contributing to the “wussification of sales.” By they way, I believe there is a term for this type of intelligent calling: Smart Calling.
I disagree that cold calling is at the “bottom of the barrel”. My firm makes cold calls for a living. Business has never been better, because as Trish correctly calls it, the inside sales team that’s supposed to be making outbound calls, has bought into the notion that social media and other channels are more effective. And they also hate cold calling.
If you follow my blog, you may know that I’m conducting my own 60-day test to see if I can land new clients using social media along with the beta release of the Nimble CRM. While I’ve discovered there is a social stream for prospecting, I have yet to discover the conversion point for social prospects.
Rather than the “bottom of the barrel” in a pyramid, I’d draw a circle representing the prospecting universe, with cold calling right in there with social media.
Now more than ever client prospects have the opportunity to Google you before they return the call or decide if they will deal with your brand or company. Add a video and they can see you first, before the meeting.
The integration of Social Media into a business model is an advantage compared to 20 years ago.
What will the Google search say about you?
David Pylyp
Living in Toronto
Love this post!
I do sales and marketing consulting and I find that a lot of companies I talk to are stuck in the past. They still think that the cold call will work.
What baffles me even more is how much companies leave on the table with their current clients. They spend tons of time and money going after new clients instead for focusing efforts on current clients. I always tell people this is a double bang for the buck. Get revenue 5 to 10 times easier and also get satisfied clients who will recommend you to other companies.
Great article and hopefully this will open some eyes.
Regards,
Chris Hamilton
I love the title of this post. Finally, a Sales 2.0 company states that cold calls are dead. Yet, many sales people continue to cold call. Let me define a cold call: You call a person who does not know you and is not expecting your call. Therefore, if you just get a name, your call is cold. Your conversion rate is less than 10 percent, and you are in the “dialing for dollars” league.
Compare cold calling to referral sales. When you receive a referral introduction, you are pre-sold, your sales process shortens, you ace-out the competition and convert sales prospects to clients more than 50 percent of the time. There is no other lead generation or business-development process that comes close to these results.
Actively use Social Media and Sales 2.0 tools to find out who people are, who they know, and how you’re connected. Then pick up the phone, talk to your Referral Source, ask for the referral introduction, get the meeting at the level that counts, and boost your close rate to more than 50 percent.
@Brian, in your case, companies can effectively use a firm to make the best out of cold calls to schedule appointments and initial conversations. Sales people should be focusing on prospects with real needs and you can help identify those.
@David, you hit the nail on the head. Customers are doing searches on companies and sales people way before the intitial conversation to see who they are working with.
@Chris, I think this is an area where a lot of companies with mixed offerings could do more work. Getting referrals to new business is a much better way to leverage existing relationships to build a pipeline.
@Joanne, Thanks for the comment. You know better than most the true potential of referral based selling and how social media can accelerate that effort.
Thanks for all of the great comments on this discussion. So many different points of view that are appreciated.
Great post and some interesting responses! I don’t agree that Cold Calling is a thing of the past, as I think with the combination of Social Media, Cold Calling can actually work at times.
There is no denying that referalls, Current Customers and Word of Mouth are the best ways to get new clients, however Cold Calling can still pay divedends if done correctly.
One thing I do agree with though, is that no Sales Person likes making them!!
I think the title of this post is quite misleading as it goes from why cold calling is bottom of the barrel to why it should not be relied upon as the only method… two different statements entirely in my view.
Finding the best approaches with the best return on investment should always be the goal regardless of what people and businesses prefer doing or like doing. For some that will be cold calling, for others it might be leaflet drops, or pay per click, or social media. It’s too much of a sweeping statement to say one thing works better than others across the board.
For my own part telemarketing is absolutely on the increase, it offers quick leads for low cost but isn’t appropriate for everyone.
I support the comments by Art Sobczak and Maxxy.
I think it pays to look at the barrel. Let’s do that.
* Cold calling can very effective for salespeople who excel at it.
* The vast majority of people who are cold calling do not excel at it.
* A major reason for the aforementioned vast majority’s failure to excel at cold calling is the fact that cold calling in many companies is assigned routinely to entry level inexperienced novices. In other words, companies delegate work that takes a high skill level to people who have no idea what they are doing. In effect, the brain trust is using an inappropriate boot camp model. It’s always easier to shift blame to people rather than to faulty systems.
* The best of the best in cold calling enjoy the activity–just like the best of the best in most endeavors in life.
* Better training modeled ONLY from successful cold calling, increases the viability of cold calling.
* Selective recruiting increases the viability of cold calling.
I neglected to mention that two weeks ago I read the book Unmarketing. I think it is only fair and appropriate that we credit the author if diagrams and thoughts are snipped from his work. Scott Stratten in the author.
The member here advises us to “Read the book, do some other research and it should be confirmed that cold calling is the bottom of the barrel when it comes to finding new customers.”
I want to point out that the focus of that work is to introduce a broader and more comprehensive perspective of current advances of opportunities to market. The reference to cold calling is there to support the message of the book, not to fetter on it.
New things do not necessarily supplant old things. If you work with the premise that they do, you are limiting yourself.
The title of this post contains quite a strong statement, which of course is great to create some controversion and to stimulate discussion. However, I don’t think it’s that ‘black and white’.
Social media without a doubt have their value in the sales process, but so has the phone. I’ve initiated and closed some of my most profitable sales ever on the phone.
It all depends on how you use it. If you’re on social media just wasting time and tweeting about how that last pizza was the best you ever had, results will be poor. The same holds true for when you’re calling people straight from the phone book.
In my opinion social media and phone calls can be equally powerful if used right, and twice as powerful when used together. Research your prospects, build connections on linkedin, see what people are saying about your products (or those of competitors) on twitter, help out where you can. If you do all of this, every phone call will be a ‘warm’ call.
Wim
*controversy btw 🙂
Great post. Why waste time calling hundreds of people when you can go through more effective avenues? I did door to door sales for a while and found the same problem. People view this type of marketing as intrusive and unwanted.
I certainly enjoyed the way you explore your experience and knowledge of the subject!
Keep up on it. Thanks for sharing the info
“Why are you still cold calling?”
If I told you how much revenue our top “cold-caller” generates, you’d know why.
“If customers want information they will search you out or at least leave digital breadcrumbs of questions or conversations that you can find and then engage.”
That’s an over-generalization and not true 100% of the time. It’s only true when someone:
1. Knows he has a need
2. Can describe it in terms of a solution
3. Knows where to find someone who can solve it
4. Is motivated to find that someone
Unless all 4 of those fall into place, inbound marketing falls on its face.
Here’s more on the topic, if anyone’s interested:
Why Prospects Aren’t Looking for You: The Myth of the Self-Directed Buyer