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Cold Calling is dead. You’ve heard it everywhere from Blogs to Magazines to Academic Studies. But is it true? A study from the Keller Center for Research at Baylor Business School revealed that experienced salespeople were able to generate around 0.3% response rate through cold calls (3 appointments for every 1,000 calls made). While that may sound terrible, take into account that an average salesperson can make up to 200 calls per day, which would mean 1,000 calls and 3 appointments per week. In the short term that’s not actually so bad. Assuming you can convert one out of the three that means you would have one new customer per week per salesperson.

So, what’s the problem?

You might be using cold-calling right now and it could be bringing new customers in the door, but you may also see sales and margins slowly spiraling down and your business gradually slipping away. Why? What is it about cold calling that’s so damaging to your bottom line:

1)      It’s a crutch – I’m sure you’ve heard the expression “Good is the enemy of great”? A churn and burn approach may get enough sales in the door to keep your head above water, but what about growth? If you’re burning through a thousand leads a week your potential customer base is shrinking incredibly fast.

2)      It’s expensive – A salesperson’s time is incredibly valuable. Think about the investment of training/salary/benefits that the company has in your salespeople. Putting those people into a position where they are only getting 3 meetings for every 1,000 calls may not even pay off in the short run.

3)      It forces your message on people – Most great companies are experts at solving problems for their customers and responding to exactly what they want. Cold calling puts your sales team in the awkward position of having to force a sale on people that may not have a problem and may not want to be sold.

4)      It takes focus away from your job – Salespeople should always sell downhill, using their time as efficiently as possible. Making  500 calls a week means there’s no time to follow up on hot leads, to network and get referrals, or to service current clients. So while you’re in the process of bringing in new business you may be losing the business you already have or neglecting the people who sing your praises and would gladly give you referrals.

5)      It demoralizes employees – Cold calling is the most brutal way of making a sale and it takes its toll. A salesperson is used to rejection, but being rejected 997 times out of 1,000 can be really tough, even for seasoned vets in phone banks.

6)      It hurts your brand – Over time people have grown to hate cold-calling. When a salesperson walks into your office out of the blue or calls your business while you are on a project, you may start to hate that person and their company.

What’s the solution?

I could spend a year’s worth of articles or blogs, talking about the solution, but the short answer is BUILD A SYSTEM. An integrated system including a branded website, blogs, marketing materials, social media, targeted sales strategies and key difference makers will allow your sales team to do what it was meant to do – i.e. to convert prospects into customers.  Sales teams are at their best when they are communicating a buy-able brand, penetrating specific industry verticals, demonstrating expertise, growing  their referral base, communicating difference makers persistently and consistently and pursuing hot leads.

In sales, hot is infinitely better than cold

A good rule of thumb for an effective sales process is — never sell without first warming up the customer. Warm sales calls are earned through a personal referral, positive buzz (word of mouth), or paying it forward — with FREE samples, service, expert information or bonding over a meal or event.  Rookies rush in cold. Professionals set the table first. Pros are focused on a warm, mutually beneficial relationship. Yes, cold calling may be dead.  But for the independent dealer, whose primary sales tool in defeating the office supply goliaths is relationship building — warm calls and hot leads spring eternal.

Cody Cleary

Cody Cleary

Cody Cleary

President at Orbit Design
Formerly with the Colgate-Palmolive Company, Cody has overseen such household names as Colgate Total; Palmolive Dish; Ajax Cleaners; Irish Spring and SoftSoap. Cody has developed a wide range of targeted marketing communications campaigns in both US and Australian markets, driving brand salience and sales growth through digital advertising, television, in-(and out-of) store promotions and PR.
Cody Cleary

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