Recently I read a book on Cold Calling being a waste of time for the following reasons:
Comments?
I guess it depends on the type of business you are trying to run.
Rachel from Cardholder Services must be very successful at it, but she depends on sheer volume (calling every phone in America several times a day and fleecing every susceptible mark) and not on repeat business.
Which column (Cecil or Staff Report) is this in reference to?
What you say is perfectly true for companies selling quality products, need a good reputation, and rely on repeat customers. For other companies, the ones selling worthless crap, they want suckers, and cold calling finds them with the greatest efficiency. When sales volume drops, you take your profits, change your name and useless product line, and start the process all over again. For those companies, cold calling is just the ticket.
Piece of advice I was given: if you want to know how to be successful in business, look at what other businesses do week in week out year after year. They wouldn’t repeat strategies for that long if they were a waste of time.
If it was a waste of time, they wouldn’t do it.
Apparently 2-3 % of calls result in a meeting. That’s probably less than one hours work for a caller paid minimum wage!
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Couldn’t find a column that this referred to.
Moved. CCC>GQ
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My company doesn’t do cold calling. However, I know that it works, and I think that we should be. Here are my thoughts on each one of your points:
It destroys your status as a business equal.
This assumes that being a business equal is important. It isn’t always. And I think the way cold calling is done can affect the perception.
It limits production and wastes valuable time.
Why would you have a productive person doing cold-calling*? You hire this work out, paying minimum wage plus some kind of bonus. In many industries, the cold caller isn’t even doing the selling - they just set up appointments or pass on leads. There’s a dedicated sales person to follow up and close. As long as you get enough sales out of the the resulting leads, it’s a win-win.
(*To answer my own question: In an economy like this, cold calling might be a better use of time than twiddling your thumbs hoping someone walks through the door.)
Timing is working against you, not for you.
I don’t know about that. Maybe it depends on the product/industry. But let’s say you’re cold-calling about real estate. I can guarantee you that a certain percentage of the population is thinking about buying a house and just haven’t contacted a realtor yet. Sure, 99% of them aren’t, but cold calling is about numbers. If 1000 calls gets you 10 leads and 10 leads gets you 1 sale for a $10,000 commission…
Does not address pre-qualified leads only.
Depends where you get your leads. Pre-qualified leads are more expensive because they’re more valuable. Also, you can buy filtered lists - for example, only businesses, only in a particular zip code, only within certain income brackets.
But, look at it through the lens of answer #2: the cold caller is the one pre-qualifying the leads. The sales person does receive pre-qualified leads.
Put you in a negative light.
Depends on how you do it, in part. But you also have to realize this: if 99% of the people aren’t interested, who cares what they think? You only care about the 1%.
Certain kinds, could be illegal.
Yes. But what isn’t? In any business practice, you must learn the laws and comply with them.
Real sales people sale, not prospect.
Yes. But your sales people should not be doing the cold calling (see #2). You have cold callers call. The callers generate leads/appointments. The sales people then sell the leads/appointments.
You talk about how the way cold calling is done is important. How can it be done in such a way that it has a positive (or not too negative) effect?
Anecdote not data: I used to live in a city that had two daily newspapers. Even though I preferred newspaper A, I cancelled my subscription and went with newspaper B because Newspaper A would not. let. up. on cold-calling me even though I already had a subscription and repeatedly asked them to put me on their no-call list.
However, I guess it works. I may not be typical - I won’t ever subscribe to Netflicks because of their aggressive pop-ups and no way in hell will I spend a dime with any company that solicits my business directly with annoying phone calls.
Just a trivial anecdote from the point of view of a customer.
Like most people I hate being cold called. However many years ago I was cold called by a roof insulation company - and well yes, I was interested because my house was very poorly insulated. Result, sales guy turns up. This company also advertised on TV, so they were pretty well known and also clearly pushing more then one sales mechanism. In the negotiations it became quickly apparent that the sales guy was on commission for sales made at that moment. If he didn’t seal the deal, and I called the company later, he wouldn’t get the commission. Anyway, I did buy their product.
So, the answer was - I wanted insulation - I had been dithering about and not doing anything about it - so was that perfect one in a thousand cold call. It wasn’t a lot of money spent, but clearly made the effort of the cold call worthwhile. As to the repeat business argument. I was eventually reasonably pleased with the final service, although there were caveats. But putting insulation in one’s roof is not a business that depends upon repeat customers.
I’m not an expert on the field, but I do have some materials used for training on cold calling to obtain accounting clients. The script is not designed to push a sale, but to get the lead to identify their own needs. A call might go like this: “Hi, I see that you’ve recently registered a new business. Are you confident that all of your bookkeeping and tax requirements are being met? Do you have an accountant already? Are you satisfied with them? Would you like us to give you an estimate so that you know you’re paying a reasonable price?”
If you get negative answers on all of those, the script doesn’t push for a sale. You just say “We’re glad to hear that. Have a nice day.”
It’s also notable that the script doesn’t even reveal the caller’s company unless we’re asked or unless an appointment is going to be set up.
It takes a special type of person to do cold calls effectively. Any kind of sales work is brutal, which is why you’ll ALWAYS see sales positions available in the help wanted ads. Sales jobs chew up people and spit them out, and only the talented and the tough survive.
A sales person who can do cold calls successfully doesn’t take the rejection personally. He or she can keep picking up the phone and making the next call. It’s a type of Teflon personality, and without it, you simply cannot function.
Me, I’d cry my eyes out after the first “drop dead.”
You gotta have the magic mojo personality, and THEN you can benefit from cold calling.
~VOW
I was a stockbroker back in the late 80’s and all of my clients came from cold calling. The vast majority of all of the broker’s in the office were the same. We made unbelievable money back then, so the answer to your question is yes, cold calling is worth it BUT:
The amount of work to get 100 clients was mind boggling. For the first year I spent 8 to 12 hours a day cold calling. The average for generating a new client was very low. Probably 1 prospect for every 30 or 40 people I spoke with. This figure is from straight cold calling. Essentially going through a phone book and dialing at random.
If you worked from paid leads the average was quite a bit better I would say 5 or 6 for every 30 or 40 calls. However from those prospects only about 1 in 10 actaully purchased stock. So, the my experience was cold calling could be very profitable but required a massive amount of work and dedication to pay off.
Also, if you intend to cold call be prepared for rejection. If you don’t have a tough skin you won’t survive a week doing it.
Considering the huge number of places that are hiring for cold calling it must work. I am looking for a job and I got calls for a lot of places that do cold calling. Unfortunately many disguise the ad and when you go in for the interview it’s all cold calling, just dialing numbers.
It seems profitable. One place I went to, they pay minimum wage $8.25/hr and you get commission if you sell. They sell various CD courses that start at $300 a course. So if you sell even one that pays for a lot of cold calling.
Cold calling also helps a lot of people, such as parolees and such who have to maintain a job to maintain their parole. It’s often the only job they can get.
So while I hate receiving cold calls, it does seem to serve a purpose
I hear the money is awsome.
Even people who sell multi-million dollar software packages, or airplanes, or yachts do cold-calling. The people who lure the “whales” to Las Vegas do cold-calling.
Businesses who wait for the phone to ring and orders come in are in the process of going out of business.
To AndyLee:
The place you went to advertising a job cold calling isn’t really a job. It’s a damned STORE selling CD packages to gullible people who desperately want a job. Run. Run fast.
~VOW
Spam works…but for only a small of the amount sent out. Cold calling probably has similar results…its just not as efficient or cost effective as spam.
It’s worth it in a very few businesses. I’m kinda disappointed, and surprised, that this time round I’m not getting cold calls from mobile phone companies wanting to take over my contract now it’s nearing the end. It’s the most expensive contract there is and the bill’s always paid on time, but they don’t seem to want me.
It would be much easier for me than going into a shop or trawling through websites trying to choose; there’s the rub - if having someone sell to them on the phone makes it easier for the customer, it’s much more likely to work.
He meant that the company’s business is selling CD courses, not that the employees buy the CDs. I did misread it that way at first too.
Cold-calling definitely doesn’t work on me. I refuse to do business with any place which does use it, including hotels and so forth.