I still get in heated discussions by commercial sales consultants who tell me they started their careers cold calling and it was how they built their business. That does not mean it is the best method to grow sales, at the time most sales consultants had no formal training on how to properly grow the business. I am not against cold calling. In fact, when I am in the field with sales consultants and we are on an appointment call, I will always ask this question: “Mr. Prospect, thanks so much for taking the time to meet with us, your time was appreciated. Could I ask one more question? Do you happen to have a relationship with any of the businesses around you?” If the prospect says yes, I ask “Would you mind if we dropped in just to leave a business card and mention that we had just met with you?” They always say yes! Now your next call becomes a warm call since you have a referral source!
I decided to dig deeper about cold calling and found two university studies. The first one done several years ago, by the Kenan-Flagler Business School at the University of North Carolina concluded that 4 out of 5 business to business decision makers in the United States (80%) positively would not buy as the result of cold calling. More recent research was done by Baylor University at the Keller Research Center in Texas. The study was based on a group of 50 experienced and qualified sales professionals who made a total of 6,264 phone based cold calls over a two-week period. The results?
- 72% of the calls were rejections, people who said no or just hung up. Remember these calls were to businesses.
- 28% of the calls were judged as productive. These are people who did not hang up, showed some interest, gave a referral or asked to be called back.
- Most of the 6,264 phone calls were additional attempts to sell the 1,774 (28%) of positive prospects.
- Of the total 1,774 prospects were showed positive responses resulted in 19 appointments. That’s 19 appointments out of 6,264 telephone calls!
- That’s a success rate of .3% just to get an appointment or 7.4 hours of calling to get one appointment.
If you think it gets better in person, it does but only slightly. Here are the facts:
- Just dropping in to speak with busy business owner and expecting to be seen is rude and inconsiderate.
- You will only see 1 out of 20 decision makers on face to face cold calling.
- When you drop by and leave your card you give the business owner a warning and the ability to tell the gatekeeper to block you on additional attempts.
- You don’t have the time to make cold calls where you don’t see a decision maker.
Why are so many sales people determined to make cold calling their base of operation? Here are the reasons:
- It’s easy! It takes no preparation, no plan, you don’t even have to know what you are going to say.
- It feels productive. It is great to be able to say you made 15 sales calls in a day! What a workhorse!
- It gives the illusion that you are working hard. You are, but you are not working very smart.
- When you do see a decision maker or make a sale it feels great! You put out an incredible amount of effort and got a win! That reinforces that cold calling works however unproductive.
- Management admires your effort…at first, then when they see very few sales the doubt and frustration sets in. Start looking for another job.
I love the scene out of “Dumb and Dumber” where Jim Carrey asks the attractive young girl if he has a chance to win her romantically. Here answer is “one in a million.” Jim Carrey’s character gets excited and shouts “yes, there’s a chance!” Well, that’s how some people feel about cold calling, there’s at least a chance.
One of the things of which I am proud is we find so many warm prospects that a sales consultant would never have to make a cold call under our system. In our next article, I will go over the many ways to get appointments and a method we use to get endless quality referrals, guaranteed! It’s time to come out of the cold, trust me, warm is better!
About Ken Taylor:
Ken Taylor’s training, consulting, and coaching have been used on individual, regional, and national business levels to achieve ultimate success! Known as an industry leader and as “America’s Corporate & Personal Coach,” Ken has consulted for companies like General Electric, General Motors, FCA, Ford, Commercial Truck Trader, and Equipment Trader.