An email from a reader:
Looking over the numbers my sales people generate I have noticed that dials to contacts has slowly decreased in the last 10 -15 years which in turn means appointments have dropped as well. People have to dial an amount that is unsustainable. Sales 2.0 which is really in its infancy but is the way I believe sales will be happen as the months and years progress. My question is with the tools that are now being understood better (linked in, face book, twitter), why would anyone want to continue to cold call?
Ah yes, why would anyone want to continue to cold call? Well actually, because it’s the most direct and effective way to generate new business. The problem is, of course, that most sales representatives cold call badly which is why it does not work for them.
Dr. James Oldroyd from the Korean business school SKK GSB, an expert on the measurement of cold calling, has examined and analyzed the electronic logs of more than a million cold calls, made by thousands of sales professionals inside approximately 50 companies. Geoffrey James of Sales Machine interviewed him and this is what Dr. Oldroyd had to say about cold calling:
“Most of the growth in the sales industry is in this area. The growth rate of outside groups has nearly stalled, leveling off at a .5% annual growth. By contrast, companies are adding new inside sales departments at a rate of 7.5% annual growth. By 2012 nearly 800,000 companies are expected to add inside sales departments. Incidentally, even outside sales teams spend a lot of time on the phone.”
You can read more of this interview here.
So yes, cold calling does work and bottom line: “ …even outside sales teams spend a lot of time on the phone.” That’s why it’s so important to master the art of telephone selling.
If you really want to build a solid sales pipeline that is packed with qualified prospects, there are only four ways that you can do so:
1. Marketing activities. Most large sales organizations have marketing departments that function to generate qualified leads, to drive traffic to the company’s web site and/or to the company’s inside sales team. If you’re a solopreneur or small business owner, you’re the marketing department.
2. Leveraging (Referral selling): contacting existing customers and/or people within a representative’s or business owner’s circle of influence and asking for referrals. This is an excellent way to develop new business.
3. Networking: joining leads and/or networking groups and/or using social networking sites/Web 2.0 resources.
4. Cold Calling.
While all these activities will generate leads for sales, only one is directly under your control. The first three are essentially passive, in that once you initiate the activity you must then wait for someone else to take action—a prospect to call in or a customer or networking contact to come through with a referral. Because you have to wait for the results – that is, for prospects to come to you – these processes also take longer to generate sales.
When you cold call you can target the companies with which you are interested in doing business, make a phone call and begin your sales process. While cold calling is not as easy as say, clicking a link on a social networking site, the good news is that cold calling is a communication skill (heavy emphasis on the word ‘skill’) and like any communication skill it can be learned and improved upon.
People who say that cold calling does not work today or that cold calling is dead are a little like someone playing softball who when up at bat, swings and misses the ball. They throw the bat down in disgust and say, “The bat doesn’t work.” The bat works fine… it’s just that you missed the ball.
Cold calling today works fine. Cold calling today, however, is different from the way it was practiced 20 years ago. In the e-mail referenced above, if the sales people are making their dials the same way they did 10-15 years ago, then it’s not surprising they’re not having much success. It is no longer enough to rely on sheer volume of calls. And this is still the strategy employed by most people who are making cold calls. If that’s your strategy, then it’s true, “People have to dial an amount that is unsustainable.” If that’s your strategy today, then cold calling won’t work for you.
In order to be successful, cold calling must be strategic, targeted and skilled. A cold calling campaign that is all three will succeed in developing new business. Anything else will waste your time.© Copyright 2010 Wendy Weiss