InsideView nailed it by titling its Sales Intelligence blog “Why Cold Calling is the Bottom of the Barrel”. Finally, a Sales 2.0 company states that cold calls are dead.Yet, many sales people continue to cold call. My definition of a cold call: You call a person who does not know you and is not expecting your call. (For more on why a real introduction—a referral—makes all the difference, read: “How to Bypass the Gatekeeper”.
If you have just a name in hand (and not a referral), your call is cold. The cold calling conversion rate is less than 10 percent, and you are in the “dialing for dollars” league (read, “wasting time”. And who has time to waste?).
Why Waste Your Time Cold Calling?
Referral selling works. Really.
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
- You convert sales prospects to clients more than 50 percent of the time
No other lead-generation or business-development process comes close to these results. Referral selling works.
However, sales success is a strategic process. You must actively use all of the tools at your disposal. 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.
Key Points from InsideView
Regardless of your level within a sales group, cold calling is a cloud hovering over your head. If you’re the VP of Sales, you receive these (cold) 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?
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. This is why companies spend so much time making sure they have great reviews and working with customers to write these reviews. (For more on how your well-tended customers are a part of your referral-sales team, read: “Your #1 Untapped Referral”)
Why Are You Still Cold Calling?
These numbers don’t lie: 90 percent of consumers trust peers based on a Nielsen poll, and less than 10 percent 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. … 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. This is 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).