By Jack Warkenthien, CEO of NextStep Solutions
Last month, I was invited to speak to a roomful of Sales and Business Development Professionals that was sponsored by the National Business Development Association (NBDA). Their choice of topics: COLD CALLING! In Sales, there are few topics as polarizing as cold calling. Is it a necessary activity or a complete waste of time?
On this day, I was the Judge, Jury, and Attorney in the Compass Bank “court room” and all eyes were on me as I made my opening remarks. Imagine the surprise on the faces of over 130 of my closest friends in the room when the first words out of my mouth were, “Cold-calling does NOT work, and I try to avoid them”. With pen in hand and eager to learn how they too could take the CHILL out of their frequent “cold” telephone prospecting calls and door-knocking activities, they didn’t expect me to say, “Don’t make ’em”. Wait a minute, Sheriff, everybody makes cold calls–always have and always will. Let me approach the “bench” and provide evidence against them.
Cold Calling Doesn’t Work
In a study done several years ago at the Kenan-Flagler Business School at the University of North Carolina, it concluded that four out of every five B2B decision-makers in the U.S. (that’s 80%) absolutely, positively would NOT buy as a result of a cold call. More recently in the Fall of 2011, a study was done by the Keller Research Center at Baylor University. The numbers from that study was even more astounding!
The conclusions were based on a group of 50 experienced Sales Reps who made a total of 6,264 phone-based phone calls over a two week period. To say the results were dismal would be an understatement. The verdict:
- 72% of the calls were outright rejections. This included hang-ups, people saying “No”, and so on.
- 28% of the calls were labeled as “productive”. Productive? Yes. These were people who didn’t hang up right away, showed some interest, and asked to be called at a later time, etc. Before you jump out of your box and “object”…..
- The 28% totaling 1,774 calls resulted in 19 (yes, that’s NINETEEN) appointments out of the total 6,264 cold calls made.
- Success rate of cold calls to appointments: 0.3%. Based on the average closing rate of 20% or one out of five deals. That equates to barely four sales. Four sales from 6,264 cold calls.
In summary Your Honor, experienced Sales Reps can expect to SPEND (v. invest) 7.5 hours of cold-calling to get ONE qualified appointment!
Since most Sales Reps DO NOT GET PAID TO PROSPECT, they’re always looking for ways to increase their SELLING TIME. Sadly, when we do some introspective thinking, most of us, if we’re lucky, are investing 20% of our time in Sales activities. The remainder of the time is spent in lower payoff activities such as administration, marketing, and non-Sales related tasks.
Your Jack’s Snack:
Before you ever pick up the phone again, do your “3 x 3 Research”. Find three pieces of relevant information about your Candidate in three minutes. This bit of research takes the chill out of any cold call since before you dial you’ve learned something about their business, their potential challenges, and even about their competition. Understand there’s a fine line between doing too much research and not doing enough. The co-founder of Vorsight, a Consulting practice, taught me there are two (Sales) types: Librarians and Cowboys. Librarians spend all day researching and they don’t make enough calls. Cowboys are so gung ho about dialing for dollars that they never do any research. As a Sales Professional, you want to always do quick and easy research, attack that phone, and never look back!
Next month, you’ll learn “You Never Get a Second Chance at a First Impression” and how a little Research converts your Cold Call list into a Century Club of Warm and Hot leads. Court is adjourned for the month………………..
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Jack Warkenthien, CEO, NextStep Solutions, can be contacted by email at
[email protected] or call him at 832-344-6998. You can also visit his website at www.nextstep-solutions.com.
