Cold Calling
Cold calling is a traditional and widely used marketing method, which involves reaching out to potential customers who have not had any previous contact with a salesperson. This approach falls under the category of telemarketing and has been employed for quite some time.
Warm calling refers to the act of contacting a customer who had shown previous interest in the company or product.
The decline of cold calling by phone in the U.S. can be attributed to the increase in cell phone usage and the decrease in landline usage. Federal Communications Commission (FCC) regulations prohibit telemarketers from calling cell phones without the permission of the users. Additionally, the establishment of a national Do Not Call registry has created obstacles for consumers who have landlines.
How Cold Calling Works
Cold calling usually involves telephone or telemarketing solicitation, but it can also include visits made by door-to-door salespeople.
The most successful cold-call salespersons possess persistence and resilience in the face of repeated rejection. They also conduct research on the demographics of their prospects and the market, enabling them to identify consumers who are more likely to respond positively to their sales pitches.
Professions characterized by extensive cold calling usually experience a high rate of turnover.
The Difficulty of Cold Calling
A variety of reactions are commonly observed from cold calling, such as call terminations, hang-ups, and verbal attacks.
Based on a report by LinkedIn in 2020, around 69% of potential customers agreed to talk to a new salesperson in the past year, and out of those, 82% were open to meeting the salesperson. Nonetheless, the success rate of connecting with a buyer depends on the seller’s persistence, as it typically takes an average of 18 calls. Unfortunately, many sellers abandon their efforts after just four calls, missing out on the opportunity to secure a positive response.
As more efficient methods of prospecting, such as email, text, and social media marketing, including Facebook and X (previously Twitter), continue to develop, the desirability of cold calling has diminished. These alternative approaches are often more efficient and successful in generating new leads, contrasting with the less effective traditional method.
The latest innovation in cold calling, known as robo-calling, involves the use of automated dialing and pre-recorded messages. However, government regulations like the National Do Not Call Registry have hindered the attempts of cold callers to contact a large number of potential clients.
Cold Calls and Do Not Call
In 2003, the Federal Trade Commission and the Federal Communications Commission jointly introduced the National Do Not Call Registry, which offered consumers the option to decline receiving cold calls for a duration of five years, with the opportunity to renew their registration after the five-year period.
The number of registered numbers in the registry exceeded 200 million by 2010 and reached 244.3 million by the end of the fiscal year 2021. Despite facing several legal challenges from the telemarketing sector, the courts confirmed the legality of the Do Not Call Registry, making it difficult for cold calling services to persist.
The registry only pertains to households, not businesses, which means that financial professionals are still allowed to cold call businesses. The positive aspect is that the potential gain is much greater when dealing with businesses. Despite the difficulty of reaching decision-makers in companies, targeting the company’s 401(k) plan or the business of a well-paid executive may warrant the extra effort.
In today’s era, cold callers understand that attempting to sell a product directly is an ineffective tactic. The focus lies in establishing connections with potential clients. Certain advisors opt to form relationships by posing targeted queries and providing complimentary guidance corresponding to the answers received.
Some advisors have found success with a soft-sell approach when it comes to addressing the concerns of business owners about the fee structure of their employees’ retirement plans. In this approach, the advisor may suggest other companies for the business owners to explore and offer to conduct research and provide additional information later on.
The following is a step-by-step guide on how to cold call without adding or removing any information from the original text: 1. Start by preparing a list of potential contacts whom you want to reach out to for business purposes. 2. Prioritize your contact list based on your business objectives or target audience. 3. Create a script or an outline to guide you through the cold call. This will help you maintain a structured conversation. 4. Introduce yourself confidently and state the purpose of your call concisely. 5. Engage the contact in a conversation by asking open-ended questions and actively listening to their responses. 6. Highlight the benefits or solutions your product or service can provide to the contact’s needs or challenges. 7. Overcome objections that the contact may have by addressing their concerns and offering valuable insights. 8. Maintain a professional and polite tone throughout the call, ensuring that you respect the contact’s time and preferences. 9. Close the conversation by summarizing the key points discussed and establishing a clear call-to-action if appropriate. 10. Follow up promptly after the call, either through email or any other preferred communication channel, to further nurture the relationship. Remember, cold calling can be a challenging but effective method of initiating business connections, so stay persistent and continuously improve your approach with each call.
1. Gather intel ahead of time
According to Crunchbase, it has been found that the most effective cold calls involve a certain level of prior research. On average, successful salespeople dedicate around six hours per week to researching their potential clients.
When making cold calls, it is important to remember that they will be impersonal, but you should not approach them without any preparation. It is crucial to communicate a clear value proposition even if you are unfamiliar with the recipient, as not doing so can lead to unsuccessful outcomes.
Buyers often complain that cold calls are impersonal, as they understand that you make numerous calls every week and do not want to be treated as just another name on a list. By providing personalized attention and offering specific information about how you can benefit their business, you can improve the effectiveness of your cold calls.
2. Work off of a cold call script — but don’t just recite it
Having some guidance can be highly beneficial when making cold calls. It is important to have a certain level of direction, which serves as a foundation for planning an optimal path for a conversation. This is commonly achieved through the use of a cold call script.
While these guides can provide valuable information for conducting well-organized and successful cold calls, it is important to remember that they should not be seen as inflexible scripts to be read word-for-word without any opportunity for improvisation or natural variation.
When making cold calls, it is important not to proceed without any preparation. Having a general idea of your intended outcome is necessary, but it is crucial to strike a balance between providing guidance and exerting control. Therefore, ensure that you approach your calls with skill and elegance to prevent overstepping boundaries.
3. Learn to take rejection in stride
The majority of cold calls are unproductive, and certain calls can be quite unpleasant. Most potential customers will swiftly reject the offer, and some may release their built-up frustrations during the conversation.
In order to maintain momentum, it is important not to be discouraged by rejection in sales. Instead, embrace it as a normal part of the job and adopt a mindset of moving on to the next opportunity. By persevering, it is inevitable that you will eventually connect with a prospective client who is open to your pitch and secure the meeting you have been striving for.
If you can accept the more unpleasant aspects of cold calling without letting them affect you, you will increase your chances of achieving positive outcomes. It is important to remember that being rejected does not necessarily indicate a lack of skill or competence as a salesperson. So, stay optimistic and persist in your efforts.
4. Know when to call
Not all cold calls have the same level of success. Certain factors, such as the contact’s disposition, the company’s requirement for a solution like yours, and the timing, determine the likelihood of success.
The last point is crucial, and you may be surprised to learn that the ideal time for sales calls is between 4:00 PM and 5:00 PM, according to the buyer’s local time. Additionally, Wednesday and Thursday are the most favorable days for successful cold calls. It is essential to have a sense of when your calls will be most impactful and to make appropriate plans based on that knowledge.
5. Start with a proactive opener
To think systematically, rephrase the text while preserving the same meaning: Your cold calls should have a clear objective – a specific goal you intend to achieve. Every call should have a purpose, and you should start by addressing it. According to insights from Gong, starting a call with a proactive rationale for contacting someone increases the likelihood of success by almost two times compared to calls that start without one.
To be more precise, 82% of buyers are more likely to agree to have meetings with sellers who take the initiative to reach out. Such proactive outreach proves to be more impactful than the alternative approach. It is important to establish your authority and begin the process early in the call in order to achieve your objectives efficiently.
6. Prioritize selling over discovery
Cold calls and discovery calls differ from each other – typically, the latter occurs after establishing a connection with a potential customer. In the course of this conversation, you pose a set of inquiries to reveal the prospect’s requirements, difficulties, and objectives in relation to your offering.
During your preliminary cold call, you do not start that process. When you approach that first conversation, you have selling in mind. Keep in mind that the prospect on the other end of the call most likely has not heard much, if anything, about your company.
When making a cold call, prioritize selling the next conversation rather than inquiring extensively about the prospect’s business, as you should already have some knowledge from your research. Feel free to engage in conversation and utilize Gong’s graphic as a reliable point of reference.
It is not advisable to completely dominate the conversation as it is important to allow the prospect to have a say. However, the graphic demonstrates that speaking for a longer period can improve the effectiveness of your cold call.
7. Educate and inform your buyer
If a potential customer is friendly and interested in continuing the conversation during a cold call, they will likely be interested in learning about your solution. Therefore, it is essential for you to have comprehensive knowledge of your product or service and effectively communicate your expertise.
When making a sales call, it is crucial to effectively educate your prospect about your offering in a limited timeframe. This should be done convincingly enough to generate significant interest and prompt the desired follow-up actions.
To ensure you are effectively communicating the benefits of your solution, it is important to take control of the conversation, directing it in a thoughtful manner and avoiding overwhelming the prospect with excessive questions or allowing them to dominate the dialogue by focusing solely on themselves.
What Makes an Effective Cold Call
To create a successful cold call, a salesperson should conduct prior research on the customer and develop a customized strategy.
Cold calls that are effective are not completely random. They are directed towards individuals who have been identified as open to the product being presented. For instance, a broker may initiate calls to individuals who are engaged in personal finance discussions online or regularly watch business TV programs. Similarly, a supermarket chain launching a home delivery service may solely contact residents who reside in the specific area being served.
Please rephrase the text below while maintaining the same meaning, without adding or removing any information. The text: “Side notes”
Cold calling can be a challenging task for sales representatives, causing them stress and difficulty even if they possess great skills and motivation. However, by dedicating yourself to the task, persevering through rejection, acquiring in-depth knowledge about the product, preparing thoroughly, and staying calm, you will position yourself well to consistently make successful cold calls and achieve desired outcomes.
