The Hidden Cost Of Cold Calling
The majority of sales organizations today continue to mandate cold calling by their salespeople. They do this despite the fact that cold calling has the lowest return of all prospecting methods. Managers like to require cold calling because it is done at the salesperson’s time and expense, not the company’s. They believe that the ability to scrape up some business here and there, on the salesperson’s time, is enough to justify the ongoing activity of cold calling.
What they fail to realize, however, is the dangerous hidden cost of cold calling.
I’m talking about the effect that cold calling has on salespeople. In my experiences in working with hundreds of companies, doing sales training, sales planning, and coaching individual salespeople, I’ve learned a few basic truths that are valid one hundred percent of the time. First of all, companies that require cold calling have the highest turnover of all sales organizations, upwards of seventy-five percent. Such high turnover is disastrous to a company’s long-term profitability. Companies that run a solid marketing program and provide qualified leads to their sales forces have virtually no turnover.
In the world of salespeople, the number one reason why salespeople quit their jobs is the requirement to cold call. And, as you can guess, the number one reason why top producers choose to stay with their employers long-term is because those employers are providing qualified leads and therefore there is no need at all, let alone any requirement, to cold call.
I personally quit jobs because of the requirement to cold call. On the contrary, I stayed at one particular position for quite a long time and was very prosperous there because my manager was actually against cold calling and worked hard to make sure we always had a decent supply of incoming leads. Not surprisingly, we were the most rapidly expanding branch in the country during my tenure there.
Sales organizations that wish to attract and keep the desirable, most professional top producers out there need to start with the basics and implement a solid marketing plan that will generate a consistent supply of leads for the sales force. Anything else will lead to a lack of talent and high turnover on the sales staff. A requirement to cold call repels great talent and attracts inexperienced salespeople who won’t bring in the big numbers every manager desires. A good marketing system, and the consistent stream of leads it generates, attracts and keeps top sales talent.
I am a one-man independent rep agency that has limited lines-see website. I have contacted many of my first tier prospects through sales calling with little results. My products are high quality and very useful in today’s economy.
How do you suggest I approach my territory without cold calling? I have read many books with suggestions which I have tried; sales brochures, getting email addresses and sending out periodic reminders and several others. I have limited resources. Please let me know about some of your suggestions or books to read which explains your approach.
Thank you,
Jason Jentzsch
Jason,
Have you been attending networking events in your area? I have found this to be a very good way of meeting new people and getting the word out. It is also great to follow up with a personal note the following day after the event. This should be sent snail mail. I hope this helps.
David
Jason,
I always think of the fishing analogy. You’ll be able to catch more if you get multiple lines in the water, tend to them and maintain them while making sure the bait is good. Right now with your brochures and emails going out, if you’re not getting a response you should consider changing the message too be more attractive or do something completely different. Don’t sell yourself short. Every business person has a limit of resources, it’s just a matter of making the most of what you have. God bless.
Jason
It’s as old as the hills but always works. Never leave a sales call without getting a referal. “Do you know anyone who may have a need for my product/service?” Always follow this with … “confidentiality is my stock in trade. I will not mention your name.” Also send faxes not e-mails. A fax will always get to the targets desk and they will read it. For some reason people tend to view a fax as an urgent document. Good luck!
I don’t see a difference between a cold call and a referral from a client who asks not to mention their name. Your introduction would have to be the same as if you were making a cold call. You certainly could not say I got your name from someone who asked to remain anonymous.
Hi Jason,
Though Cold Calling is not encouraged, we can not rule out this method of propecting in the early years of a persons Sales Career.
Referal calls , from my experience, assures you 70% closing.
I am selling Insurance products since 2001 in Chennai, India and I stoppe cold calling after three years i.e., from 2004. 3 years perdios is required for any business to establish Credibility in the market and trust worthiness with the customers and clients.
The first and foremost thing that gives me enough number of referals from my exisiting and SATISFIED clients is the way I serve my clients. Excellent Customer Service, in the long run, will give you more and more potential leads.
You will wonder that I have not met many of my customers refered by my stistifed clients. I speak with them over phone, send them the proposal forms and the brocuhre, let them understand the product. Then I call them to offer the best solutions( They Need…I never push any product even if it is classified as the Best in the Wordl) Our prime duty is to explain the benefit in an ACCEPTABLE MANNER only after we explain the product of his choice first.
When you cross sell a products that may be beneficial for the client and his family, he will certainly keep this in mind and will talk to his friends and relatives during family gatherings.
Never give false promises, be confident to say NO some times. This will certainly elevate your image and the customer will strongly trus you that you will not offer any product that does not suit his requirements.
Offer Customer Service with a Real Smile from the depth of your Heart and see the magic it does in your business.
No one is born to Win…please learn to Win. Keep on updating your product knowledge.
God Bless you.
A.Mohamed Ali
Chennai, India