There is always a lively debate going on in the On Startups - The Community For Entrepreneurs group over at LinkedIn about whether cold calling is effective anymore. Over 285 business development and sales professionals have weighed in so far. I recommend you join the group and join in the conversation. But don’t try cold calling your way in. It won’t work.
Dial Away! What is evident from the comments, unscientific as it is, many professionals have successful careers dialing for dollars while others believe it doesn’t work. It is safe to assume that the results have something to do with the kind of product or service they are selling, their skill and personality, and the nature of the offer. Another factor is the kind of prospect they are calling. If that buyer is accustomed to cold phone solicitations as the standard selling process for that product or service then by all means, dial away.
When you contemplate what the best approach is for you, you have to consider your customer first. After all, isn’t this the enlightened era where the customer is in control empowered with the tools and technology to buy in whatever way they want to? And aren’t we part of that enlightened era too, treating customers with respect, empathy, and understanding? One thing is sure; the jury is still out.
The terms of engagement. Selling tangible, rational or commodity goods or services is very different than creative ideas, breakthrough strategies, and long-term personal relationships underpinning professional services. When what you buy can directly affect your job, your income, and your career, the terms of engagement are very different. No doubt, a highly considered, high dollar purchase involving multiple decision-makers above and below you on the corporate ladder has a profound influence on the buying process.
I asked marketing professionals who hire advertising agencies a few questions about their preferences and practices to better understand the sales process from their perspective. Of course, there is no definitive answer because preferences vary as much as people do. But there is some guidance in their words about how to be more successful in the sales process. For this kind of customer one thing came through loud and clear. Dialing for dollars is the least liked tactic of any. Unsolicited phone calls are at the bottom of the list. Disruption and interruption are not good tactics.
I know people who swear it works, and I don’t doubt them, well some of them. I also asked marketers how often an unsolicited cold call ultimately resulted in a contract and was surprised to find out about 38% of the time. So yes, it can work, somehow. I have no data on the result of that relationship over time, but the opportunity is real, at least 38% of the time. The logical question then is how well will this percentage work? If your total possible opportunity is 38% and your average win rate is 25% of that 38%, your net effective success rate will more likely be around 10%. That’s a lot of dialing for little dollars. You can find more data in this previous post and this one too.
Don’t get me wrong. A phone is an essential tool in ad agency business development. The real focus should be on making warm calls rather than cold, or warm contacts rather than interruption or disruption. If your prospect knows you, knows what you do and how it might help her, your call has a much higher potential for success and your efforts have a much greater chance of winning. But setting up a warm call is much harder work, more time consuming and requires greater investment in strategy and creativity. Many salespeople believe that working the formula of 100 calls will get ten conversations that lead to 1 new client. In my experience and the experience of many successful agency business development professionals that formula, whatever the numbers are, has been on a steady decline. I would enjoy hearing your thoughts and experience with dialing for dollars.
I’ve got a lot of advice on how to make your business development efforts more effective and would enjoy sharing what I know. If you like this post, click the thumbs up, so I’ll know and then sign up for my new business newsletter. Find me on Twitter and LinkedIn for daily tips, tricks, and insights. And, please share your new business advice, successes, and failures. #LetsGrow!