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Cold Calling - Fish or Fowl?

Written by: Rich Gaasenbeek

Article Overview: In my last post, I talked about how marketing should be used to create leads, NOT sales reps. But what about cold calling you ask? Cold calling is a sales rep role and responsibility yet it creates leads, right? Wrong. Cold calling is actually a form of Marketing NOT sales, since it creates leads not customers. Unfortunately, cold calling is the most expensive and least efficient method of creating leads that exists.

Cold Calling - Fish or Fowl?

In my last post, I talked about how marketing should be used to create leads, NOT sales reps. But what about cold calling you ask? Cold calling is a sales rep role and responsibility yet it creates leads, right? Wrong. Cold calling is actually a form of Marketing NOT sales, since it creates leads not customers.

Unfortunately, cold calling is the most expensive and least efficient method of creating leads that exists. That is because cold calling uses an extremely expensive asset – a human being – to do something that is 95-99% of the time of absolutely zero added value.

Dialing the phone, waiting for it to ring into voice-mail, leaving voice-mails with strangers that will never respond, getting stonewalled by gate-keepers, and repeating the entire process ad infinitum fails to utilize any of the capabilities that define us as humans – our intelligence, our creativity, our ability to develop understanding and relationships. All capabilities that are crucial to sales, but virtually wasted by cold calling.

(Like any good rule, there are exceptions. For example, writing unsolicited proposals is definitely a sales task, yet it’s designed to turn a suspect or prospect into a lead. This is one exception, but I can’t think of many others.)

So why do so many companies rely on cold calling as their primary form of lead generation? Because it’s easy, visible and familiar. “There’s Joe. Look at him pound those phones! My, Joe’s doing a great job.” Of course, you’re paying Joe $3,000 or $4,000 per month (or more!), and he hasn’t really brought in much business yet, but he’s such a nice guy and he’s working so hard, you’re sure he will…

Whereas the $500/month you’re spending on search engine optimization – what’s happening with that?!? Of course, traffic to your Website does seem to be rising as each month passes, the number of leads coming off the Web is definitely increasing, your online sales are on the upswing, and the phone does seem to be ringing more than before – but just WHAT is that SEO firm doing for you anyway?! And of course the same could be said about your PR efforts, direct mail campaign etc.

The bottom line is that as human beings we like what we can see, touch and smell. A bank of cold callers with headsets gets an A+ on that score. Unfortunately, it also gets an F in terms of long term effectiveness and efficiency. A major indicator of the sophistication of any company’s understanding of and approach to marketing is the ratio of its investment in cold calling versus all other forms of demand generation marketing. What’s your firm’s ratio and what score yourself on this question?

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  Is cold calling right for my business?
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Related Forum Posts
Re: Playing sports or games with clients - I say, "Give it all you have!" If you win you'll get to see his/her true character in how he/she handles it. You can learn a lot about a person from how they react to situations. If this caused friction in your work environment, then you probably weren't really enjoying working there anyway and life is too short to work at a JOB. I know it's easy for me to say I'd quit if I was uncomfortable with my boss. Sometimes it's much easier said than done in reality. You just have to strive to be happy whatever you do. Read the books, Fish and Fish, too..... or Fish, Two. Can't remember the exact name, but they are great books.
Re: How to develop sales contacts? - Everyone has the right idea here. Depending on your business, there are different techniques that you could use. For consultants and sales heavy businesses, there are three tactics that I have found especially useful in my business: 1. Attend Networking Events 2. Cold Calling 3. Referral Program 4. Affiliate Program (most successful) The affiliate program was successful for me, as I hooked up with a franchise consultant, and he gave multiple unit businesses that needed my credit card processing services. I highly suggest you hook up with a sales partner, and give him a cut of the monthly revenue.
Re: Direct Mail Postcards - Post cards would be really expensive to send from Japan...but one way to advertise that is not expensive from overseas is by Cold Calling using cheap VoIP equipment. I know Japan has a really good internet connection, so as long as you are willing to stay up late, it might be an option. I cold call from Thailand far, far away from any city using a CDMA wireless internet connection and have had pretty good results. I find tho, that cold calling works best for business 2 business (b2b), rather than b2c products. --matt
Re: Cold Calling - As long as people are out of jobs, you'll probably have a lot of people who say they want to work for straight commission, but if they don't get paid fairly quickly, they usually move on. We've run into that and went through about 500 people (whose resumes looked really good) until we found about 3 good resellers. People just don't want to work for anything. Or they do a good job getting the business but don't do the follow up necessary to make the sale......so they move on thinking they need money NOW. Our business requires all cold calling as well. It's really tough for people to perfect that but there are a lot of good books out there. On is Cold Calling Techniques, by Stephan Schiffman
Re: Keep your image or avatar distorted for more click-throughs - [quote="Kevin":1rxz4jk2]Keep your images or avatars distorted on your social networking site or forum for more click-throughs? Apparently this strategy actually works. In Jan/Feb 2009's issue of "Inc." magazine, writer Max Chafkin says "Fixing the wonky images, for instance (on PlentyOfFish.com), might actually hurt Plenty of Fish. Right now, users are compelled to click on people's profiles in order to get to the next screen and view proper headshots. That causes people to view more profiles and allows Frind, who gets paid by the page view, to serve more ads" (pg 68).[/quote:1rxz4jk2] I don't think what Plenty of Fish is doing is good. People had been compelled to click which is what google will tell you not to do when you are applying for adsense for your website


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