January 20, 2017

The ultimate cold calling guide – Use cold calls to your advantage

Cold calling guide

Quite simply, Cold calling means approaching an end customer without a prior contact or appointment so as to promote and sell your company’s product. Over the period of time, cold calling has taken a bad name and there is a mixed feedback on its usage from different companies. Some companies use it, whereas some companies ignore it completely.

Whatever you may say of it, cold calling has been proven again and again as an effective sales tactic. It can be frustrating and irritating for the end customer and even for the sales person involved, but cold calling does get results for the company. Hence, you repeatedly see tele callers and sales guys using various cold calling tactics.

Did you know “The best time to cold call is in the early morning before 11 am or in the evening between 4 to 5 pm. The worst timings are 11 am and 2 pm” – Source – Inside sales and Kellogg school of business

It is likely that Cold calling has more number of problems then the benefits associated with it. However, even though the number of benefits may be less, the value of those benefits is very high.

What are the problems with Cold calling?

The list of problems associated with cold calling are huge. These problems need to be understood first before we understand why companies still use cold calling.

  1. The number 1 problem with cold calling is that it is done without the permission of the customer. And hence, the customers reaction may be inflammatory. If the customer turns angry or dislikes such direct approach, he may ignore the brand altogether.
  2. If the product being presented via cold calls is of a brand which is not yet popular, then the customer will become even more irritated with the sales call, especially if the sales person is not well aware of the product or does not have a perfect pitch ready.
  3. Organizational buyers, even though they require as many vendors as possible, detest cold calling. They feel that cold calling is an act of desperation from the company, and that the companies should be more organized and should have a planned approach.
  4. Tele calling, and cold calling are being used so widely and by so many companies, that customers have become resistant to any sale done through this medium. Rarely will any customer listen to such cold calls.

Thus, there are many problems associated with cold calling. Besides the problems above, if approached via cold calling, there are several ethical standards which needs to be followed by the company in certain industries, especially when using tele calling.

Even with so many problems, why is cold calling used?

Cold calling is used because it brings in new customers for the business. It expands the customer base of the company. If the company used an approach where it does not push the customers, then it is likely that the company will have to do business with only its existing set of customers. Thus, the scope of business becomes very limited.

This is undesirable for the company, because it effectively means that the competitor is regularly building a new customer base whereas our own company is unable to expand. At the same time, cold calling can some times be effective as a feedback mechanism. Example – If a customer has broken away from the brand, he can be brought back if the sales team encounters him during the cold calls and after the sales team has listened to his complaints and resolved the same.

Did you know “50% of sales goes to the first sales person who contacts the prospect when he is in a buying mood” – Source – Inside sales

Cold calling is simply, a proactive approach from the company to stay in touch with the market. Many modern marketers argue, that you should make products which attract the customer and make him approach the company. However, this is not true, and even though your product may be better, the customer might have to be approached to pitch your product so that he realises your product is better. Hence the usage of cold calling.

In organizational buying, even though purchase managers detest cold calling, many a times, cold calling is the only option left for the sales person, because getting to the purchase manager is very hard. Thus, a cold call can prove effective if the purchase manager gives you an appointment.

What kind of sales person is needed for cold calling?

There are many rejections faced when using cold calling tactics or when making cold calls. The resistance by customers to cold calling is generally very high, and in 100 calls made, it is likely that the sales person might hardly get 1 – 2 appointments. In fact, in many cases, the customer might not hear the full sentence of the sales representative.

Did you know “In 2007, an average of 3.5 cold calls were needed to reach end customer. Today, 8 calls are needed, double the amount” – Source – Telenet

Being rebuffed and even rebuked over and over again, can develop depression or stress in the sales person, which is the reason for the high attrition rate in sales jobs. However, if you want effective sales people for cold calling, then the following are the characteristics necessary in a sales person.

  1. Must be Self motivated and ready to take challenge of achieving targets
  2. Must be ready to deal with high levels of stress and rejections
  3. Must have a calculated approach – (Not too aggressive to alarm the customer)
  4. Must have excellent communication skills
  5. Must have good knowledge of the product – And should be capable of delivering a strong pitch within seconds
  6. Must be empathetic – To understand how the customer is reacting and whether he is likely to buy or not.

Cold calling is mostly used in sectors where there is very high competition. Banking, Financial services, Insurance, Travel, telecommunications are areas where cold calling is used most commonly. To address the complaints of customers, the government has also started the “Do not disturb” registry for customers who do not want to receive cold calls or promotional calls at all.

Overall, Cold calling is a tactic not preferred even by sales executives. However, it just cannot be ignored because it adds more customers to the company’s database, which is a priceless benefit for the company. Moreover, there are always those customers who require repeated pushing to finally make a purchase decision. This pushing always starts with the first cold call.

The importance of follow ups with cold calls

Cold calls will ultimately be ineffective if proper follow-up is not done after the cold call. Imagine, that while visiting a customer, you visited another office in the same vicinity and got the name of the purchase manager.

Now you went to your own office, and tried to call the purchase manager. However, you could not get through. So the next time you are visiting the client’s office, you drop in the target customers office again and try to meet the purchase manager. The purchase manager meets and asks you to call in the next month.

The next month, you call the purchase manager, he meets you and then asks you for the quotation. You send the quotation but the purchase guy does not respond. So you follow-up again, and he tells you that the project is postponed and will be in effect 3 months down the line.

You then follow-up after 3 months, and the purchase manager, happy with your efforts, and requiring the product right now, finalised the product with you and gives you the first purchase order from his company to you.

You could not get the purchase order without a follow up for 4 months after the first cold call. The customer would have brought the product anyways, but from a competitor. This shows the importance of follow ups after your database has been built through cold calling. The above is how you build a pipeline with a combination of cold calls and pipeline.

Did you know “An average of 5 follow ups are needed for every positive response by a cold called customer”

So, using a combination of cold calling techniques, and proper follow ups, you can go a long way in adding more customers to your company’s database.

Bonus – 9 Cold calling tips for easy sales

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About Hitesh Bhasin

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