No one really likes the idea of being on the giving or receiving end of cold calls. The name alone is enough to give you chills. Maybe that's why some refer to the practice by the more euphemistic term 'prospecting."
'There's the old adage that 90 percent of people hate cold-calling and the other 10 percent are lying,' says Brian Carroll, CEO of InTouch Inc., and author of the book, Lead Generation for the Complex Sale.
However, even in today's business world, picking up the phone remains one of the best ways to reach an organization's senior executives. A 2007 survey by MarketingSherpa, a research firm that tracks what works in the marketing profession, found that only 11 to 17 percent of business prospects were annoyed by getting an unsolicited cold call. On the other hand, 45 to 53 percent of the executives interviewed said that a cold call they received had helped vendors leapfrog onto the consideration shortlist for purchases.
In order to get onto that shortlist and beyond, here are some tips on how to prepare for a cold call, what to say when you start calling, and how to turn those calls into sales.
Cold-Calling 101: How to Prepare
The reason people still cold-call is that the technique can lead to a meeting, a pitch, and an actual sale or sales relationship. 'It's done by lots and lots of people all over the place and it works. People do buy. But the percentages are small,' says Peter Handal, CEO of Dale Carnegie, an international training and consulting services company that helps businesses sharpen sales skills and improve performance. He says he has heard estimates that between 5 and 10 percent of calls are successful – but success is measured by just getting to the next stage of the sale, such as an appointment or another call, not necessarily closing the deal.
'Cold-calling is a numbers game,' Handal adds. 'You have to make lots and lots of calls.'
But simply carpet-bombing purchasing managers with calls won't get you far. You need a real plan of attack.
Determine Your Objectives In Cold-Calling
The first step in preparing to do a round of cold-calling is setting a goal for those calls. Are you truly trying to close a sale in that first call? In business-to-business transactions, purchasing decisions are usually made over a longer period of time. A series of calls or meetings, a product demonstration, or other interactions typically precede a signed contract. Even though many sales, particularly those under $50,000, are made over the phone, you may want to ratchet down your expectations when making cold calls, Carroll says.
Think of the phone as an extension of your lead-nurturing program, which is all about having consistent and productive communication with viable prospects (those that are a fit for your product or service), regardless of their timing to buy. You shouldn't try to use pressure tactics in the first phone call, Carroll says. Rather, he adds, it's about building long, meaningful, and trust-filled relationships with the right people.
A more realistic goal could be to simply identify the person at the organization in charge of purchasing decisions for your product or service and make an initial, positive contact with them. 'When you have a complex sale, the hardest thing for sales people selling to small or mid-sized companies to do is to get a foot in the door to talk to the right person at the company,' Carroll says.
Another possible objective is setting up a face-to-face meeting. At the very least, you could arrange to send a sales package to the purchaser and follow up with another call or contact. What you hope to achieve during a call will directly impact what you will say during it.
Assemble a List of Potential Sales Prospects
It's important to build a list long enough to sustain however many calls you want to make. Start with a profile of your ideal customer by looking at your current customers and who they are. 'Look at the industry, the size of the companies involved in the buying, study your past sales -- and that will often tell you who you should be calling,' Carroll says. If you are still not sure, or if you have a new product or service, look at your competitors and their customers to get an idea of the type of companies you want to target.
Rather than developing their own list, some companies may purchase one from a third-party provider, such as InfoUSA Group or Dun & Bradstreet. If your company doesn't have the money for those resources, there are an increasing number of ways to search the Internet for suitable companies – and points of contacts at those companies. Carroll recommends Jigsaw, a free service recently acquired by Salesforce.com that includes a database of 21 million up-to-date and downloadable business contacts. He also says social networks, such as LinkedIn, can be useful in searching for contacts at companies or even finding intermediaries that could introduce you to key sources at companies you are targeting.
Research Your Target Companies and Their Industries
Your chances of making a productive cold call will be vastly improved if you have knowledge about the companies you are calling and the industries they operate in. Read annual reports, news releases, websites, and any news reports you can find about the company. Letters to shareholders are another valuable source of information, as they tend to focus on the company's top priorities, which you can reference to position your products and services. Also, look closely at the company's financial position. Is it growing? Profitable? These offer more talking points in your conversation.
By demonstrating to executives that you understand their business and, more importantly, their concerns about their business, they'll be more receptive to speaking with you. To that end, not every call needs to be about a sale; some calls can be dedicated to simply gathering more information about an industry. Others can even be less formal. Handal says he knows of a sales executive who used to spend one day calling sales managers, and the next day calling people in a certain industry. 'On Fridays, he would call sales managers and introduce himself and say, ‘I'm calling to take a poll. Are your salespeople out playing golf today or are they at the beach,'' Handal says. 'It was a way to open the door to conversation and it would catch peoples' attention. It's important to break the ice and begin to build a relationship.'
Cold-Calling 101: Making the Call
For cold-calling to be successful, you must offer a fundamentally sound message and be able to carry on an intelligent conversation on the subject at hand, Carroll says. 'Your prospects need to believe that you always have their best interest at heart and you should if you want to use cold-calling as part of the bigger complex sale,' he adds. Understand too that you can reach out to multiple contacts in a company, and don't limit your cold-calling to just one job title. The more complex the sale, he says, the more willing you should be to reach out to multiple people.
But the devil is in the details and deciding what to say on the call makes all the difference between whether you accomplish your objective or you hear a 'Not interested' followed by a click on the other end.
Here are some of your options:
Components of a 'Call Guide'
'The most important thing is using this call guide to help discover the information and drive toward your objective,' Carroll advises. 'Determine what are the questions that would help you drive that decision maker to set up a meeting or agree to a demonstration.' Those questions should include what your goal is for the call, what your value proposition is, and how does that value proposition connect to the person and the company you are calling. He suggests writing out the questions in an order that helps you move toward your purpose of the call.
Here are some questions Carroll recommends:
Sometimes, an interesting 'hook' can reel in a call recipient and keep them hanging on. Handal says a colleague at Dale Carnegie still talks about the cold call he received from an advertising agency. 'The sales person said that it was his job to read The Washington Post every day and pick out ads that were ineffective and then he said, ‘Your ad qualified today,'' Handal says. 'That is the kind of pitch that either turns someone off as being critical or grabs their attention.' In this case, it grabbed the Dale Carnegie executive's attention and he set up a meeting.
Cold-Calling 101: Turning the Call into a Sale
Even though the vast majority of calls won't achieve your objectives, the following steps can help you turn that initial sales call into something more.
Lastly, always remember to follow up. 'It is crucial that you follow up on your prospect's needs promptly and relevantly,' Carroll says. 'Keep in mind when you follow up that you also need to ensure you do so in the manner requested. If they decline a follow up phone call but ask you to e-mail them, make certain you do so.'
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