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48 Hours with the King of Cold Calls

A salesman par excellence talks about the rewards of cold calls.

The marketing sophisticates say cold calling is dead -- that it's too expensive, too untargeted, and too ineffective to pay off. Chuck Piola, 15,000 cold calls and one fast-growing company later, disagrees

Center City Philadelphia on a raw winter morning. Chuck Piola bursts out of his black Mercedes singing in full throat (this time it's the Drifters tune "Under the Boardwalk," handled off-key but with feeling) and scans a cluster of skyscrapers. He points to a building with particularly striking architecture. "Let's try that one," he says.

It's the Bell Atlantic Tower, 52 stories tall. He strides quickly through the lobby, carefully avoiding eye contact with the security guards. In the elevator he glances at the buttons and pushes 40, a shot in the dark. The elevator rises, and Piola pops out. Straight ahead is a law firm he's never heard of before.

"I wonder if you could help me out?" he asks the receptionist, opening with his favorite line. "I represent NCO Financial Systems. We specialize in discreet recovery work for companies having trouble collecting receivables. Our clients include Bell Atlantic, a lot of doctors and hospitals, and even the Philadelphia 76ers. I happened to be in your building, and I wondered if I might see whichever partner handles your finances." His tone is upbeat and cordial.

The receptionist, polite but skeptical of unannounced visitors, gives him the once-over. He seems to pass. "That would be Mr. L.," she says. She points to an inside line. "You can use the phone back there." Alas, Mr. L. is not available. Piola thanks the receptionist and leaves a business card.

By the elevator, a tall gentleman is meticulously fitting wraparound glasses behind his ears. A detail man, notes Piola as he strikes up a conversation.

"Beautiful offices," he remarks. "Are you with the firm?" The man is. "Arthur Newbold," he says, extending his hand.

At a glance, Piola notices that Newbold's shoes are unshined and his slacks pressed carelessly if at all. Either a nobody, Piola thinks, or someone so high up that he's past the $900 suits, all the show. Piola decides it's the latter and again makes his familiar pitch. At the end he mentions Mr. L.

"No, no," says Newbold. "The person you want is Rich Rizzo. He'd handle that."

Piola thanks him and returns to the front desk with the new information. Newbold, it turns out, is a partner, and the receptionist sits up a little straighter at the mention of his name. She cheerfully provides Rizzo's number and again offers the inside phone. Rizzo picks up, and, yes, he is interested in learning about NCO Financial. But today is impossible, he tells Piola. They agree to an appointment two days hence.

"Bingo!" says Piola. The first cold call of the day, and already things are looking good. The 400-lawyer firm has millions of dollars' worth of outstanding fees, and Rizzo is the partner who handles finance.

* * *

True cold calling -- the face-to-face pursuit of unqualified prospects -- has long carried a whiff of the unseemly. But today it is in complete disrepute. By some estimates, a single industrial sales call now costs $400 or more, what with travel expenses, support costs, pay, and benefits. Few companies want to risk that outlay on a crapshoot, so they equip their reps with leads generated by telemarketing, direct mail, and trade shows.

"The days of sending a foot soldier out in the field to randomly call to qualify are over," says Gary Hultgren, director of sales training at Moore Business Forms, a $2.5-billion company in Lake Forest, Ill. "Cold calling has almost become a dirty word because of the economics. I don't see how anybody does it anymore."

Gary Hultgren, meet Chuck Piola. In a 15-year sales career dating back to when he sold phone-directory advertising door-to-door, the former high school history teacher estimates he's made some 15,000 cold calls. He thrives on "going in raw," as he puts it, taking the business to the street.

In 1986 he teamed up with Michael Barrist to revive NCO Financial Systems Inc., a collection agency started by Barrist's grandfather in 1926. Today, with 63 employees, they operate from a sprawling suite of offices in Blue Bell, Pa., near Philadelphia. Their client base -- 64 when Piola started -- has reached 1,700. Their computer-directed machines generate some 120,000 collection letters each month. And NCO's billings have reached $3.5 million a year, growing so fast that the company has made the Inc. 500 three years running.

Piola, the executive vice-president, heads a sales staff of six. And he credits the company's rapid rise not to some highfalutin marketing system but to old-fashioned shoe leather -- walking in doors and telling his story.

Sure, he's heard that cold calls aren't cost-effective; he just doesn't believe it. "Some accounting operation crunched those numbers," he says, dismissing the point as though waving away the merest gnat. What the bean counters ignore, he contends, is the multiplier effect. "When you cold call, you maximize your opportunities. You meet people. You can thread a sale from one person to another, and you never know where it's going to lead."

On this day -- the first of two he's set aside to work Philadelphia's high-rent district -- it has already led to Rich Rizzo. Piola says he never would have reached him through direct mail or telemarketing. Rizzo took the call, Piola says, because he mentioned Arthur Newbold.

"You've got to put yourself in a position to meet somebody who'll be receptive, and that won't happen unless you see people," he explains. "The goal of the cold call is to get the appointment. You have to at least get up to bat."

Back on the street now, he darts into Two Logan Square, another tower.

In an hour he works his way down the building, hitting 10 companies -- law firms, insurance outfits, ad agencies, investment banks. At each stop, of course, receptionists protect the entrance. Getting past them on the phone can be tough -- that's their power base. But face-to-face cold calls are rare enough now that this defensive perimeter is easily penetrated. "Nobody knows how to handle cold calls anymore," Piola says. "I get through because there's no system to stop me."