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STOP Cold Calling!

Why is it when the economy tanks, article after article, webinar after webinar, sales strategy after sales strategy promote cold calling as the tried and true prospecting method? STOP cold calling. It’s a total waste of time. Your time. The prospect’s time. And wasting time is stupid. So stop, already.

Welcome to my blog. I will tell the truth and give you my points of view. I will speak out as I haven’t before. This is a forum for ideas, conversation, and dissent (you don’t have to agree with me). I will share with you what I know works in sales. If something that isn’t my area of expertise comes up, I will refer you to the expert.

Repeat After Me: I Will Not Cold Call

I want to scream every time I read one of these cold-calling articles – the authors talk about capturing a prospect’s attention in 10 seconds, crafting a message to reach the decision-maker, navigate through screeners, overcome sales resistance, create voicemail messages that get returned, and have a sales pipeline that can’t be beat. Garbage.
STOP

Cold calling is a tactic, duplicitous, not genuine, and it doesn’t work. Cold calling is a total waste of every salesperson’s time. And cold calling authors have the gall to call cold calling an “art.”
STOP

Consider the following situations:

  • You call someone because you got their name came from a colleague or friend. Cold!
  • You call someone and then follow up with a letter. Cold!
  • The person’s name came from a specific list. Still cold!

These are all cold calls – the person doesn’t know you and is not expecting your call. Even though you think you’ve been able to avoid sounding like a telemarketer, this type of call is still cold. And cold calling is a numbers game. If you make 100 calls, you’ll talk to about 20 people, schedule 10 sales appointments, and if you’re lucky, close one new deal. That’s a 1 percent return on your time.

Whether it’s direct mail, calling on the phone, knocking on doors to make an in-person sales call, or sending unsolicited email, why would you bother with a sales system that gets such dismal results?
STOP Cold Calling

Not only does cold calling have a low percentage return, those who cold call and those who receive cold calls rarely have a positive attitude about cold calls. Research by Huthwaite® surveyed both sellers and buyers about their attitudes on prospecting:

Sellers
• 63 % of salespeople say cold calling is what they most dislike about their jobs
• 88 % of salespeople work for companies that consider prospecting important
Buyers
• 91% of buyers never respond to an unsolicited inquiry
• 71% of buyers find cold calls annoying
• 88% of buyers will have nothing to do with cold callers
• 94% of buyers couldn’t remember a single prospector or message they had received during the last two years

Some authors even suggest that if you cold call the “right way,” you will actually enjoy the process.
STOP

Others say that cold calling is a necessary part of every salesperson’s prospecting strategy, and we all should be doing it. Some salespeople say they are new to a job and don’t have clients or are just out of school and don’t know enough people. Excuses, excuses…
STOP

Want to succeed in sales? Stop cold calling and adopt the only sales strategy where you are pre-sold, have trust and credibility, ace out the competition, shorten your sales process, incur no sales costs, and get a new client more than 70 percent of the time.

It’s called Referral Sales. Why would you work any other way?

39 comments »

  • Dr. Mary Jean Koontz says:

    Hello Joanne,
    I completely agree with you. Cold calling yields dismal results. As an alternative, people with limited funds buy from those they know/trust best. Why not make a list of the 10 colleagues/friends/family you know/trust best, then call them up and ask them about possible projects/needs for your project or people they might know that need your services. Better, yet, ask them FIRST how you can help them increase their number of clients/customers. For example, a friend of mine who has a “women owned body shop” (great work) asked me to simply bring her cards, pass them out at a breakfast meeting I attend and ask that the cards remain in each person’s car or wallet. I did so and this generated a few new customers for my friend….people never know when they might be in a car accident and need her services.

    Are there any trigger events for your product or services? If so, do you know them and do the RIGHT people know about your product or services….this is a great question to think about.

    Have a great day!

    Dr.Mary Jean Koontz
    San Francisco, CA

  • Cesar says:

    so how do you start with NOT doing cold calls?
    you still have not given us ways to start the referrall processes.

  • Cesar:
    Start by making a list of everyone you know. Organize your list by the people you know the best at the top.

    My Article: There’s No Such Thing as a Warm Call gives more tips http://www.nomorecoldcalling.com/articles/No_Such_Thing.pdf

  • brad says:

    How are new leads acquired without utilizing some form of cold call technique? Hell, you said it yourself that any new customer that calls in is considered a cold call! So how am I supposed to get new business by sitting on my ass and taking orders from already existent customers. I’m not buying what you’re selling at all. I have activated 7 new customers in the past two weeks via cold calling during my free time. I suppose I should have just sat here and daydreamed instead of making money. idiot.

  • Trey says:

    Hilarious!

    Make a list and ask for referrals, that is your grand advice? What if you are a new rep in a new territory? Then just wait until someone knocks on your door?

    The reason why there are so many bad salespeople is because they believe there is a magic bullet, keep selling those magic beans, the rest of us will actually work for a living…

  • Randolph says:

    Well, I can certainly appreciate your thoughts, but if all you need to do is speak to someone to schedule an appointment, or qualify them as someone you DO NOT want to work with….I have to agree with Trey, referrals are great, but whenever a Financial Services person calls and says they were referred to me by Joe Blow I wonder why Joe gave them my name, and I ASK Joe why he gave my name out?

  • To Brad:

    I just posted to Geoffrey James’ BNET Sales Machine http://blogs.bnet.com/salesmachine/?p=4365#comments.

    The way Geoffrey defines cold calling is not the way I define it. I never said that any new customer who calls in is a cold call. That is Geoffrey’s definition.

    I define cold calling as calling someone who does not know you and is not expecting your call. It’s an outbound sales calling effort where salespeople or telemarketers are calling from a purchased list or names they’ve been given.

    If someone calls you through a referral, that’s not cold. It’s really HOT! If they took the initiative to pick up the phone or send an email because someone suggested they talk to you, they’re really interested, and most likely, qualified. (You’ll need to decide on that.) As salespeople, we love this kind of sales call. Keep ‘em coming!

  • To Trey:

    Even if you are a new rep in a new territory, people will refer you because of you. People refer those they know, like and trust.

    Making a list and doing nothing accomplishes nothing. Referral selling is a proactive, disciplined process, with specific goals, skills, and metrics. Like anything else, when you work it, it works. If you wait until someone knocks on your door, you won’t have a job for long.

  • To Randolph:

    I wonder why Joe Blow gave your name as well. The referral process works when Joe Blow contacts you, recommends the Financial Advisor (and gives list of reasons) and obtains your agreement to speak with him.

    Otherwise, the Financial Advisor is making a cold call. (No introduction) No wonder you had the reaction you did. Show Joe Blow how to make an introduced referral!Tips here
    http://www.nomorecoldcalling.com/articles/No_Such_Thing.pdf

  • Jeff Esper says:

    Joanne,
    I sell technology B2B. I appreciate your suggestions. It would be great not to have to cold call. What I do to offset the cold call stigma is research and planning. When I call, it is informed and relevant to them.

    I secured the largest initial customer in my companies history by cold calling the Chief Revenue Officer repeatedly. After he finally connected me to the right people on his team, the sales process was underway. As it turns out, my solution has transformed their business and it all started from a cold call. The CRO thanked me for my sales effort.

    I call on some of the largest brands in the world. It’s hard to penetrate their armor, but when you do there’s so much to be gained for both parties if there’s a fit. I choose who I want to go after and that gives me a certain level of control. If you work from referrals or leads alone, someone else is choosing your customers for you and there’s no guarantees that a sale will result.

    My approach is simply this:
    Care enough to research
    Care enough to call
    Care enough to have a genuine interest in providing value and/or solution

    When my prospects get the idea that I care, they care. It’s a relationship. It may start cold, but there’s always a chance it will heat up. In the example I gave earlier, my client would still be struggling with the same problem had it not been for my persistence.

    If your attitude is aimed at finding those who need you, cold calling is much more acceptable.

    • Hi Jeff:

      Some salespeople tell me they are successful cold calling. If that works for you, then continue. While your cold calling paid off (“transforming” your client’s business), the question stands in how much TIME it took to ultimately close the deal.

      People who use referrals as their Business Development/Pipeline development method close more business in less time. Consider how much more business you might have closed during the time you spent trying to reach the CRO if you were actively working your referral network.

      I disagree with this statement you made “If you work from referrals or leads alone, someone else is choosing your customers for you and there’s no guarantees that a sale will result.”

      Actually, when you sell through referrals, you ask for the introduction to exactly the person you want to meet. You absolutely choose your customers. And, when you receive a referral introduction, that person wants to talk to you. You shorten your sales process, ace-out the competition, reduce your cost of sales, and convert that prospect to a client more than 50 percent of the time.

      It sounds as if you enjoy the thrill of the chase. Most salespeople do, and so do I, but what I love the most is talking to sales prospects when I’ve been introduced. You really don’t have to cold call.

    • Steve McGarrett says:

      Hi Joanne,

      I appear to be in the minority here regarding my opinion of Cold Calling versus Referral Sales and that’s fine.

      I am of the opinion as the old saying goes, “Whatever Floats Your Boat.” If you find cold calling works for you, then by all means stick with it.

      I too know of sales people who are in favor of cold calling as it has produced results for them. Some of these same folks however are admittedly afraid of trying something different as they fear risking losing precious time with a new methodology and being “called out” by sales management if the cold calling sales metrics have fallen off the table.

      In many cases, sales managers will demand cold calling as part of the required prospecting repertoire thus giving the sales person little choice of abandoning it for some other prospecting methodology.

      But for me, being in sales, sales management, business development and channel management for nearly 35 years, “referral sales” is clearly the way to go…I say again…for me. There is no doubt that your comments below, are absolutely correct, and I quote you below:

      “Actually, when you sell through referrals, you ask for the introduction to exactly the person you want to meet. You absolutely choose your customers. And, when you receive a referral introduction, that person wants to talk to you. You shorten your sales process, ace-out the competition, reduce your cost of sales, and convert that prospect to a client more than 50 percent of the time.”

      The shortening of the sales process is one of the key advantages of referral sales. Once you begin your referral sales pipeline, it grows dramatically. It can start with personal contacts, (friends), prior clients and even prior employers when you had worked for those companies.

      Engendering trust and integrity is key in the establishing of lucrative business relationships and referral sales provides one with a “fast track” through this process.

      Lastly, the recession, joblessness, downsizing and abysmal economy has created a business environment making cold calling more challenging. Employees are often now performing the work of 3 or more people thus the reason why when calling and getting voice mail, you rarely get a call back.

      In a complex IT environment it is very challenging to leave a voice mail message which conveys a compelling value proposition and a sense of urgency within the few allotted seconds or minute of leaving a message. Any message longer than 30 seconds and you risk being summarily dismissed via a “click.”

      But when you have the benefit of a Referral Sale, you are far more likely to be engaged in a dialogue. I know this for a fact as I had employed both cold calling and referral sales techniques and for me, there is no contest…referral sales yields the best results…

  • Hi Joanne…

    Great article….

    would love to read the article that you mentioned a couple of times:

    http://www.nomorecoldcalling.com/articles/No_Such_Thing.pdf

    …..but the link did not work :(

    Thanks for sharing

    Bobby Wallace
    http://www.charlestonbesthomeloan.com

    P.S. 90% of my production each month comes
    from referrals!

  • Vanessa says:

    I seem to have inadvertently got on a list somewhere that is being ciruclated as for the past month I have been receeiving about 10 cold calls a week from financial advisers in the UK. Does anyone know how I can get my name and number removed from whatever data base it may be sitting on? the calls a positively frustrating.

  • [...] will convert. After you make your initial pitch, you need to plan your follow up calls. Making a blind follow up without considering the client’s needs will be ineffective. Here are a few tips to ensure your [...]

  • Charles says:

    Hey there,

    I just started working in a packaging company as business development and I’m totally new to the industry and the place (where I work). How should do you reckon I kick start my networking without knowing anyone here?

    Thanks in advance

    Regards,
    Charles

  • Hello,
    Let me start by saying that I do not believe that strictly working a referral process can work for all sales situations. For instance, I am a car salesman in a new car dealership, and if I waited for referrals to work I would be eating spam or tuna every night for dinner. I am not saying that a referral system is not a very valuable tool in my industry, however I am saying that it would be impossible to only work off one without already being in business here for 5 plus years. After a while, yes you do accumulate a very large client base that branches off and creates many referrals, but you have to start somewhere to get the first clients. Granted, people come into the dealership who are looking for cars and are doing so because they are genuinely shopping, those are the lambs, the easy sell. However, with all the sales people employed here, it would not be wise to only work off who walks in and what referrals they have to give. Therefore cold calling is a must, without doing the necessary cold calls you would never get as many appointments possible. If you find that I am wrong about this then by all means give me some insight focusing on my industry alone. I would love to hear what you have to say.

    Anthony

  • Hi Anthony:

    Good point. I am a realist. I know that cold calling still occurs, but the goal is to make referrals more and more and cold calling less and less.

    I agree that you can’t depend on walk-ins, but you can sure add them to your contact list and develop a relationship. I encourage you to make a list of everyone you know from all walks of your life. Find out who they know in your area. Make connections. You must actively work the referral process.

    Buying a car today is viewed as a commodity. You can differentiate yourself by the way you relate to your prospects and stay in touch. Set yourself apart from every other car salesman out there.

  • Joe Blow says:

    You are an absolute fool. I have done so much business through cald calling. I would never be in the place I am in now without it. So please just because it doesnt work for YOU, doesnt mean other people can’t be successful by doing it. Just an example of silly statistics, over 80% of traders lose money, still there are some that make millions. Hmmmmmm……

    If you think something can’t be done, dont stop those who are doing it…..

    • Stacey says:

      I believe you are commenting on something that SHE wrote. I am surprised anyone would do business with you. She is not stopping anyone from doing anything. Instead, she is offering other ideas, which is imperative to business. You learn, you grow, and you try new things. She has said numerous times throughout her responses, that if it is working for you, don’t stop. She is also able to offer thoughtful and polite feedback for anyone who disagrees. Why the name calling? You have offered your opinion, your method works for you, and I’m sure that someone has taken what you have said in to positive consideration. Maybe you should take the time to actually READ responses and be a positive person, rather than name calling. It is not polite to act like a pest, much like cold calling. By the way, I cold call everyday. I agree with her AND you.

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  • jeff says:

    Of course an inbound enquiry or referral will be more productive than speaking with someone who has never heard of you, but if you dont have any referrals then your statistics above show that:
    • 37 % of salespeople say cold calling is not what they most dislike about their jobs
    • only 12 % of salespeople work for companies that do not consider prospecting important
    Buyers
    • 9% of buyers may respond to an unsolicited inquiry
    • 29% of buyers don’t find cold calls annoying
    • 12% of buyers will have something to do with cold callers
    • 6% of buyers could remember prospectors or messages they had received during the last two years

    When they’re flipped around they don’t look so bad do they? Over 1 in 3 people don’t mind making cold calls, and 1 in 10/11 calls will give you a chance of drumming up some business when previously you had zero chance.

    Enough to make me consider taking on more staff so that we can cold call, thanks for the information!

  • Tony says:

    I really love how my comment was removed so I will be even more realistic this time…

    My first client was from making cold calls. My second, third, 4th and 5th client were from cold calls. I cold called a business to ask about their point of sale system and they told me to check it out, I sold them a much much much cheaper priced point of sale system, oh yeah that was a cold call.

    I spent $500 for a direct marketing that was very small yet effective to a little area to see how it goes, I got 200 callers that didnt care, between the 300 left, I got 40 calls who were interested, the rest were wanting to waste my time eat popcorn while they tried to agree to a meeting for a demonstration. I called a mere 1000 calls between that time and 40% of my sales came from those cold calls. OH YEAH I forgot to mention how my business was finally noticed was when I started Cold CALLING.

    Point is, dont go telling people to stop cold calling. It may have not worked for you and just because this a new millennium does not mean cold calling is a dead factor. This article makes absolutely no sense and does not provide any help to any business owners by no means. So if you had a glass of tea from a restaurant and you hated it, would you tell the whole world not to drink Tea period?

    I used to drive around to the “high market” areas and park my car and walk the whole city going to businesses and they hated that to the fullest.I wasnt even selling then, I was just introducing myself and I would get kicked out the door, threats for calling the cops. I was even cussed because some low life before me walked in and tried to sell stolen goods so how that look on me? Well I decided to start picking up a phone book and calling Dallas, Texas and sure enough I have clients and built my trust towards them and vice versa OVER THE PHONE FROM COLD CALLING!

    Now I wake up every morning, pick up a phone book and call businesses in the market of interest for what I do. I now provide DVD demonstrations AFTER TALKING TO THE ON THE PHONE FROM MY COLD CALL to promote my product via this DVD to send them for which they give me the address and go from there.

    I’d appreciate it if this message stayed and get a response back not deleted because you hated it like you hate cold calls.

  • cd says:

    Have to agree with last comment. It is not the marketing method but the implementation that is at fault.

    Cold calling is one of the lowest cost forms of marketing there is. It can yield extraordinary results. It works in b2c and b2b marketing very well indeed.

    Problem comes when no or little proper training is given to the one engaging in the activity.

    Sure it has a very bad press indeed but again that is due to it being carried out in a way that creates negativity on the recipient.

    Of course referral marketing is extremely effective as well – when it is organised and used in a systematic approach.

    Cold calling is same – it must be practiced in a strategic way to yield top results.

    I have recently tried to outsource this to outside caller companies with very poor results indeed. Reason is they really were not up to task. So have gone back to using my system and it yet again yields excellent practically zero cost with huge time saving.

    It is easy to get on a hobby horse and deny what others find works. A bit of balance would not come amiss here. Cold calling is effective in business today. It just needs to be handled with care and attention to detail for the results to speak for themselves.

    • Tony says:

      Agreed. Phone call is absolutely free.

      The thing is, people need to get rid of the corporate level written scripts they are used to and write a very very short, to the point 100% TRUTHFUL script speaking in English and use effective and words that benefit their business and what your product does to benefit.

      Never fails, you start to get more qualified contacts not popcorn eaters pretending to want and watch you show off your stuff for an hour and never had intentions to buy.

    • Tony says:

      I also forgot to mention this whole social media mess is out of hand and so washed by the real media… do you really think you will get anywhere with 3000 likes? Does writing a blog pay bills? Jumping on Facebook and LinkedIn never brought me a check. Showing how smart you are(not in a rude way) does not make any business owner in this planet make them want you more.

      Soon as I picked up a phone book and shared my product, I started working like a business should

  • anthony says:

    this is pretty weak. ask grant cardone if he recommends cold calling. if you’re scared and afraid of rejection don’t do cold calling if you don’t have the nerve to get over it.
    otherwise cold calling is the way to grow a business because persistence pays off

    • Tony says:

      “persistence pays off”

      ^ The Winning Comment in My Book…

      When you are selling something truthfully and not following some sort of corporate script, having persistance and CONFIDENCE and knowing when to shout your mouth and speak up during a sell, it pays off. That comment I quoted wins hardcore! Because of cold calling is why I am darn near doing a large mall full of stores as in one call to the right client from calling everyday turned into 4 clients with multiple stores.

      Anthony you should be the social media blogger, you speak truth!!!

      • cd says:

        dead right here.

        Cold calling is the weapon of choice in any marketplace where the phone is still sitting on the business owners desk or in someone’s home.

        The phone is a direct precision instrument that needs the skill of a surgeon to bring home the bacon in a seriously profitable way.

        Those who can – use it – those who can’t – talk about referrals, social media or go networking!

        • Tony says:

          Agreed, now social media, FOR ME, does not work but im not like this guy saying it doesen’t work for everyone. I’ve tried social media and never got anywhere so I dont even bother and I don’t have the resources to do it so instead of my right a blog trashing about social media not working for no one in the world as I nor anyone knows if it does or not… I choose to be on the phone.

          Networking – Works like a heaven sent charm for me though. I put both of those together(Referrals and Networking) during my sales and even on-site with my client. HENCE, this all started from being on the phone! I make a mere 100 calls a day(because i go out and network too) and it’s a half and half thing and I get results both ways. If I was on the phone making 200+ calls a day “I would be in a new corvette with a cam and headers by now” figure of speech but you know what im saying.

  • Dave says:

    This is really a non informative piece. I am not a big fan of cold calling either, but all this article tells me is the negatives, and offers no solutions. As someone that gets all types of leads to http://www.getfoundmarketing.org in both calling, email and person to person referrals. I say that cold calling is rough, but not dead.

    • cd says:

      just found this post on http://wealthmanagement.com/forums/prospecting-marketing-and-selling/cold-calling-motivationcall-action

      It puts some balance back into this argument doesn’t it?

      ————————-start————————-
      Hay – Happy 2013. A lot of you have been reading about and posting notes about cold calling. There are a lot of individual threads and lonely battles going on out there. It’s not easy – but it’s really not hard. As some of you know, I’m knocking out thousands of dials every year. This year will mark my 6th full year in; and I haven’t stopped calling. I get lots of referrals now, but still don’t stop calling. It’s the lifeblood of my practice. The basis of the pipeline. In my practice, I see the pipeline as the single most important asset.
      I see a lot of guys looking for angles. There are no real angles. You have to have a list, a phone and script. What is the best time of day to call? The time of day when you pick up the phone. Who has the best list? You do. If you have a list; it’s the best. Call it. What is the best script? The one that includes your name and asks the prospect if they are interested. Doesn’t the DNC get in the way? Used correctly – the DNC can be a powerful tool. When you find a good prospect is on the DNC – cold walk them, mail them, or ask people for an introduction/referral.

      Today, I knocked out 150 dials – residential. Looking for people who may have interest in a seminar later in the spring. I ran across 4 people who will take the “next step”; accept literature, email, ongoing calls. Took me 2 hours to make the dials; about 20 min to do the follow up. 4 prospects or potential referral sources in 2 hours. Tell me again – please – how cold calling does not work, even in the age of DNC?

      It does work. You have to be disciplined, do it routinely (I did 300 calls during the business week this week and developed 5 other people who will take calls, ongoing drip, etc.).

      Calling back or emailing at least 10 people on your drip list daily – and making 150 cold calls a day is a great way to start your New Year. I have the biggest pipeline I’ve ever had coming into this year – mostly developed from cold calling. You can have your best year yet. Pick up the phone and dial.

      Over the years, I’ve routinely knocked out 3000 – 4000 dials a month. My goal this year is to make 5000 dials a month. I dropped a networking activity that had little result and think I have the time to add the dials. So – I ask you Who would like to join me in making dials? We can make this fun and really gain some headway.
      —————————–end——————————–

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