Have you ever met a salesperson who enjoyed cold calling? (Well, maybe one in 100.) How about a buyer who enjoyed receiving cold calls? (Yeah, me neither.) Not only is cold calling tortuous for everyone involved, it’s one of the reasons that only 54.3 percent of sales reps made quota last year.
Cold calling doesn’t address the top two challenges that sales teams face. According to CSO Insights’ 2018/2019 “Sales Performance Report,” sales leaders say the “most impactful barriers to achieving sales success this year” include: difficult competitive differentiation (39.4%) and inability to generate enough qualified leads (37.8%).
Cold calling doesn’t differentiate your organization from the competition, nor does it result in qualified lead generation. It’s a numbers game, and a mostly losing one.
So why is everyone offering cold calling tips when cold calling doesn’t even work? What makes this lead generation technique so ineffective? What about “warm calls”? And better yet, how can you make only hot calls?
What Is Cold Calling?
My definition of a cold call is any attempt to reach a prospect who doesn’t know you and doesn’t expect to hear from you. It doesn’t have to be by phone. Regardless of the way you reach out—via email, social media, text, direct mail, or even a knock on the door—prospects are cold as ice unless they know who you are and expect to hear from you.
Consider the following situations:
- You call someone who downloaded a whitepaper or watched a webinar. (Cold! In fact, that’s why many buyers shy away from gated marketing content.)
- You call a lead that marketing has “qualified.” (Still chilly.)
- You call someone because you got their name from a colleague or friend. (Unless that colleague has introduced you—cold!)
- You call someone and then follow up with a letter. (Colder!)
- The person’s name came from a specific list. (Pull out your wool coat, because, baby, it’s freezing cold outside!)
The key to qualified lead generation is being a welcome call, and for busy executives and their gatekeepers, cold calls are definitely not welcome.
The Odds Are NOT in Your Favor?
Why do salespeople hate cold calling? If you’ve ever done it, you already know the answer to that question. Not only is it uncomfortable; it’s frustrating because it feels like a waste of time. And it is.
There are many different estimates about the number of touches that it takes to reach a cold prospect, and none of them are promising. Both the RAIN Group and Brevit says it takes eight cold call attempts to reach a prospect. TOPO says it requires 18 or more dials on average, and the call-back rate among cold prospects is 1 percent.
That means sales reps spend a lot of time on the phone, getting absolutely nowhere. Worse yet, Inside Sales reports that sales reps can spend up to 40 percent of their time just looking for somebody to cold call.
No wonder quota attainment and qualified lead generation continue to be problems for most sales organizations. Reps are spending nearly half their time looking for prospects who don’t even want to talk to them.
These are just a handful of the stats that prove cold calling is dead. Now, if only there was a way to warm up cold leads …
Welcome to the Warm Call Fantasy
Social media has further complicated the cold calling discussion by introducing the idea of “warm” calls. Let me set the record straight: There is no such thing.
Social channels can provide valuable insight into prospects and decision-makers, which has prompted some sales pros to wonder if cold calling is dead, replaced by so-called “smart” or “warm” calling.
Many salespeople now buy into what I call the “warm calling fantasy.” It goes like this: They’ve researched prospects on social media, identified trigger events, and gathered information from social intelligence. They even have mutual connections on LinkedIn. So, they call or email these prospects and make the business case for a phone call. They really believe they’re not cold calling because they know all about their prospect and even have a few “friends” in common.
They’re sending “warm” emails, right?
Wrong! Prospecting is either HOT or cold … period. Unless prospects know you and expect to hear from you, they probably don’t want to talk to you.
How to Make Hot Calls—Get the Referral Introduction
Cold calling is an outdated tactic that simply doesn’t work with modern buyers. Decision-makers don’t take cold calls, respond to cold emails, or have sales conversations with strangers on social media. These activities get sales teams nowhere and eat up company time and resources in the process.
But it doesn’t have to be that way. There’s a way for your sales team to fill their pipelines with steaming hot leads—no wheel spinning required. All it takes is a referral introduction.
The introduction part is key. Without it, salespeople are still calling people who don’t know them or expect to hear from them, and that’s the very definition of a cold call.
When reps receive introductions to their prime prospects, they’re not just calling names on lists; they’re calling bona fide decision-makers who expect to hear from them and want to take their calls. They get meetings in one call, get in early, uncover pressing problems, build strong relationships, get introduced to others in the organization, and cement their status as a preferred vendor.
Referred reps have already earned trust and credibility before they even place the first call to their prospects, because they’ve been referred by people those prospects know and trust. That trust is transferred from the referrer to the sales rep and sets the tone for the conversation, which is a big deal, considering only 18 percent of reps are trusted during the B2B sales process.
Referred reps don’t get put on the spot and asked who they are and what they’ve got. Buyers know referred reps will share best practices, insights, and an outside perspective—not just pitch products. They know the business reason for the meeting and are curious about what the rep has to offer.
Best of all, the conversion rate with referred prospects is well more than 50 percent (usually more than 70 percent). Try beating that with any other touted business development activities. It’s no wonder that high-growth businesses—companies with double-digit growth—rank customer referrals as one of their most successful sales strategies.
Smackdown: Referral Selling vs. Cold Calling
One look at cold calling success rates should be enough to make sales leaders ask, “Why are we still doing this?” On the flip side, referral selling stats should make them wonder, “Why haven’t we been asking for more referrals?”
Just consider the following:
- 84 percent of B2B leaders start their individual buying journeys with referrals, and nearly 3 out of 4 business execs say they prefer to work with sales pros who were referred by someone they know. (Source: Sales Benchmark Index)
- 76.2 percent of business buyers prefer to work with vendors who have been recommended by someone they know, and 73 percent prefer to work with salespeople who’ve been referred. (Source: IDC and LinkedIn)
- Leads generated from referrals convert 4X better than marketing leads. (Source: Amplifinity)
- Customers referred by other customers have a 37 percent higher retention rate and are four times more likely to refer more customers (Source: InvestPro)
Just imagine if the other 89 percent spent their time asking for referrals, rather than pestering strangers. Their pipelines would be brimming with hot, qualified leads to people who want to hear from them, already trust them, and need their expertise and solutions.
What Buyers Want
Business buyers don’t want cold calls or social media sales pitches, but they do want to engage with your sales team—if your team can provide valuable insights, expertise, and tailored solutions.
In fact, 65.2 percent of business buyers find value in discussing their situations with knowledgeable salespeople, according to CSO Insights’ 2018 report, The Growing Buyer-Seller Gap. An overwhelming majority of buyers (90%) said that they would be open to engaging with salespeople earlier in the buying process, further dispelling the myth that buyers only want to talk to salespeople when they’re ready to place an order.
Research from the RAIN Group confirms CSO Insights’ data. They found that many buyers want to hear from sellers in the first stage: when they’re looking for solutions to improve their business (71%) or when they’re in problem-solving mode (62%).
Referral selling is your ticket for early admittance into the C-Suite. In fact, referred sales reps often get in the door before prospects even know they have a need. They gain access to decision makers. They are credible and trusted, so prospects share information with them about the key players, the budget, and what it will take for them to win the deal. They have meaningful business conversations and get information their competitors don’t. Their buyers tell them the truth.
In other words, a referral introduction doesn’t just get your team in the door. It provides a competitive advantage once they get there.
Now, tell me again why you’re still cold calling?
Want to learn more about referral selling? Check out my acclaimed referral sales system.