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Cold calling has long been the go-to method for sales teams looking to generate interest in their offering and secure more deals. But is cold calling really the best sales method for your business? Moreover, is cold calling even really worth it in 2020?
The benefits of cold calling
Though there are a number of better alternatives to cold calling, that doesn't mean cold calling is completely ineffective. After all, there’s a reason so many sales teams have historically relied on it. In the past years, when businesses were largely phone based, telemarketing allowed people to sell to a wide range of people relatively quickly. However, in recent years cold calling has become much less effective, as people have shifted towards more varied methods of communication, and have generally become more aware of sales techniques.
There are a few key reasons why cold calling is no longer the best option for sales:
Cold calling can actually cost you valuable business
A lot of salespeople take the ‘why not?’ approach to cold calling - if it doesn’t work it’s simply a waste of time and nothing more, but that isn’t the case.
Not only can cold calling be a waste of valuable time for your salespeople, it can actually have a negative effect on your sales opportunities and end up costing you business. Cold calling potential leads when you’re not fully prepared can turn away prospects that you could have secured had you taken a different approach, meaning you’ve already lost them if you don’t take a more strategic approach in the future. This is why it’s essential that you’re taking the best approach when calling potential leads.
People are a lot savvier
Let’s face it, we’re all so used to cold calls and emails that most of us simply naturally block them out. Building trust is very important for sales in 2020, and most people are very wary of salespeople calling them out of the blue. Modern sales requires a more honest, empathetic approach. Try and put yourself in your target customers’ shoes. Would you realistically part ways with your money based on a random cold call?
In addition, sales tactics are shifting more and more to the online world, as an increasing number of people use email and messaging as their preferred method of communication, especially for people they’ve never talked to before.
Not only this, but marketing techniques are constantly adapting with this technological change. People are used to their marketing being uniquely tailored to them, which means that sales techniques that don’t personalise themselves are becoming outdated. As such, cold calling is becoming less effective with time.
Deceptively time consuming
Many businesses believe that cold calling is more efficient than it actually is, as a team of salespeople can make their way through a huge list of numbers in very little time. However, how many numbers you call doesn’t matter, what matters is the results you get. From this perspective, cold-calling is wildly inefficient.
Without thorough research and a genuine attempt to understand and appeal to your prospects, along with many of the people called being unsuited to your offering, cold calling has such a slim chance of capturing the attention of your prospects that the vast majority of cold calls don’t lead anywhere, And that’s if they’re even answered. In fact, reports suggest that more than a third of cold calls go unanswered, leaving your sales team high and dry more often than not. Some may see a failure to get through as simply the loss of a few seconds, but make no mistake, those ‘few seconds’ soon add up! And that’s time wasted that could have been spent researching and preparing a more effective approach with a much higher chance of success.
What’s the alternative?
One of the main reasons many salespeople still rely on cold calling, even if it’s not achieving the results they want, is because it’s just what they’re used to, and they're not sure what the best alternative is. Making the switch over to a new method of sales can be daunting, but it doesn't have to be.
If outbound sales isn’t working as you’d hoped for your business, switching to an inbound methodology could be the answer to your problems.
The inbound sales methodology is based around addressing your prospects specific needs and challenges. Inbound sales involves really getting to know your potential customers’ pain points, and how your product or service can help address those specific pains.
Naturally, this means that inbound sales is research based as opposed to contacting as many people as possible- think quality over quantity. Through inbound sales, you aim to help get your prospects to where they want to be through information and service that’s tailored to them, leading to a higher chance of success per person approached.
Essentially, a successful inbound sales approach means less time wasted contacting irrelevant prospects with the wrong offer, and more successful engagement with your quality leads.
The answer
To answer the question; is cold calling really worth it in 2020? Not really.
Though there are some advantages to cold calling, there are many better ways of nurturing your leads and increasing the likelihood that you’ll land that sale. Essentially, while cold calling isn’t necessarily a complete waste of time, there are more effective methods you should be using.
One of the best ways of securing sales in 2020 is by using an inbound methodology to nurture your leads and address their specific challenges by demonstrating your knowledge of them as a person and your unique ability to help them achieve their goals.
Interested in boosting your sales by making the switch to an inbound sales methodology? Download our free Ultimate Inbound Sales Guide, where we outline everything you need to know about getting the most out of your sales team.
Cold calling has been around as long as the telephone. It’s a technique where a representative for a company calls an individual (a prospective customer) to share their sales pitch. Due to the fact that the call is unsolicited, it's difficult to know how the person on the other end of the phone will react. Cold calling isn’t appropriate for every business and can be challenging to execute correctly. While it can be beneficial because it allows you to reach potential new prospects, it also has its drawbacks. If you are considering adding this approach to your sales arsenal, here are some important pros and cons to consider.
The Benefits Of Cold Calling
1. You Can Reach New Customers
If an individual isn't actively looking for the products or services that your company offers, there's a good chance that they won't ever discover your website. Therefore, it’s your job to go out and find them. With cold calling, you can contact people who fit your typical customer profile and tell them about what your business offers.
2. You Can Master Your Sales Pitch
Cold calling is excellent training, especially for newbie sales reps. It allows you to practice your sales pitch over and over until it’s perfected. Once you have a few conversations with prospective clients, it can also help by allowing you to gain real-time feedback so you can adjust your pitch as needed.
3. You Can Gain Relevant Information And Make A Human Connection
Cold calling can be an excellent way to gain relevant information and to make a human connection with a potential client. When you reach out by email, the person has the opportunity to ignore the correspondence or carefully vet their answer before getting back to you. When you call a person and talk to them on the spot, they may be more willing to provide you with more valuable information.
In addition, you can make a human connection during the call and gauge the prospect's personality, sense of humor and so on, which you can't always do over email, and which can go a long way toward starting a business relationship.
The Disadvantages Of Cold Calling
1. It Can Be Annoying
Let’s be honest: Most people don’t enjoy unexpected phone calls and may find them intrusive and obnoxious. They most likely won't want to take the time to hear your sales pitch and will want to hang up as soon as possible. Plus, since the call is unscheduled, you might catch the person at a bad time or get sent to their voicemail.
2. It Only Works Part Of The Time
Even if you’ve had some success with cold calling, you shouldn’t make it the entire focus of your sales strategy. I've found the conversion rate for cold calling is low compared to solid leads and referrals. According to a 2012 Keller Center report, only about 1% of answered cold calls converted to appointments, and about 28% of completed calls were considered "productive." So, while cold calling could work some of the time, you might hit a rough patch where the people you’re calling aren’t receptive. Another drawback is that you typically can’t predict how many sales you’ll generate from cold calling. This inconsistency could put your business in financial jeopardy.
Making Cold Calling More Efficient
The real question is how can you make cold calling more efficient? First, it’s important to do your due diligence in making sure you’re reaching out to the right person. There is no quicker way to have an unsuccessful call than asking a person about something they aren’t familiar with or aren’t in control of.
Second, always remember to be yourself during the call; don’t read off a script, or you’ll sound like a robot providing information. Know your material and what you're selling beforehand so you can speak genuinely and intelligently about it. This will make a world of difference in your success.
Finally, I've found that it's important to keep the first call you make to a basic introduction about your company or product. You should give the potential customer a strong idea of what you do before you start getting into in-depth detail. The latter could run the risk of confusing them if you apply that information too early in the conversation.
While many people will say cold calling is dead, it isn't and can work if you do it properly. Like any sales skill, it takes consistent effort to master but can be done. The key is to recognize that cold calling is just one tactic in your sales kit. The most effective strategy is generally to use an integrated approach, which includes phone calls, emails and social media. By following this advice, you can ultimately maximize your sales, generate better leads and create long-lasting relationships with your customers.