How Effective Is Cold Calling Really?

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Telemarketing–everyone hates getting those intrusive telephone calls, but businesses have to keep up the practice of cold calling prospective customers because it really works, right?

Not necessarily. Finally marketing experts are starting to confirm what I’ve always suspected–when most people get a cold call their main goal is to get the annoying salesperson off their phone as quickly and painlessly as possible.

On Friday, John Jantsch‘s Duct Tape Marketing blog started a discussion on The Abusive Math of Cold Calling. The post contrasts the effectiveness of using pure cold calling to generate sales leads with the effectiveness of using networking to generate referrals before making a sales call.

Guess what? Networking and referrals win, hands down.

The results shouldn’t come as a surprise to anyone who’s ever been on the receiving end of an unwelcome sales call. (I’m guessing that’s all of us, right?) After all, it’s what our instincts have been telling us for a long time.

When you add the annoyance factor to the lack of targeting, it’s no wonder that cold calls are less effective. The classic case of the untargeted cold call is the aluminum siding sales person calling the owner of a brick house.

While the “Do Not Call” laws have impacted the ability of a company to cold call a consumer at home, business cold calling is still popular and in use. In fact, there are still plenty of folks who recommend cold calling as a marketing technique.

Now, I’m the first person to admit that some people are naturally more charismatic than others. In fact, I know that a few people actually enjoy picking up the phone and calling a complete stranger from a list of names with a script in hand. It makes sense that those folks would enjoy a higher success rate. For them, cold calling makes sense.

For the rest of us, however, networking and referrals make much more sense as a way to generate new business. Fortunately, we live in an age with an abundance of networking tools, so networking is easier than ever. In fact, in my opinion there’s really no excuse any more for not qualifying your sales calls before you make them.

Do you use cold calling as a lead generation or marketing technique? How well is it working for you?

Comments

  1. says

    Your targeting methods sound very effective.

    I’m betting that you’d have less success with consumers, though. (If you had a consumer product.)

  2. says

    It’s been a while since I read it, too. But, yes, I was very targeted and methodical with my approach. I bought the Phoenix “Book of Lists” and focused on ad agencies (no success), graphic design firms (most success), and businesses in industries that I had experience in (second most success). I’m not the world’s most organized person, but I had everything in a spreadsheet to make notes of the result of the call and follow-up action. Make your calls with a headset so your hands are free.

    The key, for me, was figuring out the correct person to get to in a given organization, which required a bit of sleuthing. Very often, the lists weren’t right, so you have to be nimble. Once you reach the right person, your pitch can be very natural, since you’re talking to a colleague.

    The second factor was “getting lucky”–there were several circumstances where I reached people who had a project and were looking for a freelancer. (Either they didn’t like who they’d used in the past, or the freelancer had left the biz.)

  3. says

    Hi Jake P.

    Thanks for your thoughtful comment. I think you make a valid point.

    I have read Peter Bowerman’s book, but it’s been some time. Doesn’t he advocate doing a little research first and making more targeted calls? I think that tends to be a bit more effective than simply going through a phone directory or calling list. Also, businesses tend to be more open to cold calls than consumers.

    Still, I’m glad it worked for you. I guess you’re one example of why people still make cold calls. :-)

    Thanks for joining the discussion.

  4. says

    My thought is that it depends somewhat on where you are in your business life cycle. I started freelancing in 1999 and had a great two-year run to start…then the phone stopped ringing when the economy went in the toilet the summer before 9/11. I used Peter Bowerman’s cold-calling strategy in “The Well-Fed Writer,” made about 400 calls, and had remarkable success with it.

    Several of those original contacts are still clients, and the number of resulting referrals was astonishing in the subsequent years. I haven’t made a cold call since then, but it would be the first thing I’d try if I suddenly found myself in a drought. I guess my point here is that I wouldn’t have had anyone to network with or get referrals from if I hadn’t primed the pump.

    I’m not sure I’d describe myself as charismatic, but, yes, I did enjoy the challenge–I will admit that I enjoy the sales part of freelancing as much as the writing/editing/creative part of it!

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