Make sure to check this one out – a quick test of searching lead qualification and “cold calling” using the good ol’ Google Review:
- Go to Google and type in “cold calling” and the result is about 25,600,000 results (0.24 seconds).
- Go to Google and type in “Lead System for Qualified Leads” and the result is about 4,210,000 results (0.30 seconds).
- There were 21,390,000 more searches for “cold calling” than for the more valuable “Lead System for Qualified Leads.”
In this Google review, there are still a lot of people looking for something that is VERY EXPENSIVE, and that is in the process of disappearing (Cold Calling). When you compare the cold call search to a search for something critical in the 21st Century, which saves time and money while growing more profitable revenue, you find 21,390,000 less searches for the critical “Lead System,” which should be part of everyone’s planning.
That quick review makes today’s subject very important.
It seems cold calling is not going away even though in all but the rarest case for the organization, it is too expensive and delivers poor quality and quantity results. Besides that, if we think about this from the customer’s frame of reference, who looks forward to receiving a cold call from an insurance company, a political candidate or a credit card company? Is it any wonder that in the 21st century cold calling doesn’t work?
A proven management principle is to always focus on what you want, which in the world of Revenue Science™ would be “Qualified Leads” for sales to close; not the activity of completing 150 calls daily.
What does it take for a business to survive and succeed? It takes “Qualified Leads” that get closed vs. someone spending the day on the phone dialing when they almost never produce the right amount of the right type of leads at the right time.
There are a lot of leaders and sales practitioners who believe that cold calling is a fundamental part of selling.
The truth is, cold calling is a constantly decreasing part of the business world. Cold calling is still considered a critical part of the job only in places where NO ONE ELSE is producing the right number of the right type of leads at the right time for the sales person to close.
There is the one thing that every sales person MUST do to keep his or her job. That “one thing” is not making 150 calls. That “one thing” is “closing enough of the right type of deals.” Sales people close enough of the right type of deals only when they are in front of the right number of the right type of leads!
Sales people cost a lot of money as does the selling process. Cold calling can be outsourced, replaced with SEO, email campaigns, PR, Keyword Search, marketing programs of all types, and call centers on every continent in the world.
The 21st century requires every business to do go-to-market in a different way. Today, the buyer spends 70% of the time they invest in a purchase before they even talk to the seller. Today’s buyers want to buy – they don’t want to be sold, and cold calling is perceived as hard-core, push-it-out selling.
For my money, the best selling organization in the world is Amazon. They do no cold calling, they don’t have any human sales assets to close the deals, and they sell $61,000,000,000.00 or more in a year.
Business is starting to measure everything, and we support measuring the “Cost Per Sales Hour,” which for almost every company exceeds $3,000 per hour. Forcing sales people to find someone to call on is the single biggest reason for this high “Cost Per Sales Hour.” When sales people spend 10 to 20 times as much effort finding someone to call on (often not even a qualified suspect) than working with a qualified suspect or prospect, then something is WRONG.
For a few years, somewhere in the world there are going to be sales people selling something in the millions of dollars to a few very large qualified buyers, and in this situation, cold calling will appear to work. Even in this situation where it appears that cold calling works, a referral system would do a better job presenting the right buyer at the right time, allowing you to get a higher win rate with a larger margin and more total deals because you are not wasting time “finding” someone who might be qualified and ready to buy.
Don’t allow your “Cost Per Sales Hour” to be out of control because you are still cold calling. Don’t have sales reps who are skilled at closing deals spending their time trying to find someone to sell to. Don’t spend 10 to 20 times the effort cold calling than you spend closing deals (selling).
Do reduce the number and cost of sales people while you are selling a lot more. Do make it easy for your buyers to buy vs. cold calling and pitching — which scares the crap out of the buyer. Do increase the leverage on your revenue investment with both digital and people-to-people referral strategies in place.
Cold Calling and a Referral Strategy can’t live together if you want to stay in business! Do everything you can to eliminate cold calling from your organization and replace it with a way in which buyers will be referred to you when they are ready to buy and already realize you are one of the best possible choices.