You should review and seriously consider the implications of this posting by Frank Rumbauskas in Sales Tips and Advice.
He quotes a study by the Keller Research Center at Baylor University in Texas.
The study was based on a group of 50 experienced and qualified salespeople, who made a total of a whopping 6,264 phone-based cold calls over a two week period. And the results are far worse than even I would have expected. “Dismal” would be a compliment!
Here’s how it turned out:
– 72% of the calls were outright rejections. People saying “no way,” hang-ups, and so on.
– 28% of the calls were labeled as “productive.” These were people who didn’t hang up right away, showed some interest, gave a referral, asked to be called at a later time and so on. But what’s most interesting is that the majority of the two week study period was spent working on and following up with this 28% of the list. The time that went into it was extraordinary, and very eye-opening when you see the final results.
– That 28%, totaling 1,774 calls, resulted in 19 – yes, that’s NINETEEN – appointments. Out of a total of 6,264 cold calls made!
– The success rate of cold calls to appointments is 0.3% (based on the average closing rate of 20%, that would equate to just under 4 sales, from 6,264 cold calls).
Now that you’ve heard the horrific numbers experienced during the study, here is the conclusion drawn from it:
Experienced salespeople can expect to spend 7.5 hours of cold calling to get ONE qualified appointment!
If these numbers seem scary — and of course Rumbauskas is marketing a lead generation system to “substitute” for cold calls — I know of two examples where cold calls truly succeded, though as you read these examples, you’ll see why they are unlike the typical cold calls that drive sales reps and business “decision makers” nuts.
In the first, in the early years of my business, I decided to expand our Ottawa-based company to Toronto. I joined the Toronto Construction Association and called to set up a meeting to see how we could co-ordinate our publicity with the association.
When I arrived, I discovered that the then-TCA chair happened to be the publisher of a competing newspaper (bad research on my part!). In a truly belligerent meeting, he said he wanted nothing to do with us, he wished the association had not accepted us as a member, and he would prefer we leave town. Then, in passing, he mentioned he wished McGraw-Hill would disappear as well.
I left the room, telling my editor-in-waiting (he never got to see the hostile association leader), that we should henceforth write a positive story about the TCA in each issue of our publication, co-operation or not. I then searched out the number for the Toronto McGraw Hill office, picked up the phone, and explained to the receptionist why I was calling (cold!)
She quickly put me through to the regional director, who decided that indeed we should meet, and when we did, that a strategic alliance would be in order. This co-operation continues today (McGraw-Hill is represented by Merx in Canada now) and the publication, the GTA Construction Report, continues to publish monthly after 16 years.
I learned the second cold call success example from sales guru Jeffrey Gitomer. He described how someone could not connect with a sales manager despite repeated calls. Gitomer decided to prove that reach the person in one call– and did. Of course, the Gitomer’s name is well-known in the sales industry — his call is like having the White House phone you. You take the call.
These examples, of course, prove that cold calling can be effective IF you have an exceptional reason, story, or an incredibly strong brand. Cold calling never works as a rote strategy. Make fewer calls and do more research. Have a great reason for calling, and some unique and powerful reference point or valid reason for real interest, or you’ll absolutely and totally be wasting your time.