Is the art of cold calling dead? Has cold calling joined faxing and directory advertising in the marketing graveyard?
With so many CMOs and CEOs now diverting significant proportions of their advertising spend to content marketing, email outreach, social outreach, ad retargeting, PPC campaigns, and on-site sales chatbots, it would appear to many that cold calling is in terminal decline.
That's not quite the whole picture though.
Consumer telemarketing is near death
B2C telemarketing has all but been killed off primarily due to the existence of "do-not-call" registers like the Telephone Preference Service in the UK and by the shift from landline to mobile.
How many of us now answer calls on our mobile phones when the incoming number is not recognised? And millions of people have now downloaded apps onto their mobile phones alerting them to whether an unknown incoming number is likely to be a sales call or not.
The B2B cold calling landscape though is very different.
B2B deals are rarely completed without personal interaction
When businesses purchase goods and services from other businesses, most deals are still done with both parties speaking on the phone – often multiple times. One person in this series of conversations is an expert in the products and services they sell – that's you or your rep. The other party is a buyer seeking a specific product or service they believe will help them to make more money or save them money – this is your potential customer.
The more important a product or service is to the running of a company; the more time and deliberation will be taken by the decision makers involved. Making the wrong purchasing decision may threaten the viability of a company if it sufficiently impedes that firm's quality of output or fulfilment. Due diligence is vital in B2B procurement and one important factor in that due diligence is the quality of the personal interaction your company's reps have with a potential customer.
Personal interaction is still therefore of key importance in selling to other businesses. But all of this happens at the very end of the process. So, the question is how do you get your sales reps involved in these types of conversations in the first place?
Know the difference between marketing and sales
Within your business, you should clearly distinguish the difference between the marketing function and the sales function.
Marketing describes the specific forms of activity you undertake to locate potential purchasers of your products and services and establish communication with them. Once your marketing team has found a potential purchaser and they have engaged with them enough to establish a high level of interest, the lead is then passed to the sales team.
The sales team's job is then to convert that interest into a sale by:
- persuading the prospective customer of the suitability of your product and service for the required task
- demonstrating that the product or service you sell (especially if tailored for each client) is good value for money and capable of producing a return on investment, and
- explaining how you continue to work with clients after the deal is done to ensure that they receive the highest quality of effective after-sales service.
Your marketing team has open dozens of potential channels through which they can find potential new clients. The question is – "does cold calling have a place in a modern company's marketing mix?"
What is cold calling?
Let's define what cold calling is first in a B2B sense.
Cold calling is a form of direct marketing. With direct marketing, you select a list of potential clients to contact based upon a belief that they would be interested in your product or service.
Let's say that you run a temporary buildings company. Following the COVID-19 lockdown and re-opening, you conclude that schools will have problem keeping social distancing between pupils, so they are likely to need additional space to welcome back all of their students.
You would then purchase a list of telephone numbers and head teacher names for cold calling. Your telemarketing team (or outsourced telemarketing provider) would then phone each of the head teachers on the list to introduce your company.
When the telemarketer calls, their aim is to secure an appointment with a head teacher to discuss the installation of temporary buildings on school grounds to increase teaching capacity. Their other aims will be to ascertain how many temporary buildings they might need, when they might need them, and when a decision will be made on the subject.
Once an appointment has been arranged, the lead will be passed to the sales team. The contact from the call list has now become a prospect and s/he is now ready for cultivation by the sales team.
Other forms of direct marketing include email marketing, telemarketing, and, to an extent, pay per click campaigns on search engines and on social media platforms.
How and why cold calling successfully circumvents "marketing rules"
Modern marketing theory posits that up to 13 points of contact are required between someone becoming exposed to your company and turning into a sales lead.
It proposes that a potential customer is at the "top of the funnel" when they use the internet to search for answers on a product or a service, they have recently realised they need or might need.
The potential customer moves to the "middle of the funnel" when they have searched for far more detailed information on your product or service and that they are beginning to research potential suppliers.
Finally, there is the "bottom of the funnel" – when a decision is imminent and due diligence is being carried out both of the product or service itself and the potential supplier.
This is the part of the sales funnel, as mentioned earlier in this article, where decision-makers within your target clients begin talking with you and your colleagues face to face and over the phone.
This theory of company-client interaction underpins many modern marketing approaches like content marketing and distribution, PPC advertising using landing pages, and more.
These theories work and they work well. They produce a high volume of incoming leads where customer interest is high and conversion from enquirer to customer is often reasonably straight-forward.
But, for many company owners, the problem is that it's all a bit too passive and the potential customer is a little bit too much in charge of the process and the interactions.
The advantages of cold calling
Cold calling circumvents these marketing rules – they allow you to jump to the head of the queue in the decision-maker's mind.
Contact from a telemarketer may increase the speed with which someone travels from the top of the funnel to the bottom of the funnel.
The phone calls, the meetings, and the email exchanges prompted by an initial contact with a telemarketer may push them through the process much more quickly.
This may also result in a decision to bring their purchasing decision forward. Consequently, the sale prices achieved on deals where the initial approach was cold are often higher. This is because the potential customer is being handled by your sales team who are incentivised through commission and targets to shorten the process as much as possible.
One way to shorten the process is to avoid giving decision-makers enough time to approach competitors as they might do if they were fully controlling the pace of the project.
To take back more control over revenue generation, many B2B companies use cold calling to generate excess appointments and sales opportunities over and above what their more passive marketing channels produce.
The art of cold calling
According to the UK Data and Marketing Association, the average return on investment for every £1 spent on telemarketing is £11.
Often what separates a smaller company from a larger company in the same field is the presence of a cold calling operation. And that's even if the smaller company offers better products, services, and after-sales support than their larger rival.
Successful cold callers use product/service knowledge, knowledge of your potential clients' motivations and pain points, quick thinking, and a friendly assertiveness to get into conversations, answer questions, and elicit important details for the sales team.
The best cold callers are hard to come by and they can be expensive, but they are worth the investment.
Copyright 2020. Featured article made possible by Gabriele Quaranta, bant.io. bant.io have helped dozens of agencies scale and maintain their sales development pipelines by developing a well-defined, systematic outreach strategy for capturing and qualifying leads, enabling businesses to grow much faster.