With the dawn of social media, a lot of people in CRE sales might be asking, “What is cold calling?” Read on for everything you need to know about cold calling and how to make the most of it.
In this article:
- What Is Cold Calling?
- How Effective Is Cold Calling?
- What Are The Difficulties Encountered In Cold Calling?
- Why Is Cold Calling Important?
- What Is Warm Calling?
- What Skills Does Cold Calling Require?
- When Is The Best Time For A Cold Call?
What Is Cold Calling: Mastering The Art Of Generating Sales From Prospects
At the Massimo Group, we make a huge distinction between cold calling and targeted prospecting. You will even see us say publicly that cold calling is dead. What we mean by that is cold calling is much less effective than targeted, campaign-based prospecting (which includes making a lot of calls). As you consider this post, understand that dialing the phone is an essential skill in CRE, but there are superior methods to utilize.
What Is Cold Calling?
Cold calling is one of the oldest forms of marketing in the sales industry. It is when a salesperson contacts someone who had no prior interaction with him. The salesperson — the cold caller — tries to convince the potential customer to purchase or avail the product or service he offers. Until now, it remains the most common method salespeople use to connect with potential customers.
Usually, salespeople cold call through the phone. However, it is also done through personal face-to-face contact, similar to what door-to-door salesmen do.
How Effective Is Cold Calling?
The salesperson typically sources the phone numbers that he cold calls from phone directories. This would usually entail a lower rate of success because he has absolutely no idea whether the individual he contacts has any interest in his products or services.
Others might ask for referrals from clients who have previously availed of what they were selling. These cases are more likely to come up with a sale because the cold caller already has an idea that the person he is calling is likely interested.
Experts estimate the success rate of cold calling to be at 2%. This means that if you pick up the phone 500 times a day, you are likely to make a sale 10 times. While this particular statistic may seem daunting, cold calling remains very much alive for a reason.
In fact, experts believe that its effectiveness relies heavily on the belief that it is effective. A survey conducted by DiscoverOrg found that 55% of high-growth companies believed that cold calling is alive. These companies experienced a 40% growth over the last 3 years.
In contrast, those who believed that cold calling is no longer effective grew 42% less. According to one CEO of a company, those who believed in that marketing strategy and had the patience and willingness to figure out an effective sales development structure could benefit greatly from it.
What Are The Difficulties Encountered In Cold Calling?
While cold calling has been the oldest form of marketing, it has grown more difficult over time. Salespeople who cold call leads often encounter hangups, call terminations, and sometimes even verbal attacks. Some of the challenges salespeople encounter when cold calling include:
- The view that cold callers are scam artists – Scam artists have the reputation that they use cold calling as their method of defrauding. This hampers the effectiveness of cold calling done by legitimate salespeople.
- The gatekeeper – Salespeople have trouble contacting a lot of qualified leads who might be prospects. The prospects usually instruct their gatekeepers – such as their secretaries – to decline the call as soon as they hear that the caller is trying to sell something.
- The National Do Not Call Registry – This is a database maintained by the United States government in response to the Do-Not-Call Implementation Act of 2003. It lists the telephone numbers of individuals and families who have requested that telemarketers not contact them. While it may stop some unsolicited calls, there are still exceptions to this law.
- The salesperson himself – Sometimes, the biggest challenge encountered by salespeople is themselves. They might run out of motivation from the constant rejection. They might not have enough knowledge of the product or service they are offering. At times, they might simply lack the confidence to pick up the phone and finish the cold call with a sale.
It is a matter of knowing the challenges and learning how to deal with them effectively.
Why Is Cold Calling Important?
Cold calling has a specific purpose – to tap into a certain niche to turn potential clients into actual ones.
A lot of salespeople forget this value because the art of cold calling is difficult to master. However, it remains a powerful tool for those with the patience and willingness to learn it. Those who know how to target the right market benefit from it.
Ironically, the key to cold calling is, perhaps, to master the art of “warm calling.”
What Is Warm Calling?
“Warm calling” is the solicitation of business from an individual who had previously expressed interest in the product. This may have come from different sources, such as survey forms or previous interactions.
Warm calling produces far better results. Compared to the success rate of 2% for cold calling, this so-called warm calling could produce a success rate of up to 50%.
If you know how to narrow your market down, develop an effective strategy, and execute it well, then your cold calling does not have to be so cold.
Make smart calls. Offer your product to individuals in an area where you know that the product is rare or does not yet exist. Try to generate prospects and not mere leads. Source your prospects from referrals. Take advantage of social media to contact people interested in a similar product to offer them your better alternative.
What Skills Does Cold Calling Require?
The success of your cold calls depends largely on your mastery of some of these cold calling tips:
- Mastery of the product or service you are selling – Learn it from top to bottom and from front to back. Anticipate the questions your prospects might ask you and know how to answer them.
- Mastery of the niche market your product is targeting – Knowing who the target market of your product is could make all the difference in the success of your calls. This involves understanding the demographics in the area where you are selling and its compatibility with your product.
- Mastery of the competition – What is your advantage over the competition? What makes your product unique? Why should they, the potential buyers, choose it over what they have had for the past 50 years? If you can answer these questions with conviction, then you are one step closer to making a successful cold call.
- Mastery of the art of speaking – Having a silver tongue is not necessarily a talent you are born with. It is also acquired with practice. Knowing how to speak eloquently and persuasively can make all the difference in the success of your cold calls. It can turn cold leads warm, finish a cold call with a sale, and even completely turn a “no” to a “YES!”
Mastery of these skills gives you the confidence necessary in making cold calls. It helps to spend your energy, time and efforts in a smart way.
When Is The Best Time For A Cold Call?
Dr. James Oldroyd of the Sung Kyun Kwan Graduate School of Business has found the answer to this question after studying over a million electronic logs of over a thousand sales professionals in over 50 companies.
According to his study, the best day to do a cold call is on a Thursday. From his studies, he found that it is 19.1% more likely to succeed than calling on a Friday, which is the worst day to call.
Additionally, he found that the best time to make calls is from 8AM to 9AM and from 4PM to 5PM. Contrary to popular belief, the worst time to call is actually after lunch. Calls made from 1PM to 2PM are 164% more likely to fail between these hours.
Studies aside, there is a best time to call your prospects, and you will figure it out as you make many, many calls to them. Track your results and switch it up.
Want to boost your presence in the industry? Rod Santomassimo, President & founder of the Massimo Group, tells us what it takes to become a market leader:
What is cold calling? It is an art. One that requires a lot of practice, patience and mastery. Those who know how to properly employ it have proven its ability to produce great results.
Are you still cold calling? There is a better way! Top producers don’t cold call, they execute a targeted and proactive prospecting campaign. Here is a 5-minute audit to see how your prospecting stacks up against the best in the CRE industry! Take the Prospecting Audit