Cold calling is defined as “calling on someone who doesn’t know you and isn’t expecting your call”.


Salespeople’s opinion on cold calling often goes one of two ways, they love it or they hate it.


However if you are a professional salesperson selling a high value product or service, there are a few reasons why you might think twice about cold calling your next prospect.


Why not cold call?


There is no question if you are in the low value commodity market selling products out of a bag there may be a case for cold calling. But for everyone else we say (tongue in cheek) that cold calling is a punishment for not getting enough referred leads.


There is no trust or rapport in a cold call, no strong referral or transference of trust, which leaves the salesperson scrambling to get a hook in before the prospect hangs up.


50 years ago when cold calling was the norm for most salespeople, consumers had much less choice in the marketplace, on top of that they had less access to information about the products available to them. This meant an easier buying decision. However in today’s market, consumers have more options than ever, and researching products is as easy as a Google search.


Jeffrey Gitomer author and sales guru has defined cold calling since 1992 as “A waste of time” he has now upgraded that to “A total waste of time” since the onset of the internet.


Salespeople often talk about the “big one” they caught as a result of their cold calling.  The fact remains far more prospects are wasted as a result of this practice than are gained.


Some figures


In 2010 the Harvard Business Review noted that cold calling is ineffective 90% of the time. Meanwhile Selling Magazine found in their survey on cold calling that it typically returns 1% in sales.


This means if you contacted/visited 100 prospects you had identified – typically 20 would give you an appointment and from this you would get one sale.


The question then is “what happens to the 99 that say no? Theoretically we should enter them into our database, get them on our mailing lists, put them into or call cycles and in time convert them into clients. But how long must we wait before we try to contact them again?.


In fact what tends to happen is the cold caller moves on to fresh fields rather than face rejection for a second time.


The real disadvantage of cold calling is it drives up the cost of making the sale as it may take seven to eight contacts to get the first order compared to one-three using a referral process.


If each contact for a salesperson cost the company $100 (costs of contacts can range from $100 to $500 depending on costs associated with the sale e.g. travel, accommodation, support and other opportunity costs) a cold call which eventually results in a sale may cost $800 compared to a referred sale costing $300. This doesn’t take into account the costs of visiting 99 prospects who say no.


The essence of all this is if you have a commodity type product/service then employ a minimum wage telemarketer and give them the training and systems to make these calls.


The solution?


The question then is if we are not cold calling, how do we generate leads? The first thing to understand is who our market is.  


To this end I found an interesting study online which found –


At any one time just fewer than 10% of your potential clients are actively looking for you.  These are the ones who respond to your advertising and marketing.  


The challenge of course is they have identified a need for what you offer, however they are looking at all options and are therefore very much price focused.


The other 90% aren’t actively looking but do have a need that you can help them with.  The key is to be introduced before they start actively looking.  This is where a strong prospecting plan comes in.



Brett Burgess
Business Development Manager/Facilitator

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