Over the years, cold calling has been one of the traditional sales strategies that many organisations use. The strategy involves calling a list of prospects who are not expecting the sales call to sell a product or service. The purpose is to sell the idea or product to the customer, but in recent times, the effectiveness of cold calling has increasingly declined. Today, many organisations are questioning whether cold calling is a method of the past for sales.
In this blog post, we will explore the relevance of cold calling in modern sales and suggest alternative strategies that businesses can adopt.
Table of Contents
Cold Calling Defined
A cold call is an outbound sales call to targets that the salesperson has no current relationship with. Before the advent of technology and the internet, cold calling was the only way to reach potential customers and close deals. Sales representatives relied on manual dialing, call sheets and some level of knack to get past the gatekeepers to reach decision-makers to pitch products or services.
The Emergence of the Internet
The internet revolutionised the way businesses conducted sales and marketing. Today, customers have access to massive amounts of information about products and services, enabling them to research and compare brands before making a purchase. The widespread digital transformation caused a shift in how customers want to interact with businesses, and cold calling began to lose its relevance.
The Low Conversion Rate of Cold Calling
Cold calling almost always involves a lower conversion rate than alternative inbound marketing techniques. Many factors contribute to this reduced conversion rate: sometimes it is because sales representatives have to reach out to a vast list of customers, and most times, it is because the customers are not expecting the call.
A study conducted by the Keller Centre for Research in Sales at Baylor University found that out of 6,264 cold calls made during the study, 28% were answered, 55% were not answered, and 17% were non-working numbers. This research illustrates how difficult it is to convert customers through cold calling.
Increasing Resistance to Cold Calling
The majority of people are resistant to cold calls, which makes the process even more tedious for sales reps. Most people do not have the time, patience, or interest to engage in a conversation with cold callers. Many consumers in different parts of the world consider cold calling to be invasive, and they find it rude and irritating.
The Legal and Social Problems of Cold Calling
In many countries, laws have been put in place to protect customers from cold calling, sometimes even allowing customers to sue companies that violate such laws. In the USA, the Telephone Consumer Protection Act (TCPA) prohibits solicitation calls made without the recipient’s prior consent. Failure to comply with these laws can result in fines and legal action, which can be detrimental to a business’s reputation.
Cold calling is legal in the UK, but there are regulations in place to protect consumers. The Telephone Preference Services (TPS) allows individuals to opt out of receiving marketing calls. Companies are required to check the TPS register before making calls and are not allowed to make unsolicited calls to individuals who have registered on the TPS. There are also rules for the content of the calls, including identifying the caller and giving the option to opt out of future calls.
In most countries, it is legal to cold call a company as long as you follow certain rules and regulations. It’s important to research the laws in your specific location and industry to ensure you are compliant. Additionally, consider the best practices for cold calling, such as preparing a script, identifying yourself and your company, and respecting the person you are speaking with by asking if it is a good time to talk.
Alternatives to Cold Calling
Businesses can adopt various inbound marketing techniques instead of cold calling to reach and convert customers. These techniques include:
1. Content marketing: Creating and sharing valuable content that educates and informs customers about products or services. This technique can help build brand awareness and establish a relationship with potential customers.
2. Social media marketing: Utilising social media platforms to connect with potential customers and promote products or services. This technique allows businesses to reach a wider audience and engage with them on a personal level.
3. Email marketing: A method of sending targeted and personalised emails to potential customers who have shown an interest in the products or services offered. This technique is cost-effective and can generate a high return on investment.
In conclusion, cold calling is losing its effectiveness as a traditional sales strategy. Customers expect businesses to reach out to them through more personalised and value-based means. Adopting alternative inbound marketing techniques can help a business increase its conversion rates and establish a better reputation with potential customers.
Reexia, along with other sales and business development agencies, incorporates cold calls into its business strategies. Nevertheless, this method is executed with caution and tends to form part of a comprehensive approach that encompasses other techniques, such as email or LinkedIn messaging.