Effective Cold Calling for Big Profits 2019

Cold Calling for Profits
Cold Calling for Big Profits

Is Cold Calling Dead?

Is cold-calling dead? The answer is either Yes, and good riddance or No, and you’re doing it wrong,” depending on who you talk to.

Whether in the form of the “one-call close” or the “appointment setting” model, cold-calling has become maligned as an intrusive and unwelcome sales technique that is very seldom effective, and should be replaced in favor of other, newer approaches. On the other hand, the counter-argument is that cold-calling still works fine if done right – specifically, if done in a way that quickly communicates authority and value.

So, which is it? The answer is while traditional cold calling techniques are no longer as effective, there are new cold calling approaches which are much more effective. These techniques are applicable to both the one-call close model and the appointment-setting model, and they work because they communicate value from a position of authority.  

In this article, we’ll analyze these new approaches to cold-calling, and we’ll compare and contrast them to older approaches. We’ll see how they can be used with both the one-call close and the appointment-setting model. Let’s set the stage by looking at the older approach to cold-calling, which forms the basis for the claim that cold-calling is dead.  

The Rise and Fall of Traditional Cold-Calling: How “Warm Up & Build Rapport” Became A Nuisance

Annoying Telemarketers
The Wrong Way to Telemarket

 

The older, traditional approach to cold-calling relies on calling a prospect out of the blue and attempting to warm them up and build rapport in order to steer them toward a sale.

This approach has quite the history. Traditional cold-calling follows a script-based approach, building on models which hark back to John Patterson of the National Cash Register (NCR) Corporation in the late 19th century.

Patterson give his salespeople scripts to memorize to ensure that they communicated all of the benefits of the cash registers they were selling. His brother-in-law Joseph H. Crane created the first of this, and in time it became known as the Primer.

The Primer contained a script for, in effect, warming up a prospect and building rapport before moving to the pitch and then the close. Crucially, the salesperson was to approach a prospect with the explanation that they were trying to help the prospect find ways to increase their profit.

If a prospect was favorable, the salesperson could then introduce the cash register and explain its benefits: reduced incidence of theft and more accurate record-keeping.  

This approach forms the basis for traditional cold-calling, which began in the 1950s with the firm Dial America. While Dial America used the technique with great success, over the decades the spread of cold-calling as a major form of telemarketing became such a nuisance to consumers that the FCC rolled out a series of reforms, most notably in 1991. This is the point at which calling hours, Do-Not-Call lists, and disclosures all became codified, providing much-needed consumer protection against intrusive and annoying sales.

Today the case against traditional cold-calling seems overwhelming: 90 percent of B2B decision-makers do not respond to cold calls, and having a personal connection with a buyer increases a salesperson’s chances of landing an appointment 4.2 times over.

One study of the B2C real estate market found that out of 6,264 cold calls made by real estate agents, only 28% were answered (about 1,754), and only 19 led to appointments and 11 to referrals. This breaks down to about one appointment or referral for every 209 calls, not exactly a stunning conversion rate.

From this it would seem that cold-calling is dead. That, however, would be a hasty and incorrect assumption: new approaches to cold-calling exist, and they are too effective to not make use of.

The New Approach: Value-First Cold-Calling

Discuss profits and benefits
Immediately Offer Benefits!

The traditional approach to cold-calling relied on making an introduction, trying to warm up the prospect, and then introducing the proposal, i.e. the product or service the salesperson was selling.

As we’ve seen, this Warm Up & Build Rapport model ultimately failed because it became a nuisance. After the dozenth, hundredth, or thousandth telemarketing call, no one is willing to suspend disbelief and pretend to believe that the random stranger on the other end of the line really cares about them and wants to be friendly.

Besides, it’s an annoying waste of time. Since when did a cold caller have something you really wanted, anyway?

The new approach is in many ways an inversion of the old. It starts by communicating value right off the bat. Instead of an introduction and some preamble to try to build rapport, the salesperson presents the value on offer – the benefits of the good/service on offer – up front.

It’s the difference between 1) introducing one’s self and trying to convince a total stranger to stay on the line while you work up to a pitch, and 2) making a highly targeted pitch that highlights the value on offer and how it is applicable to the prospect up front.

The essence of the new approach starts with the realization that any prospect is going to be thinking Not Another Telemarketer unless you give them a reason not to. Fortunately, once we understand this mentality, it is quite easy to build our approach in a way that is going to be far more successful.

Let’s break down the elements of the new approach one by one.

Happy Man on mobile phone next to wind turbine
Get Your Prospect Interested

1). Highly Targeted

If you contact someone out of the blue and offer to meet one or more of their needs, it helps to know what those needs are. This is where doing a bit of research comes in handy.

You don’t necessarily need to know their quarterly sales forecasts, but before you reach out to them, make sure you have something to offer them. This starts with knowing whether or not they are actually in your target market.

Once you have determined that the prospect is indeed in your target market, you will want to be able to communicate that to them on the phone. This is true whether you are trying for the one-call close model or the appointment-setting model.

People want to know that you are not going to waste your time. Remember, whoever you get on the phone is thinking Not Another Telemarketer until you give them a reason not to think that.

In other words,  “Hi, my name’s John and I understand your company, and some of your competitors” (name a couple competitors)…” is going to work much better than “Hi, my name’s John and I’m in the business of (Talk about your business)…”  

Convince the person you’re talking to that you’re selling something that pertains to them, that is relevant to who they are and what they are doing and what their needs are, and your chances of closing the sale will be considerably higher. With that said, it still matters what, exactly, you are selling.    

2). Benefits Up Front

The next element is Benefits Up Front, or What’s In It For Me (WIIFM). Instead of warming up the target and then trying to create rapport, drop the information about what it is that you are selling up front.

Go straight into the benefits, and you are much more likely to spark someone’s interest. If you think about being the person on the other end, this makes complete sense: if they hear a lead-in to a traditional pitch, they’ll be more likely to be unreceptive, possibly even irked or annoyed.

Remember, everyone hates telemarketers. You’re calling someone out of the blue – for them, albeit not for you as per item 1) – so you need to quickly explain that you have something they are really going to want to hear about.

Lead with the benefits, and people will be more receptive. They’ll be able to quickly see that you are the real deal: not only are you marketing to people who are like them, you have something of real and actual value to offer them.

This also says that you respect their time. Instead of trying to build rapport and do a lead-in to the proposal, you’re being up front because Hey, we’re all really busy after all.

You might even think of this in terms of being a self-aware telemarketer. If you pull off the first two items of this new approach to cold-calling, you’ll be well on your way to convincing your prospect to mentally move you from Not Another Telemarketer to Potentially Worthwhile Telemarketer.

If you can get into that second column, you’ll be a lot farther than most people manage to get most of the time. Your prospect might, at this point, be willing to hear more about what you’re selling. They might be willing to set up an appointment to talk about it further.

With all of this said, there’s still one more element: don’t push it too hard.   

3). Don’t Be Pushy  

A key mistake that traditional cold-callers sometimes made was being pushy. This is one of those things that is very easy to fall into: a cold-caller gets used to rejection, and decides to respond by pushing a little harder.

If you’ve been on the receiving end of a cold call – and of course, we all have – you’ve probably experienced some form of this.

“Are you sure you don’t want to hear more about the great benefits of our [Thing]?”

“Are you sure you don’t want to take advantage of this once-in-a-lifetime opportunity for [fill in the blank]?”

“Are you sure you aren’t interested in saving money by buying our product or service [which you didn’t know existed five minutes ago]?”

Those three examples are invented, but they might as well not be: they are all modeled on a tack that some telemarketers will take if a prospect is dismissing them.

The telemarketer is used to being hung up on, so they think “Hey, why not try pushing a little? Confidence never hurt anyone, right?”

The problem is that your prospect never asked to hear from you. If they’ve heard what you have to say and aren’t interested, it’s irritating and irksome to be second-guessed.

A much better approach is to have the confidence to not push. Remember, you know that you have value to offer the right prospect. Because of this, you know that if you approach companies in your target market and make the case, some of them will listen to you and will take advantage of the great value on offer.

As for the rest, no problem, they are going to do what they are going to do – and you need to communicate this attitude to your prospect on the phone.

Focus on the value you are offering, be confident in that, and don’t push them to reconsider if they seem not particularly receptive. If someone is expressing doubt, graciously indicating that you understand their doubt, and are happy to answer questions if they like – but only if they like – will go much farther than pushing them to see the value you are offering.

If they’re not sure whether or not they want to buy what you’re selling, try something to the effect of: “I’m certainly happy to answer any questions you may have about our product, but I certainly understand if you don’t end up deciding it is right for you at this time.”

Communicate something to the effect of this kind of confidence, and you will almost certainly close a lot more uncertain or uneasy prospects than you would if you pushed.  

Know Thy Prospect: What to Do Before You Dial

Research your prospects
Know your prospects!

Before you pick up the phone, make sure you do your homework. This means figuring out who you should be calling based on what their needs are – or rather, based on their prospects, their pain, and their needs.

Whoever you end up calling, they will be trying to solve a problem for somebody else – or for themselves – much as you are. Your problem is that you need to make sales. They have some version of that problem, too: they have their own customer base they are trying to reach, and any number of internal challenges which may affect how competitive they are, etc.

Don’t merely understand who you are trying to sell to: understand who they are trying to sell to. If you do that, you will show them that you really get what they are up against, and this will help you to make the case that you have something they need.

Once you understand their prospects, make sure you have some idea of their pain. After all, that is what you are there to solve: you have a solution for a problem that they have.

Get a sense for the pain that this problem causes your prospect, the internal inefficiencies or lost revenue or what-have-you, and you will be in a much better position to sell to them in a way that will speak to what their issues actually are.   

Understanding all of this will put you in a good position to understand what your prospect’s needs are. They are trying to reach people, but they have a problem which is causing them pain – and that is where you come in, ready to meet their needs, which you now understand far better as a result of your advance research.

If you think of this as a commandment, it is Know thy prospect. If you know your prospect, you will be able to convert that cold call into a warm lead much more often.

Confident, Direct, and Knowledgeable: The New Approach in Action

Now that we’ve discussed the new approach and knowing your prospect, let’s dig deeper into how we can put it into practice.

The essence of the new approach is confident, direct, and knowledgeable. This is how we want to be when we are on the phone with a prospect. From the very first, we want to set this tone, because it will lead to more sales conversions over time.

Think about it: people like confidence because it projects strength and self-assuredness. By all means be warm and friendly too – in fact, this is very much to be encouraged – but show your prospect that you are confident you have something that is worth their while.

Imagine being your prospect for a moment. A confident person cold-calls you out of the blue, and they calmly and clearly communicate what they are offering and then wait for you to respond.

Think of how much more impressive that would be than a gimmicky attempt to build fake camaraderie or rapport. A confident person knows they don’t have to sell to you by pretending to be your best pal – they know that they have something valuable to offer, and they’re not going to waste your time beating around the bush.

This takes us to the concept of being direct. People do not like to have their time wasted, particularly when they did not ask for the call in the first place. This is one very important reason to be direct, but another is that it reinforces the impression of confidence while also showing them that you respect their time and appreciate every passing second that they do not hang up on you.

Once you have confident – but still reasonably warm and friendly – and direct down, you need to make sure you have being knowledgeable down as well. Fortunately, this should be the easiest part of all: you know what you are selling, you know all about your prospect and who they are trying to sell to, so being knowledgeable should be quite doable.

With all of this said, the new method is not a silver bullet: although you should expect many more conversions, you will still face many rejections. Maintaining one’s confidence and aplomb in the face of rejection can be a challenge. What to do?

Understand two very important things that apply to any sales situation: 1) there are fewer people who ‘fit’ than those who do not, and 2) there are people who need your help.     

No matter what you are selling, how good you are, and how well you target, you will inevitably face more No answers than Yes answers. It’s an important part of sales, that has to be expected. 

People are often very reluctant to buy things from strangers over the phone. This is the limitation of cold-calling: no matter how good you are, you are up against a lot of innate hesitation about buying something over the phone.

This is precisely why it is such a good idea to try to talk your prospect into an appointment. If they are willing to hear you out, talk them into finding a time and place to talk a little more – a time when they will not be distracted by other things.

Another thing to keep in mind is that one conversion may yield a tremendous return on investment. You do not need to win with anything like the majority of the people you call; all you need is for a small minority to say yes.

Ask yourself how much you can expect to make from a single Yes. Now figure out how much you will make from the referrals that a successful Yes is likely to generate for you.

When you look at it like this, it much easier to have the correct, winning mentality.

Conclusion: Cold Calling Today and Tomorrow

The new method of cold-calling is a sharp departure from the past, a revolutionary paradigm change from older approaches that relied on attempting to chat up strangers and then walk them into your pitch.

Instead of Warm Up & Build Rapport, the older method, the new approach calls for leading with the benefits up front – in other words, Value Up Front.

Although it is cold-calling, the new method requires some effort up front, because it is highly targeted: you have to take the time to figure out who you should approach. Once you have the correct target, you can approach them with a Benefits Up Front or What’s In It For Me pitch, showing them you have something worthwhile.

Finally, don’t be pushy – instead, be confident, direct, and knowledgeable. Do this, understand that you only need to convert a small minority of prospects, and you’ll be well on your way to mastering the new approach to cold-calling.