Cold Calling Realities

[AgainstAllOdds]

Man, I don't think you're right.

How many labor hours did it take for you to make 100K calls? What's the net on the products/services you sold? And if I'm reading it right, you didn't close the sale, so there was more manual effort in the process. That's tough math to make work.

In my experience:

• Big-ticket items sell based on the relationship. Cold calls won't work.
• Small-ticket items may sell via cold call, but it's a way cheaper, easier to test, and more effective to use online advertising and sales processes.

I have yet to see a scenario where cold calling wins. Correct me if I'm wrong.

Bullshit.

I hate people saying cold calling doesn't work without doing the math. Take a look at @458's spreadsheet. He had four people calling full-time in August. And one person calling here and there.

From that, he generated $126,000 to $210,000 in value (based on his $3-5k lifetime value).

Upfront, he made $25,158 off of the funnel sale.

Now let's run some more math. Let's say his average sales person makes $100k a year. That's $8,334 a month. Or: $33,334 for his 4 sales people. He paid out $33k in expenses. Received $25k upfront, for an upfront net loss of $8k. However, looking long-term he made $126k - $33k = $93k. Or $210k - $33k = $177k.

Read that again. $93,000 to $177,000 in one month off of cold calling.

But I can see where you're coming from. If you dive into his spreadsheet, then you'll see that his conversion rate per connect is 0.21%. To put that into words: That's one person buying out of 476. Imagine 475 people telling you to F*ck off before the 476th says: "Sure, I'll buy." That takes some balls of steel.

If you look at it from that perspective, then your statement: "Cold calls won't work," makes sense. However, if you look at it from the perspective of: @458 is about to net $1 to $2 million this year off of cold calls. And likely even more as he builds his team. Then you realize how ridiculous and mentally stubborn it is to deny his success.

And before you go off on a rant about how there's a better way... Who gives a shit! This guy is on track to make millions a year off of cold-calling. Who gives a F*ck about "a better way" when you're already making millions -- while growing!

 

[458]

I posted this in my progress thread but i felt it should have its own place. There are a lot of people on this forum claiming to do what we do and i can tell you that numbers don't lie. These are MY businesses numbers resulting from nothing but COLD CALLING ICE COLD LEADS.

Attached are my OUTBOUND COLD CALLING sales stats per each of my individual sales persons and per the room as a whole. Abbreviation definitions are at the bottom of the sheet. Doubled my sales in 2 months, not bad. I expect to double them again over the next two month.

If your so lazy that you won't open an excel, here is a summary of the room from May - Aug:

Total dialed calls - 115,047 (YES, that's one hundred fifteen thousand and forty seven dials)
Total connected calls - 36,166
Total Prospects - 1,010
Total sales - 114 (YES, that's one hundred and fourteen sales made from 115,047 dials, THAT IS REALTY)

Dials to sales is .08%
Connects to sales is .21%
Prospects to sales is 6.96%

Cold calling works, but anyone that tells you that it's easy or some type of miracle drug is selling you a load of shit. This is not for everyone, but its absolutely one of the fastest ways to build a company from scratch and scale it into the millions.

 

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[Yoda]

Man, I don't think you're right.

Here's why he IS right.

Action.

And something tells me they are making some kind of profit or they wouldn't have hit 150k calls. You'd know by then, or you'd have a much, much bigger problem.

These guys have taken a massive action, and are producing a revenue. You might not think it's the highest possible net cash on time, but guess what...

It's not a zero, either.

How many guys are sitting around on this forum mentally masturbating their new Gallardo?

Meanwhile, these guys are in the trenches digging up gold from thin air.

You also forget there are lots of untold down-the-line sales made from this. Referrals, repeat buyers, increasing margins, etc.

He's right. You're just skeptical because you don't want to believe how much work it takes.

Believe it.

 

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[Yoda]

Of course, I'm just explaining my side, I don't take it as if your trying to convince me of anything.

The issue with inbound and our services is in order to get volume calling in or clicking you have to bid on alot less targeted terms and the CPC actually goes up instead of down. This also creates issues with creating a tight knit targeted script.

I actually get organic call ins from a Spanish page I have and those leads are typically a crap shoot.

You know your business better than anyone. I'm thrilled you came and dropped your data here (especially since I've been in the cold calling gig before, and I am a total data nerd at heart). This is a huge asset to everyone reading along, whether they realize it or not.

If there's one thing we can all takeaway, again, it's relentless action. 150,000 of anything is action, whether it's cold calls or eating rice. That's a ton.

And props to you for continuing to do exactly what you are to keep the plane in the air. So many people would have already stopped by now looking for the next shiny object.

 

[458]

Ha, great response and spot on.

To clarify my earlier comment a bit...

I have in fact hired dialers in the past and used them successfully (positive ROI). I've managed contact center agents in my office, in India, in Hungary, and in Argentina.

But, transitioning that dialer work to online lead generation has been much more effective.

Just working "hard" on something doesn't necessarily mean it's the best way to do it.

Of course, everyone's business/situation is different. If this is paying off well for @458 (which is seems to be), then great.

Where costs creep in

The labor, technology, management, training, and building/other costs that it takes to do high volume cold calls can be massively higher than people expect. Without the data on dollars in and dollars out for this model, we're missing quite a bit of important information in that spreadsheet.

General challenge with this model

My biggest pain point with cold callers was recruiting and retention. Great-performing cold callers often were good enough that they were better suited for other roles. They'd move up with us or out. The rest of the cold callers just weren't great employees. It's not the most attractive job, so didn't exactly attract the best and brightest. This all created a lot of "HR" overhead. Constant recruiting, training, and performance cycles.

We have been able to avoid these sort of headaches and costs by moving to other advertising/sales methods.

In no particular order, i can tell you why you had high turn over and i don't:

1. I know the TYPE of person to hire, you probably didn't wait for the right person you were just putting anyone on the phone that walked through the door. Males between 21 to 26 with light telephone sales experience.
2. Your leads were probably garbage, mine our self made and the best in the business. Not to mention, the sales guys get a fresh batch EVERY WEEK like clock work.
3. Your script was probably shit. If you have a sales guy reading a shitty script 8 hours a day hes gonna leave. Ours has been refined over the past 5 years.
4. Your numbers were probably shit. I have access to the freshest mobile and landline numbers known to man.

Any one of these things in isolation will cause high turnover in any sales room and i can almost guarantee it was the reason for yours.

 

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[Torobaro]

Amazing, mad respect for you.

I recently watched a video of Jordan Belfort on cold calling and he stated that the following should work:

• Make 140 cold calls per week.
• You will manage to speak 40 times with the decision maker.
• Of those 40 times you will close 8 meetings.
• Of those 8 meetings you will finally have 6.
• From the 6 meetings you will make two sales.

However he wasn´t talking about a specific product or service.

Best! Great work!

 

[Choate]

My experience cold calling wasn't so cold. I was on a dialer calling leads for mostly auto insurance, but eventually dived into home insurance as well. Difference was my prospects had recently filled out their information online, trying to get an online quote, or were just dabbling around online. But at some point they gave their information to a lead vendor, where the fine print said it was okay to call them. My competition was the 5 to 10 other insurance agents calling them (because we were buying leads from the same lead vendor) and I had about 12 different companies to pitch as an offering, across 15 or so states. Everything was assessed online and could close the sale in about 10 minutes because I was fast with the software, but the actual sale usually took about 20-30 minutes. People need auto insurance though and its a bit of a smaller purchase, averaging about $1.4k per year, but as little as $400 a year and as high as $6k per year depending on demographic, credit, and driving record.

At about 40-50 hours per week, I was selling 40 to 50 new customers per month, or about 2 to 3 new per day. 3.5% total close sale was expected. A good day, you'd limit the amount of people you would talk to to between 20-30. On a bad day, say you get a poor night's rest and your prospects can feel it and hear it, you might talk to 150 people and burn a ton of leads, with no sales.

Cold calling is definitely tough, and without anything to screen them before hand (like filling out info online, or buying from a lead source, or anything at all), it definitely gets infinitely harder. As you can see from his .08% with pure cold calling vs 4% with someone who was previously displayed interest by searching for the subject online (and needing the product).

 

[458]

My experience cold calling wasn't so cold. I was on a dialer calling leads for mostly auto insurance, but eventually dived into home insurance as well. Difference was my prospects had recently filled out their information online, trying to get an online quote, or were just dabbling around online. But at some point they gave their information to a lead vendor, where the fine print said it was okay to call them. My competition was the 5 to 10 other insurance agents calling them (because we were buying leads from the same lead vendor) and I had about 12 different companies to pitch as an offering, across 15 or so states. Everything was assessed online and could close the sale in about 10 minutes because I was fast with the software, but the actual sale usually took about 20-30 minutes. People need auto insurance though and its a bit of a smaller purchase, averaging about $1.4k per year, but as little as $400 a year and as high as $6k per year depending on demographic, credit, and driving record.

At about 40-50 hours per week, I was selling 40 to 50 new customers per month, or about 2 to 3 new per day. 3.5% total close sale was expected. A good day, you'd limit the amount of people you would talk to to between 20-30. On a bad day, say you get a poor night's rest and your prospects can feel it and hear it, you might talk to 150 people and burn a ton of leads, with no sales.

Cold calling is definitely tough, and without anything to screen them before hand (like filling out info online, or buying from a lead source, or anything at all), it definitely gets infinitely harder. As you can see from his .08% with pure cold calling vs 4% with someone who was previously displayed interest by searching for the subject online (and needing the product).

Absolutely. Our demographic is 45-70 year old independent contractors and small business owners. We're catching them in every scenario possible each day, in the car, at a job site, eating lunch, etc. We have to hook them in the first 5-10 seconds, if not there gone.

 

[458]

You know your business better than anyone. I'm thrilled you came and dropped your data here (especially since I've been in the cold calling gig before, and I am a total data nerd at heart). This is a huge asset to everyone reading along, whether they realize it or not.

If there's one thing we can all takeaway, again, it's relentless action. 150,000 of anything is action, whether it's cold calls or eating rice. That's a ton.

And props to you for continuing to do exactly what you are to keep the plane in the air. So many people would have already stopped by now looking for the next shiny object.

I used to be a shiny object guy, i then realized you should never work on more than 2 projects at one time. Thanks for the props, very much appreciated.

 

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[458]

what type of product/service do you sell?

High ticket service. Obviously if your selling $10 widgets these numbers would be a bit different. Each customer is worth $3k - $5k on average after the funnel sale which is what these numbers are. Our funnel sale is $599.

 

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[458]

Bullshit.

I hate people saying cold calling doesn't work without doing the math. Take a look at @458's spreadsheet. He had four people calling full-time in August. And one person calling here and there.

From that, he generated $126,000 to $210,000 in value (based on his $3-5k lifetime value).

Upfront, he made $25,158 off of the funnel sale.

Now let's run some more math. Let's say his average sales person makes $100k a year. That's $8,334 a month. Or: $33,334 for his 4 sales people. He paid out $33k in expenses. Received $25k upfront, for an upfront net loss of $8k. However, looking long-term he made $126k - $33k = $93k. Or $210k - $33k = $177k.

Read that again. $93,000 to $177,000 in one month off of cold calling.

But I can see where you're coming from. If you dive into his spreadsheet, then you'll see that his conversion rate per connect is 0.21%. To put that into words: That's one person buying out of 476. Imagine 475 people telling you to F*ck off before the 476th says: "Sure, I'll buy." That takes some balls of steel.

If you look at it from that perspective, then your statement: "Cold calls won't work," makes sense. However, if you look at it from the perspective of: @458 is about to net $1 to $2 million this year off of cold calls. And likely even more as he builds his team. Then you realize how ridiculous and mentally stubborn it is to deny his success.

And before you go off on a rant about how there's a better way... Who gives a shit! This guy is on track to make millions a year off of cold-calling. Who gives a F*ck about "a better way" when you're already making millions -- while growing!

Pretty spot on, it is definitely an abusive job. I can scale this business solely on cold calling to about 6-10 million in revenue a year at 20% margins with the leads that we generate.

 

[458]

An additional thought/question...

This is tougher to quantify, but there is also concern that cold calling can damage a brand. First, you are "intruding" on people. Second, people making the calls are representing your company. If the type of people that are willing to take these sort of jobs generally aren't the best..are they the people you want as the face of your company?

In fact, a partner in one line of business pulled the plug after 3 months not because of ROI, but because he was convinced this activity was going to cause long-term damage.

Perhaps you make 114 sales on 115K calls, but how many people did you turn off in the process?

@458, do you have any feedback/thoughts on how this has affected your brand? Certainly a consideration to manage.

I'm not Coca Cola and neither are you. We're both cockroaches trying to make big money, worrying about brand recognition is a moot point.

 

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[458]

I like this.

5 person team correct?

4 now, i fired DB. I have a new guy starting on the 12th. Most hiring happens in the beginning of the year.

PS. Im PG on the sheet, i usually don't have time for calls but sometimes ill jump on and talk to these assholes.

 

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[458]

Here are 2019 stats so far:

Room Stats	Total Dials	Total Leads	Sales	Total Connects	Prospects	% D/S	% C/S	% P/S	% L/S	% L/P
January	90,479.00	26,167.00	124.00	27,728.00	1,341.00	0.14%	0.45%	9.25%	0.47%	5.12%
February	80,438.00	13,841.00	81.00	23,433.00	963.00	0.10%	0.35%	8.41%	0.59%	6.96%
March	55,832.00	26,619.00	115.00	19,491.00	1,181.00	0.21%	0.59%	9.74%	0.43%	4.44%
April	56,678.00	22,641.00	92.00	20,517.00	988.00	0.16%	0.45%	9.31%	0.41%	4.36%
May	51,745.00	28,841.00	129.00	16,041.00	1,065.00	0.25%	0.80%	12.11%	0.45%	3.69%
June	95,544.00	32,188.00	147.00	24,587.00	1,638.00	0.15%	0.60%	8.97%	0.46%	5.09%
July
August
September
October
November
December
Total	430,716.00	150,297.00	688.00	131,797.00	7,176.00	0.16%	0.52%	9.59%	0.46%	4.77%

 

[Yoda]

It would be fascinating to see these cold calling results against the same time, effort, and intelligence applied to other marketing/sales methods.

I also agree with this.

I've done the cold calling, and I stepped into inbound. Time-wise... inbound all day.

Cold calling works, period. But at some juncture, I need to add much faster scale.

In either case, do what works, and keep doing it.

 

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[Kung Fu Steve]

Awesome job, brother.

We're running a similar model. Have to in our industry.

I know you're not -- but don't sweat the negativity. You're taking action and making it work!

 

[458]

This is brilliant.

I'm transitioning into cold calling in my business (coaching). It is as @Yoda said, I was always skeptical of cold calling because I was afraid of how much work it took.

And also, I'm going to do it because it works, and then later transition more and more into inbound. But you gotta do what you gotta do first.

@458, any good resources on how to initiate the conversation so that I don't lose them in the first 10 seconds?


Edit: And a question just popped up...What about hiring a company that does the cold calls for you?

I see it's essentially the same as you're doing, you're hiring people to do the calls. But if I looked at my business from a fastlane perspective, my genius zone is in coaching people, not cold calling. What if I leveraged other people's genius at cold calling and have them sending people to me?

I am a closer first and foremost before anything else.

You consider yourself a coach first and foremost, this is where you are making a huge mistake.

In this life you are either buying or selling. If you want to grow quickly and become a dominate force in your space then you will need to learn to be closer first and a coach second. No one cares that your the best, no one cares about you, your product, or your service.

The only thing people care about is whether you can show them that you have something they need enough to give you money, AND show them within a reasonable amount of time, typically 10-20 seconds. No outsourced call center is going to build that for you, you have to build it yourself. And by build it yourself, i mean through blood sweat and tears over 2-5 years of trial and error.

Best of luck.

 

[Tiago]

I am a closer first and foremost before anything else.

You consider yourself a coach first and foremost, this is where you are making a huge mistake.

In this life you are either buying or selling. If you want to grow quickly and become a dominate force in your space then you will need to learn to be closer first and a coach second. No one cares that your the best, no one cares about you, your product, or your service.

The only thing people care about is whether you can show them that you have something they need enough to give you money, AND show them within a reasonable amount of time, typically 10-20 seconds. No outsourced call center is going to build that for you, you have to build it yourself. And by build it yourself, i mean through blood sweat and tears over 2-5 years of trial and error.

Best of luck.

Just want to report back and say that this post really helped me shift my relationship to sales and money.

I've since then started doing cold calls, I am LOVING doing them (of course there is still resistance here and there), and is one of the most effective ways I am generating new clients. My yearly income is turning into my monthly income.

Thank you @458!

 

[Justin Gesso]

Here's why he IS right.

Action.

And something tells me they are making some kind of profit or they wouldn't have hit 150k calls. You'd know by then, or you'd have a much, much bigger problem.

These guys have taken a massive action, and are producing a revenue. You might not think it's the highest possible net cash on time, but guess what...

It's not a zero, either.

How many guys are sitting around on this forum mentally masturbating their new Gallardo?

Meanwhile, these guys are in the trenches digging up gold from thin air.

You also forget there are lots of untold down-the-line sales made from this. Referrals, repeat buyers, increasing margins, etc.

He's right. You're just skeptical because you don't want to believe how much work it takes.

Believe it.

Ha, great response and spot on.

To clarify my earlier comment a bit...

I have in fact hired dialers in the past and used them successfully (positive ROI). I've managed contact center agents in my office, in India, in Hungary, and in Argentina.

But, transitioning that dialer work to online lead generation has been much more effective.

Just working "hard" on something doesn't necessarily mean it's the best way to do it.

Of course, everyone's business/situation is different. If this is paying off well for @458 (which is seems to be), then great.

Where costs creep in

The labor, technology, management, training, and building/other costs that it takes to do high volume cold calls can be massively higher than people expect. Without the data on dollars in and dollars out for this model, we're missing quite a bit of important information in that spreadsheet.

General challenge with this model

My biggest pain point with cold callers was recruiting and retention. Great-performing cold callers often were good enough that they were better suited for other roles. They'd move up with us or out. The rest of the cold callers just weren't great employees. It's not the most attractive job, so didn't exactly attract the best and brightest. This all created a lot of "HR" overhead. Constant recruiting, training, and performance cycles.

We have been able to avoid these sort of headaches and costs by moving to other advertising/sales methods.

 

[Jon L]

I posted this in my progress thread but i felt it should have its own place. There are a lot of people on this forum claiming to do what we do and i can tell you that numbers don't lie. These are MY businesses numbers resulting from nothing but COLD CALLING ICE COLD LEADS.

Attached are my OUTBOUND COLD CALLING sales stats per each of my individual sales persons and per the room as a whole. Abbreviation definitions are at the bottom of the sheet. Doubled my sales in 2 months, not bad. I expect to double them again over the next two month.

If your so lazy that you won't open an excel, here is a summary of the room from May - Aug:

Total dialed calls - 115,047 (YES, that's one hundred fifteen thousand and forty seven dials)
Total connected calls - 36,166
Total Prospects - 1,010
Total sales - 114 (YES, that's one hundred and fourteen sales made from 115,047 dials, THAT IS REALTY)

Dials to sales is .08%
Connects to sales is .21%
Prospects to sales is 6.96%

Cold calling works, but anyone that tells you that it's easy or some type of miracle drug is selling you a load of shit. This is not for everyone, but its absolutely one of the fastest ways to build a company from scratch and scale it into the millions.

what type of product/service do you sell?

 

[avilux]

Those numbers are insane, thanks for sharing. I was told by an old marketing CEO that .5% conversion rates are great. That number alone made me shift most of my efforts into inbound marketing. For startups though, both inbound and outbound marketing is important. It's certainly a numbers game. The law of abundance.

 

[458]

I also agree with this.

I've done the cold calling, and I stepped into inbound. Time-wise... inbound all day.

Cold calling works, period. But at some juncture, I need to add much faster scale.

In either case, do what works, and keep doing it.

Average AdWords CPC in my industry is $25-75. I might be able to scale faster using inbound but I would erode my margins instantly and might even go into negative margins.

I have a direct mailing campaign in the works but only for purposes of making our cold calls alittle less cold.

 

[458]

Are those numbers from running a campaign?

Not wanting to derail, but the Google Keyword Planner is notoriously unreliable, and the only real way to get numbers is to test.

I have ran a small campaign in the past, the issue with our industry is its very low volume even with the untargeted keywords. I would say if you have a old campaign that is pushing $100,000 a month in spend those CPC would drop to around $15 - $30, which is still very expensive and difficult to make profitable.

 

[deepestblue]

LOVE, LOVE LOVE these real, raw numbers in the OP. One of the realest posts on this forum and that's saying something!

Goes to show that it's out there for any man or woman with the brains and balls to go for it and not give up.

 

[Justin Gesso]

An additional thought/question...

This is tougher to quantify, but there is also concern that cold calling can damage a brand. First, you are "intruding" on people. Second, people making the calls are representing your company. If the type of people that are willing to take these sort of jobs generally aren't the best..are they the people you want as the face of your company?

In fact, a partner in one line of business pulled the plug after 3 months not because of ROI, but because he was convinced this activity was going to cause long-term damage.

Perhaps you make 114 sales on 115K calls, but how many people did you turn off in the process?

@458, do you have any feedback/thoughts on how this has affected your brand? Certainly a consideration to manage.

 

[Yoda]

Do your reps use an automated voicemail drop? Saves a massive amount of time if they're currently leaving voicemails manually.

Be careful.

https://transition.fcc.gov/cgb/policy/TCPA-Rules.pdf

 

[458]

Is this assuming the same contact/closing rates?

Inbound leads convert like a S.A.M. bunker firing on a flock of low flying geese compared to cold calling.

Again, if you have your system working, keep it. I'm not here to tell you otherwise, not even slightly.

Of course, I'm just explaining my side, I don't take it as if your trying to convince me of anything.

The issue with inbound and our services is in order to get volume calling in or clicking you have to bid on alot less targeted terms and the CPC actually goes up instead of down. This also creates issues with creating a tight knit targeted script.

I actually get organic call ins from a Spanish page I have and those leads are typically a crap shoot.

 

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[Andy Black]

Average AdWords CPC in my industry is $25-75.

Are those numbers from running a campaign?

Not wanting to derail, but the Google Keyword Planner is notoriously unreliable, and the only real way to get numbers is to test.

 

[Kung Fu Steve]

@Kung Fu Steve and @458
If I understand some of your posts...
You are saying that your service / product is best served by cold calling. Can you name examples of any product / market, other then yours, that is best served by cold calling? Thanks.

In my psychology this is a silly question but I realize we don't have the same experiences.

Cold calling is not a strategy, it's a tactic. It's simply an avenue to market your products or services. It's the same exact thing as a website, or a billboard, or a advertisement in a magazine, newspaper, or yellow pages.

ANY product or service can (and should heavily) be marketed. With testing, you might notice some industries market better in print, some market better on television, some market better over the radio, and some market better on the phone.

My product is tickets to a live personal development seminar.

What I've found from my experience (and following in the footsteps of people before me) is that the best way for me to sell tickets is to get in front a group of people and do a mini seminar and provide tons of value doing that.

In order to do that, my team calls businesses in industries we know are agreeable to such training -- and they attempt to schedule a workshop.

So our cold-calling is to businesses who are looking to grow.

Does that make sense?

You could literally sell anything over the phone... just like you can sell anything on a website... or anything through a radio ad... it's just some industries it's easier or more timely/costly/efficient to market those products or services over the phone versus another medium.

 

[Primeperiwinkle]

Just want to report back and say that this post really helped me shift my relationship to sales and money.

I've since then started doing cold calls, I am LOVING doing them (of course there is still resistance here and there), and is one of the most effective ways I am generating new clients. My yearly income is turning into my monthly income.

Thank you @458!

I think he’s taking a bit of a break from the forum. Just FYI.

 

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