Is cold calling really that bad?

[77startup]

Hi guys,

Is cold calling really that evil? It seems like just mentioning it makes everyone flee.

 

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[The-J]

It sucks mostly because you do it lots with little results.

I believe JAJT and a few others have worked in sales so they have a lot of experience doing it. They've enlightened us on how to do it right in the past.

 

[nzerinto]

I've done cold calling before. In my case I had to develop a thicker skin, because I would take hang-ups and insults to heart, when the right way of looking at it is that its not you - its the product or timing they are denying.

There were a few invaluable things I learned doing it:

1. Tone of voice and delivery. Incredibly crucial for what we were selling (financial products). It's a psychological thing - they need to feel like you are in control and know what you are talking about, without sounding too seedy/slimy.
If it was a different product, the delivery would need to be different.

2. A "no" is not always a "no" - it can be a "maybe" or "now is not the right time". This has been covered already in movies like Glengarry Glen Ross ("ABC!") and Boiler Room (incidentally enough my job resembled the Boiler Room - the boss even told us to watch the movie for training, lol)

3. It's a numbers game. Regardless of what the product is, you'll find someone willing to pay for it. It was uncanny how we could drill down the numbers. We knew if we got through to 100 people (actually spoke with them, getting past the gatekeepers etc), we'd be able to set appointments with approx 20-30 of them, would end up actually meeting 10-15 of them, and sign deals with 2-5 of them. Obviously numbers differ depending on the product and industry (and locale), but it consistently followed the numbers. I used it as a motivator, because if I saw the numbers stacking up with no success, I knew a "yes" was just around the corner. It was probably a self fulfilling prophesy actually, because I probably sounded more confident and less likely to take a soft "no".

The turnover rate was atrocious, as you can imagine. I only lasted a year, and I only quit to start my own company (doing something entirely different).

 

[Kak]

It is just a phone call...

Sent from my SPH-L710 using Tapatalk 2

 

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[Mike.B]

A "no" is not always a "no" - it can be a "maybe" or "now is not the right time".

I'd rather have "no" all day long then a "maybe".

 

[JAJT]

I have to run into a meeting but if you have specific questions I'm happy to answer a bit later.

I'll just say this: nzerinto is 100% correct about the numbers. You wouldn't expect the statistics to work so perfectly but THEY DO. Make enough calls and you can get an almost 100% guarantee of what is required to get the results.

X calls = Y connections = Z sales.

Then you can start having fun. Even incredibly small changes in execution will change those numbers and you can SEE THEM change, with accuracy. You can then refine and refine until you get what you believe is an "optimal" and repeatable strategy.

As far as fun? Not for me. I hate it. I have a friend who LOVES it. Depends on who you are. It works though...

 

[JAJT]

It seems like just mentioning it makes everyone flee.

Something else to keep in mind.

Many people give their opinions to cold calling based on how THEY react to cold callers, then extrapolate that into a business-wide fact. After talking to a few people it's not hard to start believing that cold calling is outdated and archaic and has no place in modern business.

Fact is, if you go ask any cold-caller, they will tell you it still works. This is because even if 19 out of 20 people say "F*ck off", it's that 20th person that gives you the time of day that makes it viable.

How long does it really take to get 19 people to tell you to F*ck yourself? 30 minutes if you are leisurely about it? Let's say you are selling a service that costs $20 per month and solves a real problem (meaning they keep it after signing up). It just took you 30 minutes to generate $240 per year. Let's say you work for 4 hours per day on the phone. That works out to 8 sales per day, on average (some days you'll have 0, others you'll have 16, that's averages for you...). You just generated $1,920 per year in one day.

Now repeat that every day for a week. You are up to $9,600 per year, per week. After a month you are up to $38,400 revenue per year. After year 1 you'll have created a $460,800 business off the phone, working half-days.

Now hire 5 people to hit the phones. $2,304,000 is the result. Get enough people using your service and word of mouth is going to start bringing referrals in as well. People will start talking - free marketing. Think someone might want to buy you out with a $2m business, 5 people and recurring revenue stream? Very likely.

Now this is an example in a bubble. You'll have overhead and cancellations and only so many people in the world you can call to offer your services to. Your success rate might be much higher or lower, etc...

Make no mistake, this is a practice built around a 90+% failure rate. But there is good money in that 10%.

 

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[theBiz]

Many people give their opinions to cold calling based on how THEY react to cold callers

So true, they do it with everything... this is the biggest limiting quality a human being can possess... when i share ideas people might say

"well i would never buy that" and i say well i dont really care what you would buy or not i care what the market as a whole thinks..... or Well ive sold many of them already and then they make every excuse on whatever that i got lucky selling those.

I must say though....one sale every 30 minutes cold calling will never happen, ever. Even with really warm leads that wont happen. Its hard to get a sale cheap or expensive many times makes no difference.. its building the trust and getting them to pay you that takes time. From my experience for a cold caller to get 2-3 sales per week is high, someone that does follow ups on warm leads 1-2 per day is alot.

That works out to 8 sales per day, on average (some days you'll have 0, others you'll have 16, that's averages for you...)

This is the most optimistic thing ive ever read i think. Has anyone in the history of cold calling made 16 sales in one day? That guy must be worth over 50 mil if he exists.

Now repeat that every day for a week. You are up to $9,600 per year, per week. After a month you are up to $38,400 revenue per year. After year 1 you'll have created a $460,800 business off the phone, working half-days.

Now hire 5 people to hit the phones. $2,304,000 is the result. Get enough people using your service and word of mouth is going to start bringing referrals in as well. People will start talking - free marketing. Think someone might want to buy you out with a $2m business, 5 people and recurring revenue stream? Very likely.

Cool breakdown for sure... imagine just doing this on autopilot with an affiliate program in place and PPC..... god i need to become rich through automation instead of work. Every day that goes on i realize more and more making good money is not hard but you have to work your a$$ off then it will just come with time.. years...but making good/BIG money on autopilot is freakin HARD.. i need to make money completely eliminating time so i can LIVE.

 

[Warchild]

About 6 years ago i employed a company to do the cold calling for me and paid them on a results basis. The nature of my business is on a recurring basis, so I should get money each year.

Over the 6 years it generated around £200000 of new income, so compounded probably about £500,000 of cashflow.

It does work, but it has to be in an industry where there is recurring fees. This is things such as computer support, or any service contract. Plus you need to get somebody else to do it preferably on a commission basis.

 

[77startup]

Many people give their opinions to cold calling based on how THEY react to cold callers, then extrapolate that into a business-wide fact.

I agree all the way. I've just starting making cold calls & it's working. REALLY working.

 

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[LamboMP]

Cold calling is one of the best way to generate leads and sales with little cost.

Yes it works.