Dare you to say that five times fast!
Most people have heard the phrase “cold calling” before. But have you ever wondered how it got the name?
B2B cold calling is a type of telemarketing that’s used in many industries. From recruitment to real estate, salespeople use cold calling to reach potential customers and introduce their services in hopes that this new lead may be interested in learning more.
With more than a century’s worth of history, it’s evident that there’s a story to be told around cold calling. Keep reading to learn more about this outreach opportunity, how it’s both changed and remained viable through the ages, and what you can do to start making successful cold calls yourself.
Where Did Cold Calling Get Its Name?
Cold calling is a sales prospecting technique used by salespeople and telemarketers to drum up new business. When “cold calling,” B2B sales representatives dial potential clients/customers who have not previously expressed interest in the product or service being offered. The sales rep will explain the product with the goal of turning the prospect into a qualified lead or a successful buyer. Because the entire interaction is unsolicited, it is known as a “cold call.”
The History of the Cold Call (Origin of the Term)
The practice of cold calling is recorded with records dating back to the 1870s by John Patterson, founder of the National Cash Register (NCR) Company. Although he typically handled his cold prospecting face to face rather than over the phone, the sales training manuals that Patterson wrote are still incredibly accurate for how salespeople approach cold calling, even today.
As more and more households began installing telephones, the “cold call” became a phone call, rather than a house or office visit. Homes that had telephones often fit a fairly narrow demographic. Housewives stayed home with the children while husbands worked, so if salesmen called during the day, you’d get to speak to the woman of the house. She’d typically have to check with her husband before committing to a sale. After 6 pm, the man of the house—the decision-maker—would be available for closing the deal.
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And while the term “cold calling” became widely used jargon throughout the mid-to-late 1900s, it has changed and evolved over these more recent years.
In modern times, pinning down your demographic for a talk on the phone is harder than ever. Both men and women work full time, and it’s rare that anyone has a spare minute to talk to a stranger on the phone. As if cold calling hadn’t already been hard enough, now sales reps have to strategically decide when to call prospects, and be ready to relate to whoever may pick up the phone.
Psst... Seeking the perfect sales headset for your cold calls? Our review of the top 8 models is a must-read.
Cold vs Warm Leads
In sales and marketing, leads can be referred to as cold leads, warm leads, and hot leads.
A “cold lead” is a potential customer that has not expressed specific interest in the product or service being sold. In some instances, they may not even be aware of the product, service, or possibly even the brand that’s selling it.
A “warm lead” is someone who has been verified as an ideal target for the specific product/service being sold, or who has expressed a moderate level of interest in the product or service being sold.
A “hot lead” is a potential customer who has been thoroughly educated on the product or service, who has expressed a significant level of interest in it, or who’s gathering final information prior to making a decision to buy.
Through a system of educating and nurturing, cold leads can move from cold, to warm, to hot leads, and can finally be successfully sold.
How Cold Calling Works
It’s easy to agree that sales are the lifeblood of any business. No matter how shiny the product, no matter how impeccable the service, no matter how many pain points you solve; without sales, your business will die.
Outreach through cold calling is just one way salespeople drive revenue into the business. But how to begin?
Acquire a List of Leads
Step 1 is to get the leads in front of you—but not just any leads. You need a list of phone numbers that will reach the people your product/service can help. Ideally, you want to contact people who experience a pain point that your product will solve.
Finding the right leads takes time, skill, money, or a combination of the three.
There are essentially four ways to generate more leads, each with its respective advantages and disadvantages:
- buy a list
- scrape contact data from various sources
- commission an outsourced lead generation team
- create an ideal customer profile
If you're short on time, you could buy a pre-qualified list of individuals’ names and phone numbers that has already been verified and confirmed. These lists tend to be hit or miss, and there’s a good chance that whoever sold you the list has sold it to others as well, so the names on that list may be tired of receiving so many cold calls.
A better strategy would be to follow tried-and-true lead generation ideas and build your own list of leads. Do this by searching LinkedIn, other social media platforms, or even targeted companies’ websites to find decision makers. Jot down employees’ names and their titles, and start digging around for their phone numbers and email addresses. As your research skills develop, you’ll start creating personally-confirmed, high-quality contact lists in a matter of hours.
Pick Up the Phone
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Once you have a list of numbers, you need to start making calls. Everything about that first call, from dialing the phone number to asking for a follow-up call, may feel nerve-wracking. But it’s also an opportunity to solve that person’s business problem and make a sale.
Most sales reps who work in cold calling use a sales script to help ease nerves and make the conversation flow more smoothly. Good cold calling scripts introduce a cold lead to the product or service with a conversational sales pitch that leaves space for natural conversation. They allow potential customers to ask questions and gain interest, and they also include rebuttals for common objections that may come up.
And if your lead doesn’t answer the phone? Simple: Leave a cold voicemail.
While this may seem like the epitome of impersonal, cold voicemails work! However, it can also become a mind-numbingly dull task to leave dozens of voicemail messages every day. Surveys showed that many sales reps spend about 15% of their time leaving voicemails. Sales automation tools (like Close) enable you to leave a pre-recorded voicemail with just the click of a button, while you're already on to making the next call.
Never Stop Selling
Based on those cold voicemail statistics we just shared, it’s clear that more sales are made when more contact is made. In short, never give up.
Unless your contact clearly specifies that they’re not interested and their business has no use for your product, keep reaching out. You may need to dial back the frequency (calling only once every quarter instead of once every week or two), but don’t stop. If your contact person says they don’t have the budget for your software, make a note in your CRM to call them in 6 to 8 months when the next year’s budget is being planned.
This is where having a great CRM in place really makes a difference in your sales funnel. It’s common for decision-makers to need time before they’re ready to buy, and sales reps can easily lose track of their leads when this happens. Without scheduled timelines and automatic notifications built right into lead profiles, you may be losing track—and losing sales—left and right.
Cold Calling vs Warm Calling
If cold calling refers to reaching out to potential customers who are unaware of a product or service, then naturally, warm calling would mean contacting individuals who are aware of the product, or who have already expressed some amount of interest.
Prospective customers who opt-in to an email list, ask for more information, or leave a phone number are considered warm leads.
With proper nurturing, cold leads can become warm leads.
- Scenario 1: You cold-call a potential customer and leave a voicemail. After listening to the voicemail, that lead is still a cold lead because he is only minimally aware of your product and has not asked for information.
- You call the lead again and reach him on the phone. He only listens for a moment, but asks you to call back next week because he’s busy right now. He is now a warm lead, as he’s aware of your product and has asked to learn more next week.
- Scenario 2: You find a prospective client on LinkedIn who says they're available for sales calls and have posted their phone number. You call them and introduce your product or service. This is a cold call.
- However, if you write an article on LinkedIn about your product or service, and a prospective client leaves a comment asking for you to call them, then they're a warm lead. Your call to them will be a warm call.
Challenges of Cold Calling
There are some challenges that affect the already difficult job of cold calling: namely, the Do Not Call Registry, and the inevitable information loss that occurs when workers take on new roles or when companies shift their comms systems.
Governed by the Federal Trade Commission, the National Do Not Call Registry came about in 1993 in response to consumers’ exhaustion with the unethical and continuous calling practices of telemarketers. Since then, the list has grown to more than 244 million active registrants who have requested their phone numbers be removed from any marketing lists. To make sure your cold calls only reach willing ears, Sellers (including sales representatives) are recommended to sign up with the National Do Not Call Registry and compare your leads against the registry.
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Once your list has been approved, you’ll likely deal with the simple and unavoidable problem of change. Every year, around 30% of employees’ contact information becomes outdated. This includes changing jobs or job functions (i.e., there’s a new decision-maker you should be contacting), changing email addresses, and changing phone numbers. In these situations, the only thing you can do is conduct more research to keep your contact list clean and tidy. (Having a high-quality B2B data provider will help alleviate this issue to some degree.)
With all of this being said, though, cold calling continues to prove itself as an effective sales technique in almost all of the industries that use it (learn more about the effectiveness of cold calling.). While overall success rates look low, with only about 1-2% of cold calls resulting in a sale—the revenues earned from those sales pay handsomely for both the business and the rep that sold the deal.
Cold Calling Tips: Make the Most of Your Cold Calling Efforts
Though cold calling may be a challenge, it’s not insurmountable. Through generations’ worth of practice, this sales strategy has developed a common set of cold calling techniques that help sales professionals excel in chasing the sale. Here’s how they do it, in a nutshell:
- Having the right lead generation strategy
- Using an effective cold calling script
- Following best practices for voicemails and follow-up
Through each of those steps, a good CRM software like Close should be by your side. Close can preserve all of the important details gained through prior contact with each individual lead, including their hobbies, their pain points, and above all else, when you should reach back out again.
Close can also automatically schedule emails and SMS messages for you, keeping your contacts engaged even when you’re not speaking to them directly. Try Close free for 14 days to see how it can help you make more sales.
