Cold Calling Is Dead - There are better ways to generate leads
By Jeremy Miller
Cold calling used to be a sales person's most effective lead generation tool, but today it is futile.
Now I am not suggesting that making an unsolicited call on a strategic account is a cold call. Sure it is unsolicited, but it's simply the first step in a larger plan to engage a prospect, build a value proposition and work to win their business. Rather, I describe cold calling as the process of making 10, 20 or even 100 unsolicited calls a day, and touching as many companies as possible. This process of lead generation is unproductive. It's like looking for a needle in a haystack.
At any given time only 3% of your market is buying. These active buyers are sales leads. The problem with cold calling is 97% of your market is not buying today. So when sales people are told to cold call for their leads they are inevitably spending the bulk of their time with non-buying companies. Sure they could work over two to three years to cultivate and nurture relationships with these companies until they are ready to buy, but is that the best use of your sales reps' time? Wouldn't you rather focus your reps on active buyers, and use their talents to build the value proposition, demonstrate your company's capabilities, negotiate and close?
More importantly, can you guarantee a sales person will work a territory for two to three years to bring their leads up to a sale? Sales forces that rely on cold calling suffer from very high employee turnover. The reps burn out, get frustrated and leave. That means the customer relationships never truly develop. This process is very costly from an HR perspective, but it also hurts the company's brand.
Cold calling assumes sales people will be successful if they can reach the right person in an organization. It doesn't consider that only a small percentage of your customers have an immediate need for your services and are buying. As a result, sales reps that do a lot of cold calling focus on getting past gatekeepers, handling objections and letting the buyer know why they should make a purchase decision right now. When sales people are driven to persuade and push people to buy, they create negative customer experiences. Nobody likes to be pushed to buy. Consider how you feel when you meet a pushy sales rep. Cold calling can create an antagonistic buying experience, and that is off putting. Do you really want your brand tarnished with that reputation?
To be competitive today, smart companies must develop dedicated "demand creation" programs. Demand creation is a process of engaging your entire market, and developing relationships with your customers long before they are ready to buy. The goal is to be the "first call" for when a customer enters the 3% buying state. This allows your customers to get to know you, understand your value proposition and engage with your firm under positive terms.
Demand creation is multi-faceted. The programs must be tuned to your product mix, your customers and their buying habits. Part of the program focuses on being in the path of search for the 3% that are buying. That is often achieved through search engine optimization and search marketing. For the non-buying audience public relations, content marketing and events are effective. When producing content the goal is to offer really great advice or expertise and work on building relationships versus selling.
An effective demand creation program will build your brand awareness and make your company the "first call" when your customers are ready to buy. These leads are ideal. These buyers are approaching your organization with a desire for information, and they are more than willing to work with your sales reps. This makes for a far more productive and predictable sales process.
An added bonus of demand creation is sales force stability. When sales reps have a steady supply of leads their time is focused on selling. This makes for a more rewarding job, and one that plays to a sales person's strengths. It also allows the organization to size its sales force based on the volume of sales leads being generated. As you build volume of leads at the top of the sales funnel you will be able to hire and retain top performing reps that are focused on closing business versus grinding through cold calls.
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Jeremy Miller is a Partner with LEAPJob, a sales and marketing firm. You can reach Jeremy at Jeremy.Miller@LEAPJob.com or 905.281.3090, Ext. 22. For more information on LEAPJob please visit http://www.LEAPJob.com.
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