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As a sales technique, cold calling is as old as the telephone itself. But over the last two decades, as landlines have become practically extinct and call screening ubiquitous, the art of the blind pitch is becoming lost. Using a spray-and-pray approach after punching a keypad is not as common as it once was, so Revenue Brew wanted to know whether sales pros still have some love for one of the oldest plays in the marketing book.
Making every dollar count
Paul Towers, who manages Australia and New Zealand sales for software company Liferay, thinks if cold calling is not already dead it is “rapidly dying.” While Towers cited its waning effectiveness, ultimately he said, the cause of death comes down to a poor return on investment.
“Essentially, you’re paying a BDR [business development representative] in Australia, probably at least $70,000 a year without commission on top to have to call for an entire week before you maybe get one person who’s interested in meeting,” Towers said.
Alternative methods of outreach, like workplace social media and in-person gatherings, could also be killing cold calling. Towers said, instead of adding a BDR to the payroll, he has found it more worthwhile to pay a higher up-front cost to attend (or organize) an executive lunch. There, he said, he can directly target key decision-makers.
“If you do the ROI and go, ‘well, hang on, how many months will my BDR have to call to get me in front of not only 15 to 20 people in total, but 15 to 20 senior people who actually have purchasing authority in the right title?’ You could spend a whole year doing that,” Towers said.
Outreach overload
Terry Lee, chief revenue officer at loan documentation software company Informed.IQ, and his team are struggling to use cold calling to effectively reach their target audience.
“It’s very difficult to find a phone number for a human,” he said. “It’s less difficult to find a phone number for a company. But when you call, you’re either getting voicemail, getting [a] phone number not working, or alternatively, you may get lucky and actually get them to pick up a cell phone, but that often is viewed negatively [by recipients].”
Lee points to the post-Covid period as a possible time of death for cold calling, saying it is now harder to reach decision-makers in an office, since many work from home or don’t have landlines.
“If I go back to pre-Covid, certain organizations were very likely to have my target person sitting at a desk in a building. Once Covid happened, that is very, very unlikely,” Lee said.
This only leaves calling via cell phone, something Lee said can be a slippery slope.
“Does interrupting someone on their cell phone work? Or does it create a negative feeling? I personally think it’s the negative feeling.”
Reviving the cold call
Joey Gilkey, CEO of sales intelligence platform TitanX, said cold calling is alive and well, especially when used for a wider variety of objectives. Instead of using cold calling as a “one-swing, knockout punch,” Gilkey said it should be used to gather intelligence.
“If you start looking at the phone as a conversational advertising platform, then you start to uncover new data that doesn’t exist online,” said Gilkey. “You start to uncover: What is their buying behavior? What incumbent solution are they using? When are they going to buy? That data then influences our follow-up.”
Gilkey said that the more cold calls he and his team make, the more data they can unearth. And based on information about what potential customers are or are not interested in, he can place them into different buckets with notes for follow-ups.
“I might be getting very few ‘not me’s’ and referrals, which means my targeting is good, but our meeting rate and our activation rates are really low, our ‘not interested’ rates are really high, which means that’s a messaging issue,” Gilkey said.
A firm believer in quantity, Gilkey said the advantage of more calls is a faster feedback loop, which can create better messaging.
“Oh, that message did not land,” he said. “Oh, let's try this message. Cool. The next 10 conversations. Let’s see how those go.”