Cold Calling - Fish or Fowl?

In my last post, I talked about how marketing should be used to create leads, NOT sales reps. But what about cold calling you ask? Cold calling is a sales rep role and responsibility yet it creates leads, right? Wrong. Cold calling is actually a form of Marketing NOT sales, since it creates leads not customers.

Unfortunately, cold calling is the most expensive and least efficient method of creating leads that exists. That is because cold calling uses an extremely expensive asset – a human being – to do something that is 95-99% of the time of absolutely zero added value.

Dialing the phone, waiting for it to ring into voice-mail, leaving voice-mails with strangers that will never respond, getting stonewalled by gate-keepers, and repeating the entire process ad infinitum fails to utilize any of the capabilities that define us as humans – our intelligence, our creativity, our ability to develop understanding and relationships. All capabilities that are crucial to sales, but virtually wasted by cold calling.

(Like any good rule, there are exceptions. For example, writing unsolicited proposals is definitely a sales task, yet it’s designed to turn a suspect or prospect into a lead. This is one exception, but I can’t think of many others.)

So why do so many companies rely on cold calling as their primary form of lead generation? Because it’s easy, visible and familiar. “There’s Joe. Look at him pound those phones! My, Joe’s doing a great job.” Of course, you’re paying Joe $3,000 or $4,000 per month (or more!), and he hasn’t really brought in much business yet, but he’s such a nice guy and he’s working so hard, you’re sure he will…

Whereas the $500/month you’re spending on search engine optimization – what’s happening with that?!? Of course, traffic to your Website does seem to be rising as each month passes, the number of leads coming off the Web is definitely increasing, your online sales are on the upswing, and the phone does seem to be ringing more than before – but just WHAT is that SEO firm doing for you anyway?! And of course the same could be said about your PR efforts, direct mail campaign etc.

The bottom line is that as human beings we like what we can see, touch and smell. A bank of cold callers with headsets gets an A+ on that score. Unfortunately, it also gets an F in terms of long term effectiveness and efficiency. A major indicator of the sophistication of any company’s understanding of and approach to marketing is the ratio of its investment in cold calling versus all other forms of demand generation marketing. What’s your firm’s ratio and what score would you give yourself on this question?