The other week a sales manager and I had a great debate via email about whether cold calling is the most effective way to generate leads. I say no. He disagrees. I thought you would enjoy the email exchange and I would encourage you to get involved. What do you think? Are cold calls the MOST effective way to generate sale. Post your comments or vote in our poll
ROUND 1
Hi Colleen,
Read your piece on Rain Today.
Just wondering who the “we” is in “we all agree”.
Because we don’t agree with your premise – and there are a lot of folks in the DM biz who find cold calling to be very effective.
M
Hi M
Please keep in mind that I said its not the “most effective”. Sales studies that I have read by Harvard, Stanford, The Sales board, Profit magazine, What’s working in Sales management combined with my own research over 15 years shows that sales people find that referred calls are the most effective followed by leads generated by DM, EDM or article marketing.
Cold calling can be effective – just not the MOST effective. I suggest a combination of approaches to improve closing rate.
Thanks Colleen
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Round 2
Colleen
I do disagree. If I need sales now, which is the case in most enterprises cold calling is the most effective tactic to generate sales. Yes , direct mail, article marketing, branding, etc., can all work over time – but for pure immediate results – go knock on a door or dial a phone.
The problem with most lead generation strategies is that you have to wait for them to work. The problem with referrals is that you have to first generate the customer then generate the experience the results in the referral. For pure effectiveness very few things beat cold calling.
Cold calling has been demonized by many in the sales and marketing ranks because you actually have to sell. You deal with an enormous amount of rejection, it’s hyper competitive and many in sales and marketing today do not have the stomach or the instincts for cold calling. But many do – you just don’t hear a lot from them because they’re busy selling.
Which is why I asked who “we” is?
Have you ever sold. Made cold calls?
Colleen, I’m not trying to be an oaf – but I do get aggravated by the “group think” (“we all agree”).
m
Hi Mike,
I love these discussions as they make for great information for all sales reps. In fact…I wish we were having this conversation on my blog to encourage others to get involved!
In this case “we” is based on research – not fluff.
I have been selling actively for 15 years – including the life insurance market so my cold calling experience is extensive. To be fair. I don’t hate cold calling. I just don’t think it’s the most effective way to close sales.
There are many ways to increase your success in cold calling, and I am sure in your position you have many ideas and techniques that work. Still, I believe that the best way to generate sales is through referred leads not cold leads. Of course, every industry varies but following up on a lead that was referred to you by another person, a website or a download will close on average 4:1 where as industry averages for cold calling range 75:1 to 100:1. I believe that the more targeted your calls the better. I have one client who closes 100’s of sales per day over the phone. Their closing ratio on referred leads is 2.5:1 and cold leads is almost 100:1. They stopped cold calling and now ask for referrals from every sales they make.
You can bet that I measure everything before making bold statements!
Check out my website for more information on my background. I can promise you that I don’t teach theory.
www.engageselling.com
Thanks for your comments. I am glad to see that you take such a keen interest and have a strong opinion!
Colleen,
This was such a valuable post. I love how you handled “M” you were 100% professional plus you stuck to your guns when it comes to what you know to be true.
Unfortunately, as you well know, sometimes the person you’re communicating with just isn’t ready to receive your message no matter how great a job you do of confirming you have heard what they said.
I couldn’t agree with you more when it comes to cold calling. Yes, cold calling can work. Yet, when you compare your ROI from those frigid openings to connections started through effective marketing rarely is cold calling your highest return effort. If it is I suspect you have lots of opportunities to improve your marketing effectiveness.
This was just so awesome I have to send my readers over to read it for themselves. Thanks again.
[…] the phone bothering complete strangers who have no interest what-so-ever in speaking with you? Colleen Francis shares an email conversation with just such a person. Someone who thinks cold calling is just the […]
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