What is Cold Calling? Is It Still Effective?

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Cold calling originated in the 19th century as a door-to-door or face-to-face sales technique and is still used today, but not in the same form as it started. In the beginning, two things allowed cold calls to be a new and effective method for prospecting clients: the invention of the telephone and the emergence of the “Yellow Pages.”

 

Cold calling gained traction after it proved effective in gauging probable buyers and getting marketing messages to those most likely to utilize your product. But with all the new marketing strategies amid the introduction of digital marketing, many have started to wonder whether cold calling still works and if it is worth researching prospective clients only for the call to go to voicemail.


What Is Cold Calling In Sales?

Cold calling is when telemarketers or salespeople try to make direct sales by calling potential customers to sell their products or services. On average, a sales representative makes 52 calls, and B2B sales reps make 35 calls per day.

 

Unlike warm calling, where there’s prior interaction or interest the prospect showed, cold calling requires the salesperson to build rapport and interest from scratch. It requires persistence and skill, as you are engaging with prospects without prior exposure to your product or service.

History of Cold Calling

The first cold call was made in the 1870s by the founder of the National Cash Register Company, John Patterson (no relation to the author of The Angel Experiment James Patterson). As many households had not yet installed telephones, John was forced to make a sales pitch face-to-face or door-to-door. That soon changed after telephones were installed.

 

Cold calls have evolved countless times over the centuries. With the world becoming increasingly fast-paced and everyone heading out to work, it is rare for anyone to have time to pick up calls from unknown caller IDs. This has forced sales representatives to determine the best day and time to call to increase their success rate.

Why Is Cold Calling Important?

Cold calling is important for business because it makes direct market research possible. It drives sales through means of direct contact with potential candidates.

 

Listening and responding to users in real-time to address any questions or concerns regarding the product’s fit makes cold calling invaluable.

1. Trust Building With Future Customers

Cold calling shows interest in customer needs and pains and proposes how your solutions can help them tackle issues. It allows you to build trust with potential customers.

 

This is only effective if you have researched the brand beforehand and have come up with ways of how your product can help them.

2. Market Research

Cold calling helps you understand the target market in-depth and collect customer insights and feedback. When you engage and discuss pain points and challenges with probable clients, you can make an informed decision on how to market the product so that it reaches the right audience.

3. Immediate Feedback

When you employ marketing methods other than cold calls, feedback is not immediate or in real-time. However, when you are on call, you can gauge their reaction to the service and immediately answer their objections.

4. Personal Connection With Clients

Cold calls make it easy to build close and personal relationships with your potential end-users. You can engage in meaningful and live conversations tailored to each client.

 

Real-time interaction enables telemarketers to change their script based on the client’s needs and address their concerns regarding the product.

Is Cold Calling Illegal?

Cold calling is illegal on Sundays and Holidays in many US states, including Alabama, Louisiana, Mississippi, Rhode Island, and Utah. South Dakota has only placed restrictions on Sundays.

 

The legal time to cold call customers in the USA is between 8 AM to 8 PM in 9 states from Monday to Friday. Federal law allows businesses to call customers between 8 AM to 9 PM in 38 states. Strict state law is enforced in 13 states.

 

Failure to comply with the calling hour and caller ID restrictions can result in fines from $500 to $25000 per infraction.

 

In Australia, one can make cold calls only between 9 AM and 8 PM from Monday to Friday. There is only an 8-hour window of 9 AM to 5 PM on Saturdays. According to Australian Consumer Law, making cold calls on Sundays and holidays is illegal.

Cold Calling Rules in the US, UK, and Australia

Cold calling rules were established in 1995 in the United States as Telemarketing Sales Rule (TSR) that specify the legal time to call customers. The Federal Trade Commission diligently enforces the rule.

 

The Telemarketing Sales Rule applies to sellers and telemarketers making calls to consumers living in the United States as well as individuals and companies who help or aid telemarketers and sellers.

 

Step one: You must check the “National Do Not Call Registry” every 31 days before calling to ensure your target consumer is not registered.


Step two: You must check state rules to determine whether your call falls within the legal time.


Step three: You must state your firm’s name, address, or telephone number, the purpose of the call, and your name.


Step four: If end users ask cold callers to put them on the “Do not call” list, the firm has to comply.


Step five: Cold callers must get written approval from the customer before taking money from the bank account.


Step six: You must be honest and provide accurate information.

 

The UK and Australia also enforce the above rules but under different regulations. The UK has been governing cold calling since 2003 under the Privacy and Electronic Communications (EC Directive) Regulations (PECR). Like the US and UK, Australia also introduced a law in 2011 to protect the rights of Australia and control businesses in terms of telemarketing called Australian Consumer Law (ACL).

 

In the UK, you can only contact prospects between 8 AM to 8 PM from Monday to Friday. There is only a 9-hour window on weekends from 9 AM to 6 PM. Failure to comply with the rules results in either warnings or penalties, or both.

Cold Calling Tips And Tricks

Cold calling is only effective if you employ sales techniques and proven methods that have been shown to work, from researching beforehand to preparing a script.

1. Call Only Prospective Clients

Not every enterprise on LinkedIn will be your prospective client. Target specific businesses that have a high chance of acquiring your services and products.

 

If your product or service is more geared towards small and medium businesses, calling big enterprises and corporations wastes time on both ends. On a similar note, if large companies can only afford what you are selling, do not cold call small companies. 

2. Write A Script

Format your script into five segments: opening, pitch, questions, conversation and closing. The script helps you know what to say so no awkward pauses lead to unsuccessful sales. However, don’t be afraid to deviate from your script when the situation demands, as you do not want to sound like everything was pre-recorded. Sound natural and at ease. Analyze your script afterwards and adjust accordingly. Check which part of the script you consistently got rejected at and fix it until it no longer occurs in most calls. 

3. Develop A Schedule That Works For You

Research your prospects and determine when your calls will likely be picked up. Consider the state law, the opening and closing times, lunchtime, and holidays. If you call just after their closing time, they might be on their way home and may not pick up. Like with everything, the more data you analyze, the more accurately you can estimate when you should call to get a high conversion rate. Spend time researching potential candidates and creating scripts when you are not calling.

Best and Worst Time To Make Cold Calls

The best time of day to make cold calls is late afternoon, from 4 PM to 5 PM, or late in the morning, from 10 AM to 11 AM. The worst time to make a sales call is between 5 PM to 6 PM.

 

You can increase your connect rate if you call them on the right day at the right time. How do you know when consumers will likely pick up the call? According to Salesmate, the best day to cold call in order is 1. Wednesday 2.Thursday 3. Tuesday 4. Monday and 5. Friday. It is best to avoid calling them during weekends or holidays, even if 38 states legally allow you to make a sales call.

 

Based on the above statistics, consider making cold calls on Wednesdays between 4 PM to 5 PM.

Does Cold Calling Still Work Or Is It Dead?

Cold calling still works and is not dead even if the average cold call connect rate falls under the range of 2 to 2.5%. It is less than desirable as the good call connect rate is 10%.

 

As anyone who has ever worked in business knows, sales is everything. Without sales, you have no income. For sales, you need willing customers. To get customers interested in your product or service, you need to get your product to them. Cold calling is a challenging yet potentially rewarding technique to uncover new leads, build client relationships, and drive sales.

 

However, you must follow a few important steps for successful cold calls.

 

Step one: Collect a list of phone numbers of people who may require your product or service either by buying a list, outsourcing it, or scraping it from multiple sources.

 

Step two: Make calls from the list you have generated or acquired.

 

Step three: Keep calling even if you reach voicemails. The more you call, the more chances you have of reaching potential consumers.

How Many Cold Calls To Get One Client?

What makes cold calling so difficult is the fact that your client is not one call away. On average, it generally takes 6 to 8 calls to get one client, with many aiming 8 calls per hour.

 

New sales representatives focus on quantity rather than quality and call 20 to 30 per hour. If you have done your preparation and have built your lists of potential candidates, it is easy to reach 100 calls 3x/week.

Cold Calling vs Warm Calling

Calling a potential end-user who has expressed interest in your product or service is called warm calling. The warm calling conversion rate falls under 20 to 30%.

 

With cold calling, you are reaching out to complete strangers who have never crossed paths with you or your business in any way. Whereas, in warm calling, you have already initiated contact before and are merely reengaging or building upon a pre-existing connection. The prospects may have clicked on your website or were previously contacted via any messaging system.

How To Turn A Cold Call Into A Warm Call?

You can turn a cold call into a warm call by either sending emails or connection requests on LinkedIn to introduced them to your business or brand before giving them a call.

 

To get them to warm up to you, make sure you have spent enough time researching your prospects before ringing them up. Know the latest updates from social media or the company website. The method is less intrusive than its counterpart and also converts better as they have already interacted with your business in one way.

Is Cold Calling Still Effective?

More than 150 years since its introduction, cold calling is still effective because you can target potential customers that may not be reached through other marketing campaigns.

 

Though there are unfounded rumors of cold calling being dead, a Rain Group study suggests otherwise. According to their findings, 57% of C-Level and VP buyers, 51% of directors and 47% of managers prefer to be contacted by phone.

 

Buyers are more willing to hear from you when they are actively looking for solutions (62%) or when they are looking for new ideas (71%).

 

Cold calling is effective and necessary to businesses because the sales team can directly contact leads and buyers to get them interested in your product. It allows for direct engagement and instant feedback, making it an important sales tool in your arsenal. However, it is important to note that certain days and times are particularly crucial to increase the connect rate.

Calilio For Cold Calling

Though effective, cold calling is still hard, and many salespeople dread being rejected over the phone. However, there are tools that help make cold calling easier and manageable. Calilio is a cloud-based business phone system that boasts many features to help with cold calling including an auto-dialer, call whispering and CRM integration. Sign up today and contact your leads easily.

Frequently Asked Question

What is the meaning of cold calling?

Cold calling refers to the practice where salespeople contact potential customers who have not previously expressed interest in the offered products or services. It’s a direct marketing technique to initiate new customer relationships.

Is cold calling good or bad?

Cold calling can be both good and bad. It’s good because it can effectively reach potential customers, generate leads, and build sales pipelines. However, it’s often considered bad due to its intrusive nature, low success rates, and potential to annoy recipients, making it less favored in the era of permission-based marketing.

What are the 3 C’s of cold calling?

The 3 C’s of cold calling are:


1. Confidence: approaching calls with assurance
2. Clarity: being clear and concise in communication
3. Control: guiding the conversation effectively

What is an example of cold calling?

An example of cold calling is when a sales representative from a software company calls businesses that may benefit from their product but have not had any prior contact or shown interest in the software. The salesperson introduces the product, highlights its benefits, and tries to engage the potential customer in a discussion.


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