Cold calling is a way to reach new customers that has many benefits as well as challenges.
- Cold calling is the act of contacting potential customers you haven't connected with before.
- Strengthening your marketing and improving your sales pitch are some benefits of cold calling.
- There are also several downsides to cold calling, such as it being easy to ignore and potentially impacting a company's reputation negatively.
- This article is for business owners and salespeople who want to learn how cold calling works.
Among many methods to engage potential customers, cold calling is a popular and viable option. However, cold calling isn't necessarily what many think of it as. The practice has evolved in the last few decades and isn't as impersonal as it once was. Generally, instead of placing random calls, salespeople have found more success by targeting the right individuals and companies.
Much has been written about whether cold calling is effective. While the answer will likely depend on your business and the services or products you sell, many businesses believe that cold calling certainly has a place within the sales funnel.
What is cold calling?
Cold calling is when sales representatives reach out to someone they haven't connected with before. The goal is to get them interested in a business's products or services. As the name implies, cold calling typically takes place over the phone.
In the past, cold calling meant working down a list of names of people or businesses that may or may not have needs for your products or services. But this isn't as efficient as taking time to identify your audience. While it can be time-consuming, it can lead to better results.
Cold calling differs from warm calling, which is when a salesperson has met or has a connection with a prospect before reaching out. [Read related article: Best CRM Software for 2021]
Key takeaway: Unlike warm calling, cold calling is when you reach out to a prospect without having a prior connection.
Benefits of cold calling
While cold calling isn't everyone's preference, there are benefits of adding this tactic to your marketing strategy.
- It helps you fine-tune your pitch. You will likely reach out to many prospects, and you'll learn what parts of your pitch work and what parts should be reworked.
- It can be a form of market research. While selling your product or service is the ultimate goal, you can also use cold calls to gather information from prospects. You can ask them survey questions that will provide more insight into this audience.
- It's an opportunity to reach new audiences. Because not everyone will find your company on their own, cold calling gives you the chance to introduce new audiences to your services or products.
- It's an easy strategy to implement. Cold calling doesn't require too many tools or a complicated structure to start.
- It strengthens your strategy. The best marketing strategies are multipronged. Adding cold calling to your strategy means you are increasing the ways you interact with your audience.
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Challenges of making cold calls
Cold calling can get results, but you might encounter many challenges along the way.
- It can sour a potential customer on your company. A too-persistent or rude salesperson can turn a potential customer off the company and hurt your company's reputation.
- Calls are easy to ignore. Many avoid picking up phone calls, and with caller ID technology, cold calls are very easy to avoid.
- It has low success rates. According to marketing analysts, cold calling has a 1% to 3% success rate. This means that it might take a lot of calls and time to get decent results.
- It's widely disliked. Many dislike cold calls, so even if you can get someone to answer the call, they are often less willing to engage.
- It could feel spammy. With the number of robocalls that many receive, cold calls can also feel like spam.
- It can be disheartening. Cold calling can be a discouraging process for salespeople because they may have many negative experiences as well.
Key takeaway: Cold calling has some disadvantages for both the salesperson and the prospect. It has low success rates (partly because customers don't like marketing calls and phone calls are so easy to ignore) and could hurt your company's reputation if it's not executed tactfully.
Importance of cold call scripts
You may think scripts make you sound less natural, but they are an important aspect of cold calling. Your script can make or break your interactions with prospects, so be thoughtful about what you want to convey.
Here are some reasons a cold call script is necessary if you're going to use this sales method:
It allows new salespeople to adapt more quickly. It's not easy to jump into cold calling. You and your sales team have to know when and how to bring up products or services and what kinds of things you shouldn't say. With a script, however, your new salespeople will have proper guidance, allowing them to jump in more easily.
It prepares you for a call. A script means you have thought about what prospects might say and how you can respond. By accounting for the various ways a conversation could go, you can be ready for whatever the prospect asks or says.
It keeps you focused. It's easy to go off on a tangent or struggle to find the words to say next, and this can make you seem unprofessional or unknowledgeable. A script helps you focus on the points you need to hit.
- It makes you more confident. Going into a cold call with a game plan can boost your confidence. You'll have the right answers and talking points for prospects.
Did you know? A script is important to the cold calling process because it can prepare you (and any new salespeople you hire) for the conversation and make you feel more confident.
How to script a cold call
Before you can write your cold call script, you need to do some research on your prospects.
1. Identify the industries you're targeting.
Your products and services won't work for companies in every industry. Skipping this step means you won't be focusing your cold calling on those who might benefit the most from what you have to offer.
To identify the industries you should target, look at your customers and see if any patterns exist. If this route doesn't work for you, think about what kinds of companies most need your services or products. Start with just a few industries so that it doesn't become overwhelming.
2. Find the right prospects.
Now, it's time to make a list of prospects. You can find the right companies on a website like LinkedIn. From there, you can search for the people within those companies who are likely to be decision-makers. For example, if your company provides tools for marketing teams, you'll want to target a person on a company's marketing team. Aim for a high-level employee within this bracket, as someone newer or in a junior role may not have the authority to make purchase decisions.
3. Gather information about your prospects.
To personalize your script, you'll need to know about the company and the prospects. For the company, you should know what it does and how you can possibly help it. For the prospect, this could include what school they attended or how long they have been with the company.
4. Write your script.
After the research phase, you can start writing your script. Your script should include these elements:
An introduction. The best way to start your call is by introducing yourself. You'll want to keep it short and simple.
A question. This is where the research on your prospects and their company comes into play. The goal of this part is to get them talking about themselves or their company. You may ask them about their new role if they just got a promotion, for example, or something specific about where they went to school. By establishing rapport with them, you are giving them a reason to engage with you. Be mindful of people's time and try not to drag this part out longer than necessary, though.
A positioning statement. This is where you go in with your pitch. Using what you know about the prospect's company and its possible pain points, craft a statement that explains how your products or services can help. Make sure this is about them too, not just your product. Take the time to learn what they need, and listen closely so that you can ask good follow-up questions.
- A follow-up. If all goes well, end the call by setting up a follow-up call, which you can use to dig into their problems and your solutions. You should also think about all the reasons they may say they don't need your product or service. This will help you shift your position as needed.
Tip: Before you write your cold call script, research the industries that could benefit from your product, the companies within those industries, and the relevant decision-makers within those companies. This will help you create a personalized message and prepare for the conversation.
Examples of cold call scripts
Your cold call script probably won't look exactly the same as any other company's, but here are a few examples that may help you create your own.
Example No. 1
Service/product: An all-in-one analytics tool that results in richer data.
Industry to target: Most businesses use analytics tools to measure data, but looking at your past customers, you decide to target midsize marketing agencies.
Prospect: A director of marketing at a midsize marketing agency.
Information about business or prospect: The director of marketing has worked at the company for five years. The marketing agency's clients include prestigious names.
Introduction: Hi, [prospect]. This is [name] from [company].
Question: I see you've been at [company] for five years. What would you say has been the most exciting project you've worked on in that time?
A positioning statement: In talking to other marketing professionals, I've learned that many are frustrated that they have to use so many different tools to properly track campaigns. Is this a problem you've had?
A follow-up: So, if I'm understanding correctly, you wish your analytics tools to [reiterate the points they listed]. Are you available for a follow-up chat to discuss how [product] can help you solve [problem they described]?
Example No. 2
Service/product: Customer service software that helps small businesses improve the customer experience.
Industry to target: Small business is a wide category, but in this case, you decide to focus on online retailers that sell clothes.
Prospect: The founder of a clothing company that sells novelty T-shirts.
Information about business or prospect: The founder started the business because they wanted to create punny T-shirts in Spanglish.
Introduction: Hi, [prospect]. This is [name] from [company].
Question: I love your T-shirts. They are really funny. How do you come up with the slogans?
A positioning statement: When it comes to your customer service experience, what are your biggest concerns?
A follow-up: It sounds like you want to build a better experience with your customers, but you can't hire a team of support reps. You may be able to do just that with customer service software. Do you have time to schedule a follow-up chat to discuss how [product] can work with your business?
Key takeaway: Cold call scripts will vary depending on your targets and what you are selling; the key is to engage the prospect and tailor the script to their needs.
What are the best times to cold call?
There are certain days and times when you should avoid making cold calls. For example, Mondays and Fridays are not the best days for a cold call. Mondays are busy as people get back into work, and by Friday, people are ready for the weekend. Instead, choose Wednesdays and Thursdays, as CallHippo suggests.
The best times are between 11 a.m. and noon, right before lunch, and between 4 p.m. and 5 p.m., when people are not likely to start new tasks.
Tip: The best time to make a cold call is between 11 a.m. and noon or between 4 and 5 p.m. on Wednesday or Thursday.
What is the rule on cold calling?
Cold calling is not illegal, but there are laws in place to protect people. You must follow these rules when cold calling:
- Call individuals at home between 8 a.m. and 9 p.m. If you call someone at work, you can call at any time.
- Identify yourself and explain why you're calling.
- Put individuals on a "do not call" list if they ask.
- Don't call those on the National Do Not Call Registry.
- Get written approval if you accept money directly from a bank account.
- Tell the truth.