What is Cold Calling? The Ultimate Small Business Guide for 2022 & Beyond
This article is part of a larger series on Sales Management.
Exploring what is cold calling involves placing outgoing calls to prospects you’ve had no previous contact with. The main objective of cold calling is to introduce your product or service offerings and create awareness of your business to start the prospect’s customer journey. Cold calls are also made to learn more about a prospect’s needs, identify decision-makers, set appointments or schedule demos, and follow up on inquiries like referrals or web form submissions.
Goals of Cold Calling
Cold calling is a sales technique that serves multiple areas of your business’s sales and marketing plans, like lead generation, prospect researching, and qualifying leads. It should also be noted that while cold calling is often done internally, there are also telemarketing firms that place cold calls as a service to create awareness, identify qualified leads, and set appointments for your sales representatives.
Regardless of how cold calling is conducted, it is generally used for one of these purposes.
The first and primary purpose is to create awareness of the solutions your business offers to generate leads. By introducing your business and its products or services to a multitude of contacts, you have an opportunity to gauge interest and begin the customer journey of prospects through the stages of the sales funnel.
Cold calling is one of the most common lead generation tactics for sales. Our ultimate guide to lead generation details other useful methods for both outbound and inbound lead generation.
After generating leads from sources like lead list databases or online webforms, cold calling can be used to determine whether or not a prospect would be likely to make a purchase from your business. Your team can place them to uncover their needs by asking questions about their current vendors, satisfaction with those vendors, budget, and willingness to change suppliers or see what else is available in the market.
In business-to-business (B2B) industries, cold calling is commonly used to research prospects and gain intel about potential customers. For example, if you want specific information about a lead, such as the current contact information for a specific job title or the unique pain points a prospect would like to solve, outbound phone calls can be made to learn more.
Following Up On Inquiries
Cold calling is also used to follow-up on various types of inquiries such as downloading something from your website, submitting an online interest form, subscribing to your email marketing campaigns, or following up with referrals. Although technically these types of leads are already aware of or even potentially interested in your company, it is still considered cold calling if you are contacting them without prior direct contact.
Pro tip: Referrals are one of the easiest ways to generate new business and typically lead to the highest deal-closing probabilities. Our guide on how to get more referrals can provide you with the finest methods of generating referral-based business opportunities.
Tips to Make Cold Calling More Effective
Whether making cold calls is the best way to create sales opportunities for your small business specifically, it is still one of the most heavily relied-upon sales techniques in general. For instance, B2B technology sales reps make an average of 35 calls per day, and 41% say their phone is their most effective selling tool.
Most sales professionals will tell you it is highly effective―if it’s done right. It’s essential to target the right prospects, call at the right times, and follow effective conversational techniques when talking with a prospect. Cold calling success also requires making a high volume of calls and following up consistently with additional attempts to create leads at the top of the sales funnel.
Below are some tactics for making your cold calling strategy more effective:
- Call during high connection time ranges: Call answer rates typically peak between 10 a.m. to 11:30 a.m. and 4 p.m. to 5 p.m.
- Make calls on high connection days: Tuesday, Wednesday, and Thursday are the best days to make calls. For example, Wednesdays have a 53.67% higher successful call rate than Fridays.
- Follow up with multiple attempts: While most sales reps give up after three attempts, prospects will continue answering at consistent rates up to the sixth call attempt.
- Call immediately after an inquiry is submitted: Sales reps are 11 times more likely to connect with a lead if their initial call attempt is made within an hour of when the inquiry is generated compared to calls made 8 hours afterward.
- Target the right prospects: Data shows that 50% of prospects called aren’t a good fit for what is being sold—that’s a lot of wasted time and resources.
- Research contact thoroughly: 18% of sales reps say that gaining access to the right person or stakeholder is one of the biggest challenges to filling their sales pipeline. Doing research before calling to make sure you’re contacting a decision-maker saves time.
- Start with emotional selling: Using logical language, such as stating the average return on investment (ROI), may be less effective than an emotional sales pitch like how a product provides the prospect with a sense of financial security. Specifically, ROI language correlates with a 27% decrease in closing rates.
- Respond to objections with questions: Top sales performers ask questions to respond to objections 54.3% of the time, while average performers only respond with questions 31% of the time.
- Maintain conversational control: While listening to a customer is obviously important, data shows that controlling the conversation by talking for a majority of the time is best for cold calling, with an optimal talk-to-listen ratio of around 55:45.
Sales statistics often paint a more realistic picture of what to expect and the best practices. Before picking up the phone, take a look at the 18 cold calling statistics you need to know to put yourself in the best position to succeed.
How to Start Cold Calling Prospects
A good amount of preparation should be done before you and your team start calling. First, find out exactly which leads your business should target based on buyer personas or ideal client types, and obtain or gather that contact information. Then organize your contact information, set goals, and write scripts outlining what you and your sales reps will say during calls.
1. Research Your Prospects
Researching prospects involves defining your ideal target market. Consider what type of individuals or businesses you want to sell to, what characterizes the leads most likely to need the products or services you sell, and what type of signals indicate that a prospect is interested or ready to buy. When targeting business buyers, identify which job positions are most likely to be decision-makers.
It’s critical that you have the most accurate and up-to-date contact information available to avoid wasting call time on bad phone numbers. Cold calling can be used to scope out prospects before making a pitch. For example, you may need to first call a firm to find out the best person to talk to and acquire their phone number.
You can also use prospecting tools like Uplead for research. Uplead is a contact database that contains real-time contact information of decision-makers in the B2B space. Users can simply find and filter lead contacts based on job title, industry, company, and geographic location to build their prospect list:
2. Prepare a Contact List
Once you determine which leads to call and have accurate contact information, arrange your call list in the order you want to make the calls, such as by industry, business size, lead score, or some other factor. This list should include the contact name, job title for B2B leads, phone number, and any additional notes you think may help on the call, such as their current vendor or previous interactions with your company.
3. Set Goals
Set objectives based on your research, contact list, and sales goals. Cold calling goals should quantify how many calls to place, the ratio of desired conversions compared to the number of calls placed, and what kinds of outcomes or conversions you want to achieve. Outcomes could include not only sales made but also appointments scheduled for a sales pitch or demo, or contacts moved along the sales pipeline.
4. Create Cold Calling Scripts
Using the objectives you set and your target prospect research, create calling scripts to use as reference points. Keep in mind that reading directly from a script may not sound natural. Instead, use scripts as a reference to guide you and your team through various scenarios.
Your initial script should introduce you and your business and include an acknowledgment that you value their time, such as asking, “Do you have a few minutes to talk?” If they say no, ask for a better time to call back. In your sales pitch, briefly describe how your business can help the prospect and include a call to action (CTA). In other words, what do you want the prospect to do next?
In addition, scripts vary based on different types of scenarios. Below are different types of scripts and what they should be used for:
- Cold call appointment script: To get an appointment scheduled with the prospect
- Gatekeeper script: To get decision-maker information like who to contact and how to reach them
- Referral script: For citing the mutual connection who referred the prospect to your business
- Qualifying script: To determine whether a prospect is qualified or a good potential fit for your business
- No answer voicemail script: For when a prospect is unavailable or your call is sent to voicemail
Be sure to take advantage of our free cold call script templates found in our guide for writing cold calling scripts.
5. Start Calling
Now that you are prepared to start your cold calling campaign it’s time to start making calls. While conversing with a prospect by phone, there are a few things to keep in mind regarding preparedness and what to say in a cold introduction.
First, try to relax and create the right calling environment. This can be done by using a cordless phone or headset so that you can stand or even walk around while placing calls. Talking while standing makes you sound more confident and natural. It’s also a good idea to memorize and rehearse the key points of your scripts so you don’t sound robotic on the phone.
Next, it’s time to put your script to work. Introduce yourself, state the reason for your call, make a brief pitch as to what your business can do for them, and include a CTA to move the prospect to the next step. The cold call example introduction below shows each of these elements.
Sales rep: Hi Mark, this is Katy from ABC Software Company. I’m calling because I saw your firm is one of the fastest-growing consulting businesses in the D.C. area. I believe our project management software can provide you with a scalable and cost-effective solution to meet your growing client project needs. Is this something we can discuss further? While on the phone, be prepared to handle questions, complaints, and objections. Since most people generally aren’t anticipating receiving your sales call, they may be caught off guard or even feel inconvenienced.
Mark: Hi Katy, this isn’t the best time to chat, plus I get a lot of cold calls like this every day, which makes me skeptical about the actual price benefits.
Sales rep: I completely understand your concern. Is a three-month free trial something that would help to alleviate some of your skepticism?
Mark: It could potentially.
Sales rep: Excellent, so we do offer a three-month free trial so you can see if it’s right for you. Our demo and per-user pricing model are some of the main reasons our software is highly praised for how well it adapts to growing businesses like yours. If you have time early next week, I’d love to walk you through its features with a demo.
Assuming the call is successful, make sure you and the prospect agree about the next step to take. Examples of the next steps include sending follow-up emails with the information needed to take advantage of a free trial or sending calendar invites for a presentation or product demo.
Document the details of cold calls for later use. Even if the call is not successful, take notes about adjustments that could make your efforts more effective. Also, remember cold calling is meant to start and develop relationships, so don’t expect to close the sale during the initial call. Instead, focus on getting the lead to the next stage in the sales process.
Cold Calling Challenges to Overcome
Despite the benefits, there are factors that make it less effective or viable for some small businesses. Even companies that need to rely heavily on cold calling for lead generation may experience some drawbacks, including the following.
Cold Calling Requires Training
The initial obstacle to using cold calling as a sales technique is the ongoing investment required to train both new and existing reps. You can’t usually put a brand new employee into a cold-calling role and expect them to be successful. Existing reps also need constant feedback and adjustments based on their calling performance.
Designing an effective program for onboarding new reps and providing ongoing training is the first step to building and managing a successful sales operation. Our tips for training a high-performing sales team show you how to get the most success through providing tools, resources, and knowledge to your reps.
Some Employees Dislike Cold Calling
Another downside to cold calling is that some employees don’t like making them, which limits this tactic’s selling potential. One study showed that 48% of sales reps are afraid to make phone calls, which may be one reason that 53% give up too soon when doing cold calling.
Hiring people with prior cold-calling experience or who express a desire to cold call and using training to prepare reps for campaigns can overcome their concerns and give them more confidence. Another way is to create enthusiasm by turning performance measurements into a game using sales gamification software. Our list of the top sales gamification tools can help you choose the right solution for your team.
Keeping your team motivated and focused is one of the biggest challenges of managing a sales team. With our ultimate guide to sales management, you can get the information you need to train, develop, and motivate your team to get the highest sales results possible.
Cold Calling Is Time Consuming
Utilizing cold calling for lead generation can be time-consuming, even for getting even the slightest bit of traction. One study showed that sales reps across all industries average 45 dials per day but only produce five quality conversations from these efforts. That same study also showed that it took an average of nine attempts to reach a prospect.
To make your efforts more efficient, dedicate time for team members to place a set number of calls during peak hours and on peak days. During those hours, remove or minimize distractions such as meetings, personal conversations, nonurgent emails, and other interruptions that can get in the way of call dials.
Another factor limiting efficiency is when incoming calls come from an unknown number. Up to 94% of calls from unknown numbers now go unanswered. This leads to valuable time lost trying to reach prospects. Virtual phone number companies like Nextiva, Grasshopper, and Google Voice mitigate this issue by providing local phone numbers so that calls don’t appear to be from an unknown source or faraway location.
How CRMs Help With Cold Calling
Customer relationship management (CRM) software enhances your cold calling strategy through tools that organize contacts, add interaction notes, and track outcomes of cold calls. This makes it easier to collaborate with team members on lead progress and document sales information. Pipedrive, for example, organizes contact information into lists which users can call through integrations with phone systems like Kixie or Ring.io:
Some CRMs include power dialing tools as a feature or through integrations that dial a list of phone numbers automatically. This enables your sales team to place significantly more calls in a set period of time since you don’t have to spend time looking up and dialing phone numbers. For example, Freshsales CRM integrates with Freshdesk, a native software with power dialing capabilities:
Integrating software with your CRM centralizes and automates sales processes, increasing your team’s productivity by completing tasks in one platform. More information about how CRM integrations work and some of the most popular integrations for sales activities can be found in our ultimate guide to CRM integrations.
Cold calling is a tactic used to introduce your business to potential customers over the phone. Its effectiveness varies depending on when calls are made, who they are placed to, and how many are completed as well as the quality of your scripts and the knowledge and abilities of your sales reps. Its main objective is to develop relationships by scheduling appointments, qualifying leads, or making prospects aware of your business and what it offers.