The Green Sheet Online Edition
November 25, 2013 • Issue 13:11:02
A heated exchange on cold calling
Is there a place for cold calling in our always-on, always-connected world? Author Frank Rumbauskas Jr. doesn't think so. Some members of GS Online's MLS Forum agree with him; others do not. Thus their recent discussion of the pros and cons of cold calling was spirited.
Rumbauskas would rather use leveraged systems to build a following than dial for dollars or walk up and down Main Street asking strangers to listen to a sales pitch. "The problem with cold calling is that it's a one-on-one occurrence," he wrote in his business bestseller Never Cold Call Again. "In other words, you can only make one phone call at a time, or knock on one door at a time. What's more, it happens only when you're actively doing it."
Look for buyers, not prospects
He went on to explain that systems get better results than cold calls because they have built-in multipliers that keep on working even when you're involved with other activities. These systems are a customized mix of digital tools that can be leveraged to attract qualified buyers. According to Rumbauskas, successful salespeople focus less on selling and more on finding customers who already want to buy.
Do the math
Rumbauskas envisions that in a perfect selling world, we would all throw out the old playbook and write a new one, beginning with banishing the myth that selling is a numbers game. "[Sales] is not a numbers game," he wrote. "If something isn't working, doing it over and over again definitely isn't going to work."
In a recent MLS Forum discussion, NBDC_Leads suggested that the high response rates and advanced analytics of digital advertising have made cold calling obsolete. He wrote, "1 percent is generally the average success rate from cold calling, with 3 percent considered excellent and difficult to attain. This is insane. A 1 to 3 percent success rate in any other form of selling or marketing in a business would get it shut down immediately."
Think like a business owner
The best way to bond with merchants is to think like they do, Rumbauskas suggested. Begin by recognizing that they probably don't care about your product's features and benefits, even if you stayed up all night memorizing them.
"There are only three things any business owner or executive wants to accomplish: increase revenues, decrease expenses, and/or increase efficiency (profitability)," he wrote. "You're wasting your time if you're trying to use any other reasons to convince a business owner or executive to buy from you."
Design a fail-proof system
In Rumbauskas' view, there are two kinds of sales professionals: those who work hard and those who work smart. "Your quota was designed to be attained working a normal, eight-hour workday just like normal businesspeople," he wrote. "If you have to work 10- or 12-hour days just to make quota, you're not working smart."
NBDC_Leads noted, "Even if you're one of the few who can pull off a 3 percent return rate from cold calling (which is still terrible, by the way), cold calling severely limits your income by time. You only have so many hours each day to make cold calls, and that's time you're not spending in appointments with hot, qualified prospects who are ready and willing to buy right now.
"The arguments against cold calling really cannot be broken, so why is anyone still doing it? I suggest finding a marketing effort that can gain a better return and not waste as much of your time."
Business owners who work smart instead of working hard will generate continuous income regardless of whether or not they work every day. The key to their success lies in their ability to create self-marketing systems that attract qualified buyers. Rumbauskas summarized the attributes of these systems as follows.
- Are unique and creative
- Have a compelling value proposition
- Contain a targeted offer that delivers what the prospect wants
- Have a strong brand identity
- Have a powerful, memorable brand image and name
- Contain a strong call to action
Don't assume cold calling is dead
Limitless earning potential is the clarion call of merchant level salespeople (MLSs). While individual strategies, methodologies and leveraged systems may vary, many agents find cold calling a fun and profitable activity.
1Slick67 wrote, "We use many ways to board accounts like everyone else – appointment setters, auto dialers, direct mail and ads – but to say cold calling is dead is just wrong. One of the easiest ways for a new agent or [experienced] agent for that matter is to canvas an area and get to know the owners.
"There are many ways to cold call; the 80 percent you are talking about may be phone sales, but you walk into a location, and very few will turn you away unless you are a total a$$. The ones preaching about cold calling being dead are usually just trying to sell the 'new way' of doing business. We use a mix, but cold calling is not dead or a [waste] of time."
Texascommerce encouraged us not to over-think selling and lead sourcing. A qualified prospect, in his view, is one that is "identified by the fact they are open for business and/or are an existing, operating, store front, retailer or restaurant/bar."
He summarized his system as 20 - 5 - 3 - 3 - 1:
- 20 = Number of merchant doors you open in a day, within a 5- to 10-mile radius (hopefully around where you reside)
- 5 = Number of business owners you will find within the above opened 20 doors
- 3 = Number of quality, real prospects/merchants, you should be able to set an appointment with to present your product (cannot be payment processing upfront)
- 3 = Number of presentations you should be doing daily from the above effort
- 1 = Number of sales you should be writing per day, from the above 3 presentations you have made
Texascommerce added that if you want to really hit it hard, "have a telemarketer call each and every business card you picked up, from the above mentioned 20 doors you walked in and set you one to three quality appointments per day, to add to the ones you set for yourself, and now you are presenting to your prospects all day, every day."
He closed by saying that the street will always push you up, and that if you try to hide from it or take yourself out of the game, you may find yourself posing academic questions about cold calling in The Green Sheet.
Dale S. Laszig is a writer and payments industry executive specializing in business development and sales performance improvement. She manages channel sales at Castles Technology and sales effectiveness programs through IMPAX Corp. and C3ET Credit Card Consortia for Education & Training Inc. She can be reached at 973-930-0331 or firstname.lastname@example.org.
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