Cold Calling for 2013
As we line up in the starting blocks for 2013, the subject of sales-force cold calling will surely arise—either as a companywide strategic imperative or as a tactical to-do discussed amongst sales managers. In either case, the sales force generally will not want to discuss cold calling nor allocate much of their time or energy to the enterprise.
But first, what do we mean by “cold calling?” Generally, cold calling is considered the development of a commercial business relationship with accounts with which the company has not done business in the past. Generally, it is about the process of gaining new business in a sales representative’s market or territory. Such new business can also be defined as selling wholly-new company products or services to existing accounts. Clearly, the latter is much easier to achieve than the former—you typically do not trip over a competitor in an existing account and, at least, the customer ought to know your name.
We believe that cold calling is a strategic requirement for a company. This is because cold calling by the sales force is absolutely necessary to create sustained company performance. As such, it is both defensive and offensive in its intent & implementation.
It is a defensive measure employed by a company to counter the surety of account loss on a year-to-year basis. Some of these account losses will be large and others will be small, but surely some of your 2012 accounts will find new suppliers in 2013. And, it will happen for reasons both in and out of your control. In our experience (and based upon our original research), companies can lose up to 15% of their accounts every year. You cannot afford to ignore this risk, or (worse) convince yourself it does not exist.
Cold calling is also an offensive measure employed to attack competitors to take away their accounts. And if you do not succeed in stealing the account, the cold calling activity on your competitor’s accounts will surely reduce their profit margins as they are forced to respond with price reductions or added service. Of course, recognize that the same can happen to you.
In either case, a company that is not actively cold calling in its market place is courting business stagnation and ultimately failure—one lost account or opportunity at a time.
If cold calling is so important to a company and sales representatives’ success, why do sales forces shy away from it? In our view, there are two obvious reasons—
First, it is hard work! Convincing someone you do not know to talk with you will summon every ounce of sales skill you have (or do not have). It is much easier and more fun to call upon a “buddy”, who you know will likely place a small order and represents little risk of flight or loss. But, you generally do not cold call a “buddy.”
Second, it often takes a long time to close the business (if ever)! Cold calling will get in the way of making other sales calls with sure and immediate outcomes. Further, a cold call will seldom result in an event that will promptly put dollars in the sales rep’s pocket. Conversely, they can think of about 50 other accounts where their efforts and their compensation are more directly linked. This is particularly true when a company uses a commission-based arrangement to pay its sellers.
Is it any wonder why cold calling is about as popular with the sales force as the flu? Yet it has to be done by that same sales force.
Clearly, this is not an activity to be left solely to the discretion and purview of the sales force. A successful company will provide structure, motivation and training to assure that its sales force will succeed & prosper.
During this month and next, we will focus on the how-to’s of effective cold calling. In the following article, we reprint our October 2009 E-Note article entitled: “Let’s Talk about Cold Calling”. In it we provide real experiences in helping a client train its experienced (and frustrated) sales force to successfully get to a decision maker by phone and be ready for the unexpected.