How To Make Successful Cold Calls
by Tom Egelhoff
If you've every spent any time talking with actors, they will tell you that the worst possible audition is something called a "cold reading." In a cold reading, the actor has no idea what kind of scene they will be asked to read for. Who the character is or what the scene is about until it is time to do the actual reading.
Most salespeople treat the cold call the same way as the actor's cold reading. And that's the problem. The actor has an excuse. There really isn't any way for the actor to know what to expect. There is no excuse, however, for the salesperson. The salesperson has methods available for finding out in advance what information is needed to make a successful cold call.
Types Of Cold Calls
Before we discuss how to make your calls successful, let's explore the different types of cold calls.
Several years ago I worked for Victor Business Machines. One of the largest makers of adding machines and calculators. This was, of course, long before a $5.00 calculator was available at every check-out counter. They had a very simple sales procedure.
Every Monday I made seventy-five, door-to-door cold calls on local businesses. I had a canned paragraph that I memorized and recited to every business owner regardless of the type of business. It went something like this:
"Hi, my name is Tom Egelhoff with Victor Business Machines. We carry a complete line of adding machines and calculators for all your number processing needs.
However, the only way to determine if our products will be of help to you is to try one on your own figure work. I will be placing 20 machines in your area in the next week.
Would Tuesday morning or Thursday afternoon be the best time to deliver a machine for you to try?"
My apologies to any Victor sales trainers that may read this. The above may not be word-for-word accurate but you get the basic message.
The national sales closing ratio was 5 machines for every twenty placed.
The Victor System Broken Down
As you can see in the above example, the success of this plan was to work the numbers and the law of averages. See enough people and almost anyone can sell anything to anybody.
You might think the Victor plan has three parts; 75 cold calls, 20 placements, and 5 sales. Actually it only has one. 20 placements. Without the 20 placements, no one makes any money.
After delivering the paragraph above I would wait to see what the business owner said. Usually there was an objection. As I learned to overcome the objections I found that I didn't have to make 75 cold calls to get twenty placements. Soon it was 65, then 50, then 35. I became more confident and knowledgeable about my own products and business in general.
As I learned to be a better closer, I sold 8, then 10, then 12 out of the twenty placements. I wasn't working harder anymore, I was working smarter.
Cold Calling In The New Millennium
In the new millennium ahead, more and more sales people are going to specialize in the types of products they sell and the kinds of companies they call on. With the internet, more and more buyers are going to have access to information about a variety of products. They are going to be more informed then ever before.
To be successful in sales at this level you must be very knowledgeable about not only your products, but the products and services of those to whom you sell.
The old style Victor Sales Model would have a hard time working in todays environment.
How To Do Cold Calling Today
A company buyer may hear from 20 or more salespeople each day. Is it any wonder that they try to "NOT" see you? They must sit and listen to the salesperson explain about their company or products without having a clue whether they can help the buyer or not. Most inexperienced sales people feel that the prospect will find the need for their product is they can just stay and talk long enough. Here's a smarter way to do it.
A Plan For Effective Cold Calling
First, create a list of prospects. Usually 40-50 is a good start. Who are the big dogs in your industry? Compute your average sale and don't consider any company who doesn't measure up. Small fry cost you time and money. If necessary assign them to order takers in your office.
I don't mean to infer that you don't take care of good customers. But, there are some companies whose numbers just don't justify a lot of your time and energy.
Do Your Homework - Research The Companies
Can the companies you are considering even use your products or services? You need to know before you waste your time and theirs calling on them. If they are valid customers then put them on your list. If not, move on.
Here are some suggestions for researching companies;
Do they have a website? Check out their site and look for any weaknesses that might make them vulnerable to their competitors. Don't stop there. Also check the web sites of their customers and competitors. Remember, they are trying to beat the competition just like you are. Find a way to help them do it and they will meet you at your office.
The Internet - You aren't done on the net...yet. - Do searches of on-line newspapers/e-zines for articles on their industry and products. If they are a public company to to investment sites and get the latest advice about company plans, new products and expansion plans.
Business Directories At The Library - Ask your local librarian for help with:
Business Organizations, Agencies, & Publications Directory
Corporate Technology Directory
Directory of Corporate Affiliations
Dunn's Directory of Service Companies
Encyclopedia of Associations
Million Dollar Directory: Leading Public and Private Companies
Standard & Poor's Register of Corporations, Directors and Executives (Vol. 1: Corporations) (Vol. 2: Directors and Executives)
Thomas Registry of American Manufacturers
U.S. Industrial Directory
Ward's Business Directory of U.S. Private & Public Corporations
Who Owns Whom: North America
Yearbook Of International Organizations, Vol. 1: Organization Descriptions and Index
Directories of Management Leaders
Biographical Directory of American Business Leaders
Reference Book of Corporate Management
Who's Who in America
Who's Who in Finance & Industry
Organization Descriptions - Dun & Bradstreet, Fortune, Hoover's, R.R. Donnelley and several others publish brief profiles on thousands of public and private corporations.
Annual Reports/10Ks/10Qs/Proxy Statements - All public companies are required by law to file 10Ks and 10Qs. Contact investor relations and request an annual report, 10K, 10Q, and any recent press releases. Ask to be put on the company mailing list.
Trade Journals - Every industry, no matter how obscure, has some type of newsletter or journal that is published on a regular basis.
General Business Weeklies and Monthlies - Forbes, Fortune, Business Week, and local business publications (Business To Business, etc.)
Marketing & Promotional Materials from the Client/Prospect - Call the sales and marketing department and ask for information on what the company sells.
Chambers of Commerce - This is usually the best place to go in small towns. The chamber can fill you in on who to see.
Also see: "How And Where To Find Small Business Information."
The Pre-Call Preparation
Ok, you've done your homework, now you need to prepare your call. Any good attorney will tell you, "Never ask a question you don't already know the answer to ."
Ask yourself these questions before each call:
- 1. Does this call have a purpose? Introduction? Information? Call back? Revised quote or new information? What are you there?
- 2. What are the specific sales objectives you want to accomplish?
- 3. Who are you meeting with? Is that person the decision maker? Do others need to be present?
- 4. Do we have any other contacts at this business? How do they fit in? Do we need to inform them of the outcome of the meeting?
- 5. Why is this company interested in doing business with us?
- 6. What do they know about us? About you?
- 7. What are some of the companies business objectives? (Answer is in annual report/press releases from net, and news articles)
- 8. What's going on in their industry? (Trade journals, industry newsletter)
- 9. What are some current major needs you can help them with?
- 10. Are they currently buying from your competitor? Are they pleased with your competitors' performance?
- 11. Are there obstacles your company needs to overcome?
- 12. How will the buyer "win" if your sales objectives are met?
Put together a group of questions that relate to your company and your prospect list.
Getting In The Door
Time and time again you will here me say that, "When emotion and logic come into conflict, emotion always wins." Trust me, your customer will not sit down and compare two or three companies and come to a logical conclusion based entirely on the facts. They will make an emotional decision and then create a logical argument to justify it. Don't believe me? I'll be happy to run down to the local grocery store and you can show me the mouse and sparrow flavored cat food.
We have all had customers give us the most pathetic excuses for why we didn't get the sale. We know it's a smokescreen but we win some and we lose some.
To get in the door to see the prospect you are going to have to present something that will make your prospect more secure, safer, healthier, or more attractive. All human behavior can be traced to a person's desire for a feeling of well-being.
Fear Of Loss vs. Risk Of Gain
For example, I call you at home at three in the morning. It's raining. I tell you there is someone standing in your front yard, in the rain, with a free radial tire for your car. All you have to do is go out and get it from him. You would probably give me some anatomical advice of where I could place certain body parts and hang up.
On the other hand, I call at three in the morning to tell you that someone is out in your driveway stealing your new radial tires, you might be more likely to get up, go outside and stop them.
Your customer is safe doing business as they are with whom ever they are doing it with. If they change and do business with you that creates risk. What if your quality is inferior? What if you don't deliver? What if there are customer complaints? I COULD LOSE MY JOB!!
Can you see why they want to stay where they are? Why should they change?
Tell Them A Story...Only If You Have To
Nothing is going to happen until an appointment is made. You must call the prospect and set a time to properly present your product and/or service in a way that will give the buyer a sense of well-being.
A common mistake with inexperienced sales people is letting the prospect trick you into making your sales pitch before you are ready. You are on the phone to make the appointment...ONLY! I have never signed a contract over the phone. It must be done in person.
Your call might go like this:
"Hello Mr. Smith. This is Tom Egelhoff with XYZ. The purpose of my call is concerning the recent press release you issued. I was very interested in your new molding process. We have recently developed some ideas which greatly reduced costs and improved production for companies similar to yours. It would only take a half hour of your time to present these ideas. Would Tuesday at 10:00 am or Thursday at 2:00 pm be best for you?"
I gave Mr. Smith a vague hint that I might be able to save him some money. He also knows I've at least done some research on his products. I read his press release. Based on information his company provided I think I can help him. But, suppose he wants my pitch over the phone.
"How Do You Think Your Products Can Help Me?"
"Well Mr. Smith, I'm glad you asked that question. That's why I want to spend just one half hour with you. Our ideas are visual. If you had never seen the Mona Lisa, could I adequately describe it over the phone? No, I couldn't. My time is very valuable Mr. Smith, that's why I have just two appointment times left and I can only spend a half hour with you. I think you'll agree that it's important that we meet. Would Tuesday at 10:00 am or Thursday at 2:00 pm be best for you?
Now that may sound a little pushy to you. But, sometimes you need to be a little forceful. What did I really tell Mr. Smith in the second part of the call? I tried to give the impression that my time just might be more valuable than his. I already have a full appointment book.(Even if I don't) I also gave the impression that I can't stay longer than half an hour.
Maybe he says he can't meet me at those two times I have given him. What time can he meet me? 2:00 on Wed. "Let me check my book. That's a haircut appointment, I can reschedule that. I'll see you on Wednesday."
Instead of specific times just use Tuesday or Thursday. It's easier for the prospect to make a minor decision as to the time of the appointment than to say yes to the appointment.
The last word on Cold Calling
Cold calling doesn't have to be miserable. I know it can be because I have done my share of it...believe me. Make a game of it.
Here are some tips that helped me.
Don't take the rejection personally. They are not rejecting you. They don't even know you. Their opinion of you or your company doesn't matter until they know enough about you to make a rational (translation: emotional) business decision.
Set a goal of getting 20 "no's." Not 20 "yeses", 20 NOOOOO!!!s. Keep a count. Do it every day. When you get to twenty, stop, take a break and pat yourself on the back for a job well done. Getting 20 no's is a major accomplishment.
If you adopt the attitude that a "NO" is no big deal, you will find it harder and harder to get the twenty no's. You will start getting the 20 yeses.
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Based in Bozeman, MT, Tom Egelhoff is the author of How To Market, Advertise & Promote Your Business Or Service In A Small Town, and The Small Town Advertising Handbook: How To Say More And Spend Less. He is also a seminar and workshop presenter and trainer. He may be reached at 888-550-6100 or PO Box 271, Bozeman, MT 59771-0271
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