Cold Calling

Cold calling (sometimes written with a hyphen) is the solicitation of a potential customer who had no prior interaction with a salesperson. A form of telemarketing, cold calling is one of the oldest and most common forms of marketing for salespeople.

Warm calling, on the other hand, is the solicitation of a customer who had previously expressed interest in the company or product.

Cold calling is a technique in which a salesperson contacts individuals who have not previously expressed interest in the offered products or services. Cold calling typically refers to solicitation by phone or telemarketing, but can also involve in-person visits, such as with door-to-door salespeople.

Successful cold-call salespersons should be persistent and willing to endure repeated rejection. To be successful, they should adequately prepare by researching the demographics of their prospects and the market. Consequently, professions who rely heavily on cold calling typically have a high attrition rate.

Cold calling generates various consumer responses, such as acceptance, call terminations or hang-ups, and even verbal attacks. According to a 2020 LinkedIn report, roughly 69 per cent of prospects accepted a call from a new salesperson in the previous year, with 82 per cent of the group ultimately willing to meet. However, the success rate correlates to the persistence of the seller, with an average of 18 calls needed to connect with a buyer. Meanwhile, most sellers gives up after 4 calls, never getting to a "yes."1 The LinkedIn report referenced a study from consulting firm Rain Group, which surveyed by buyers in 2019. Conversely, a warm call salesperson can boast a more favorable success rate.

As technology advances, cold calling has become less desirable. Newer, more effective prospecting methods are available, including email, text, and social media marketing through outlets like Facebook and Twitter. Compared to cold calling, these new methods are often more efficient and effective at generating new leads. 

Some brands are known for their door-to-door operations. Southwestern Advantage, an educational book publisher, employs mostly college students to canvass residential neighborhoods. Likewise, Kirby Company sends its salespeople door-to-door selling high-end vacuum cleaners to homeowners.

Cold callers today know that pitching a product is a fool’s game. It’s all about building relationships. Some advisors use the strategy of asking specific questions and offering free advice based on the response. Maybe the business owner is concerned about the high-fee structure associated with his employees’ retirement plan. The advisor might make suggestions of companies to check out and offer to do some research and get back to them. This soft-sell approach has worked well for some advisors, especially those early in their careers.

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