What is Cold Calling?

Cold calling has a poor reputation, largely due to a misconception that it is not helpful in growing a business. But cold calling is not a short process, often requiring multiple interactions with a lead over days or even weeks. Employing the right techniques is key to eventually converting a lead–and we've covered some of the best ones in this article. You'll also find a primer on what KPIs to help you analyze your cold calling performance, and the biggest cold calling mistakes to avoid. Let's get started with the definition of cold calling.

How Cold Calling Works

Cold calling is a sales technique in which a salesperson places a phone call to a prospect to solicit their business, without having spoken to them before.

Cold calling is an important sales technique for new companies, especially those just beginning to build a client list. Here's how cold calling works.

1. Obtain a list of qualified prospect contacts. This can be phone numbers, email addresses, or other contact information.
2. Research the contacts you've received. You'll need to find out if they have been previously contacted by your company, what industries they operate in, and what pain points they most likely have.
3. Prepare a script for your cold call, or the message you will send to open a conversation with a prospect. You should introduce yourself and state the purpose of your call–like that you are interested in learning more about their current customer experience, for example. Mention a common challenge you've heard about while speaking to other clients with similar backgrounds, and ask if it sounds familiar to them. If you get the contact's message machine, be sure to leave your phone number and follow up with an email.
4. Persevere. When it comes to cold calling, the rates of success increase significantly with repeated contacts–in fact 80% of sales occur after the fifth interaction. But when you are contacting a prospect repeatedly, be sure to stay respectful, both in your tone and of the prospect's time.

The Difficulty of Cold Calling

Cold calling is known to be difficult for a few reasons, including qualifying leads to contact, repeated rejections, and following up correctly.

Qualifying a lead

When you receive lead contacts, you can use your CRM and online research to understand if that contact is qualified. Having a clear criteria for what makes a lead qualified will make this step of the cold calling process much easier–you won't have to waffle over who you should invest time pursuing.

Putting in the time to ensure that leads are qualified will ultimately help you save time because you won't be pursuing prospects that will never convert. Use the digital resources at your disposal like LinkedIn, or even paid tools like Pipedrive, to do the necessary research. That's the first hurdle, passed!

Facing rejections

Once you begin making calls, you'll start encountering rejections. Some prospects will even be rude or unkind. Being mentally prepared for this is key, because cold calling is a long-term game. Expect to receive multiple no's or non-responses over the course of a cold calling campaign. And never let it phase you: you must remain polite regardless of the response you receive from a prospect. Don't forget, 80% of sales occur after five contacts to a prospect. Even when a prospect says no at first, that answer may change later. Follow up is key, but doing it effectively can be difficult–which brings us to our next difficulty.

Following up with prospects

To follow up correctly, you'll need to schedule multiple contacts to a single prospect, which are over a period of time. Ideally, those contacts should occur through multiple channels and be automated to decrease admin work. However, this demands an incredible amount of time and organization. You'd have to write personalized messages or scripts for each outreach to a prospect, and ensure you're ready and available when the time comes for each scheduled contact.

Luckily, digital tools have been developed to organize and streamline this process. Sales prospecting tools can help you to schedule contacts to prospects, automate them, and even provide you with outreach templates for maximum efficiency. The ability to schedule the contacts with regularity will help you to avoid bothering the prospects and eventually alienating them.

Examples of Cold Calling

You'll need to tailor the script of each cold call depending on your objective, or the type of appeal you think would be most effective for the prospect. Here are a few examples of cold calls.

Customer experience pitch

In this pitch, you'll invite the prospect to discuss their current customer experience pain points. This is a great option if you know your company has a great customer service experience that you could eventually present as an alternative.

Hello [first name] I'm [your name] from [your company]. I'm calling to learn about your customer experience with [relevant service/product] and how it could be improved. Do you have a couple of minutes to chat about this?

Current customers pitch

Leveraging the credibility and success of a current customer is a great way to pique the prospect's interest and establish the credibility of your own company.

Hello [first name] I'm [your name] from [your company]. I'm currently working with [current client] to help them with [key pain point]. In fact, through our work [current client] has seen [key result]. If you have a few minutes, I'd love to tell you more about how they generated this result.

Personalized pitch

In this pitch, introduce yourself as usual, then mention a professional connection with the lead–ideally this professional connection will provide you with a way to introduce your product or service.

Hello [first name] I'm [your name] from [your company]. I've been working with [connection name] on [pain point] to help them [desirable result]. I'd love to chat with you for a few minutes about how you could achieve a similar result at your company!

Promise to follow up

Whatever pitch you choose, don't be discouraged if you get sent to voicemail. Instead, just sign off with the following message to keep communication open:

Please call or text me at [your phone number]. I'll also follow up with an email if that works better for you. Looking forward to speaking with you soon!

5 KPIs for Supervising Sales Teams

If you manage a team of salespeople or SDRs (Sales Development Representatives), you'll no doubt supervise cold calling. And yes, cold calling is still relevant for growing companies! Communication channels have multiplied with the arrival of digital tools, allowing you multiple options to get in touch with a prospect. Inbound marketing has proven itself to be a powerful lead generation tool. But cold calls have not become obsolete either. As this infographic created by ForcePlus demonstrates:

• 75% of senior managers have made an appointment or attended an event following an invitation by phone
• Cold calls can generate up to 1.18 qualified leads per hour
• 92% of interactions with clients happen by phone

If you operate in a B2B environment, your sales growth depends on your sales call performance. As a manager, it's vital to supervise your teams closely to ensure you're making the most of their calls. This is where your phone system software will be your best friend in monitoring your salespeople. With cloud phone systems like Ringover's, you can monitor your team's calls from a detailed dashboard with advanced statistics. You'll be able to understand: How many calls are made per day? How much time does each salesperson spend on the phone? What is the average communication time per call and per salesperson? What is your answer rate? What is the conversion rate for making appointments/signing clients?

These are all key performance indicators (KPIs) that will allow you to adjust your cold calling methods as well as your business strategy.

Indicator 1: Number of outgoing calls by salesperson

The first thing to do to gauge your salespeople's phone activity is know the number of calls made. Depending on your team's organization and goals, it's useful to observe this indicator over different time intervals. For example, if you have SDRs who make cold calls all day, you can look at the number of calls made per day or even per hour. If your sales team handles negotiations, new customer support, and account management in addition to cold calls, it could be more useful to track the number of outgoing calls per week.

Total outgoing calls

You can track the average number of calls made by your team and its evolution over time. If the number drops from week to week, this may indicate a decrease in your salespeople's motivation. If such an event coincides with a change in your organization (changes in objectives, variable compensation plan, phone system, team growth, etc.), you can target underlying problems and adjust your management and strategy.

Total outgoing calls by salesperson

You can track this indicator by salesperson to see who's making the most calls. By following changes in these numbers, you'll see the impact of your management on individual performance within the team and be able to reward the salespeople who boost team results.

What are the reference indicators?

On average, studies have shown that a salesperson dedicated to cold calling can make 52 calls per day. If you have a very advanced organization with phone productivity tools such as click-to-call, automatic dialers or smart dialers, this rate can rise to 100 or even 200 calls per day. To learn more about the productivity tools available on modern phone systems, download our booklet dedicated to sales teams: Surpass Your Sales Goals with Cloud Telecom.

Indicator 2: Average call time

How long does each salesperson spend on average per call? This number will help you estimate the effectiveness of your sales pitch. Depending on your product and presentation, a first call should be short enough to quickly grab the lead's interest and persuade them to set an appointment for a demonstration. If you test out different sales pitches, you can observe the impact on the average time spent per call as well as conversion to appointments. For example, if you notice your team collectively spends a lot of time on first calls with poor results, it's important to adjust their pitch and train them to be more direct or persistent in reaching their goal of getting an appointment on the books.

We can also look at the average duration of outgoing calls per individual to understand what techniques perform best. If your best salesperson spends half the time on first calls than others and still gets good results, it's essential to study their sales method and share it with the rest of the team. When adjusting the sales presentation, you may–in addition to monitoring this key indicator–use other supervision tools like call monitoring, call whisper, call logs, or even call recording. Call recording, double-listening, and whispering (speaking directly to a salesperson without their caller hearing) will allow you to understand the reasons for variations in call duration. If you want to decrease the time spent on calls for one of your salespeople, listen to their recorded calls, monitor their conversations, and guide them on what improvements could be made for future calls.

Indicator 3: Rate of answered calls

Your rate of answered calls is a key phone activity metric which not only allows you to judge the quality of your sales database, but helps you improve your sales strategy. Sales teams often work with several lead files which come from different sources and are therefore more or less qualified. By observing how many of your outgoing calls are picked up for a certain set of qualification parameters, you can determine the quality of your contact list and compare your different lead sources. By analyzing the answer rate, you'll also be able to determine the time periods in which your leads are the most responsive. You can easily see the best times of the day to call certain leads, and adapt your sales team's approach accordingly.

Indicator 4: Conversion rate to clients/appointments set

Each call you make has a unique goal that varies depending on your industry, the product you sell, and your sales strategy. Generally in B2B environments, the goal of a sales call is to schedule a face-to-face meeting or a demonstration of your solution. But goals can vary, including online registration, a decision-maker's contact information, or other information. No matter what your specific goal is, the first step in establishing a conversion rate indicator is to determine a single, clearly defined goal for your sales team. The calculation is simple:

Conversion rate = Number of calls converted/Total number of calls

Again, you can monitor this indicator at a team or individual level to compare your salespeople's work and identify strengths and weaknesses. You can also observe individual progress over time to track the development of your employees' skills. The conversion rate must be the central KPI that guides your strategy. Any change in processes, tools, or sales techniques must be judged by their impact on this indicator.

For example, if you tweak your sales pitch to employ sharper, more persuasive phrasing and subsequently observe a reduction in call time and an increase in conversion rate, clearly your strategy is a winner! Another interesting application of the conversion rate is that if you have low conversion rates, it may be advisable to change your objective for first calls. If your salespeople cannot manage to set a physical appointment on the first call, set a new, less challenging goal like arranging another call with a decision maker or a remote demonstration.

What is the average conversion rate?

Average conversion rates vary widely based from industry to industry and from team to team. The rate will depend on the quality and relevance of your database, the notoriety of your brand, your product, your call objectives, and seasonality. But in general, with qualified leads it's estimated that a typical conversion rate is around 10%.

Use an advanced tagging system for custom indicators

As we saw in the conversion rate study, all teams have different sales strategies and methods. There is not one absolute indicator to track. Cold calling only succeeds if the salesperson takes into account the lead's context. So, from one company to another, it's important both to personalize your approach and take ownership of your metrics. This is only possible if you have tools in place that provide clear, simple, and applicable performance measurement. That's why it's important your phone system software allows you to tag all of your calls.

With a tagging system, you can adopt and measure custom indicators in regards to your calling activity, generating valuable data. You can, for example, set up a tagging system for contact sources if this is a key criterion for your strategy. With that in place, you'll know the source of each number. You can also create tags related to the call's outcome.When you put a tagging system in place for your calls, it's important to consider the categories of tags (source, result, pitch used, etc.) and possible variables (web/email/cold call/ networks/events/no answer/not interested/appointment made, pitch A/B/C, etc.) to properly train your salespeople in the system so it will be adopted correctly.

Indicator 5: opt for simplicity with a contextualized approach

You can always find new indicators to track, each more relevant than the last. In this article, by presenting some basic indicators for cold calls to explain what is possible thanks to your phone system software. Our best advice is to opt for simplicity to have a solid and durable metrics system. The key to effective and applicable supervision is a stable system in the long term. If you add data and change your approach every month, you risk losing sight of your goal.

These quantitative indicators are imperative for management, but the importance of qualitative feedback should not be overlooked. This involves spending time with your teams, collectively and individually to gather maximum feedback and understand what's going on. As a manager, try making some calls yourself for better understanding. We'll say it again: in sales, context matters. There are methods and good practices, but you'll only really make a difference if you deeply understand your leads.Finally, if your current phone system tool doesn't allow you to generate and monitor performance indicators as you wish, try a free Ringover trial!

The 4 most common errors to avoid to succeed in cold calling

1. Losing too much time on the phone

It's the dream of every salesperson to be able to make calls one after another without ever having to listen to hold music. There's nothing more frustrating than winning over the receptionist, only to be stopped dead in one's tracks. The salesperson starts a day of cold calls with determination, only to find themselves stonewalled by unanswered calls and endless hold times. To limit time spent waiting, hang up at the fifth ring. The probability the person will answer after this point is drastically reduced, and there's nothing gained by waiting any longer. Another technique is to verify your correspondent's availability via LinkedIn. Make contact with the person beforehand and you'll be able to see if their status is online. For cold calls, this is a very important advantage.

2. Poor qualification of leads

In the world of cold calling, there are few things worse than ending up with a list of wrong numbers. This requires more time spent searching for correct information online, which undermines performance. This is why it's best to always have your LinkedIn page handy for finding a useful contact at the company of interest. Even if this person isn't your principal target, there's a good chance you'll get back on track thanks to the additional information they provide.

3. Ineffectively using the phone

In spite of the development of “click-to-call” systems, many still have to manually dial their correspondents' phone numbers. This is a waste of time, not to mention the cause of mistakes, mostly only because of misreading. But with the Ringover system, you'll gain both time and efficiency. Once you've found your target's number through search engines or their website, all you need to do is click the number to make the call. At the end of the day, that adds up to a lot of saved minutes and hours.

4. Not synchronizing your phone system with your CRM

Yes, you read that correctly. The vast majority of companies still don't have an integration between their business phone system and their CRM. The consequence? Overcalling contacts, which alienates prospects.

To avoid this issue, integrate your CRM with your business phone system. Integrations allow you to sync your phone to your CRM automatically and benefit from reliable statistics. Call your prospects with your CRM program and enter all the necessary data without leaving the interface. Not sure if your CRM integrates with Ringover? You can check if it does here.