"I love cold calling," said no salesperson, ever.
"And I love answering cold calls from salespeople," responded no one who's ever answered a phone.
It's fair to say that few people relish making cold calls, and even fewer people enjoy receiving them. With so many people dreading them, on both ends of the telephone line, why do companies continue to do cold calling?
In this post, we'll explore how cold calling has changed in the commercial real estate industry, and how smart tools have changed the way B2B companies connect with each other. We'll also look at cold-calling alternatives that use smart sales enablement tools that focus on building relationships.
What Is So Great About Cold Calling? Advantages and Disadvantages of Outbound Cold Calls
Cold calling is a form of outbound sales where teams call prospective customers or clients who have never shown an interest in their product, services, or brand.
A prospect becomes a lead when they raise their hand, figuratively, and show an interest in your company. This might be by viewing your website, visiting your booth at an expo, following you on social media, or some other action that implicitly gives you permission to reach out to them.
In the CRE industry, for example, B2B companies purchase lists of commercial property owners from vendors. With this information, their outreach teams can call the CRE companies, send them postcards, or email them with offers, all in the hopes of getting to the next step – a meeting, demo, or something that furthers the lead toward sales conversion. Conversion rates, as LinkedIn Sales Insights suggests, are typically in the single digits for cold calling.
Single digits.
That means that for every 100 numbers your outbound sales team dials, fewer than 10 will convert to warm leads. And how many of those warm leads convert to sales and long-term customer relations? Very few.
Advantages of cold calling
So, why do cold calls? Cold calling has some advantages. It can help your business:
Identify and reach new customers (best case scenario)
Gain insights about your industry
Practice and perfect your cold calling scripts
Build brand awareness
The problems with cold calling
Cold calling has its disadvantages, as well, including very low conversion rates. About 2% of cold calls lead to follow-up calls – not sales, but follow-up calls, according to LinkedIn Sales Insights. Additionally, cold calls can:
Annoy your targeted audience, which leads to ...
Negative brand connotations, which can ...
Cost your organization in wasted time and resources, including...
High turnover rates among your business development team.
Why do so many B2B organizations experience low conversion rates with cold calling yet continue to do it? Change is hard. Resources are finite. It's all they know. Lack of knowledge and resources to build leads through other means.
Is Cold Calling Worth It?
Cold calling tends to have a very high rejection rate – according to LinkedIn Sales Insights, fewer than 2% of cold calls convert to warm leads. In the same survey, 63% of salespeople cited cold calling as the worst part of their jobs.
DNB (Dun and Bradstreet) estimated that 82% of B2B firms have trouble managing data, including the volume of data. They also found that 78% of surveyed B2B firms have trouble scaling targeted one-to-one customer engagement strategies. Hence, they rely on scalable methods, such as using rapid dialers and cold calling scripts to try to drum up business.
If you're buying lead lists and using cold calling to call prospects, the answer seems obvious: No, cold calling isn't worth it.
But if you're using data-driven prospecting tools that enable your sales team to make personalized outreach and build relationships, then heck yes, cold calling is worth it.
Sales-Enabled Prospecting Is The New Cold Calling
Cold calling isn't dead, but it has evolved. Today, thanks to big data, sales-enabled prospecting has replaced the age-old practice of cold calling from NAP lists (name, address, phone).
For example, in the commercial real estate industry, companies can use smart datasets with multiple information points to reach out to the right prospects at the right time. Looking for a commercial developer with experience in medical facilities in the Southwest? Or maybe you're looking for office owners in the greater Chicago area? Or perhaps you'd like to reach key people who work for a commercial property management company that handles senior living and extended care facilities.
These are the types of queries that CRE sales enablement tools support.
Instead of using commercial real estate prospecting scripts that sound rehearsed and impersonal, sales outreach teams can create personalized messages through email, voice mail, or even prior to attending in-person networking events.
"Biscred has built just such a sales enablement tool," said Ben Hertz Biscred General Manager. "Anyone in the CRE industry can run targeted searches that match their needs, so they can create proposals that align with prospects' needs."
Hertz explained that when you reach out to a prospect and demonstrate that you've done your homework and taken time to learn about them, you're more likely to get to the next step in the sales process. You're also less likely to waste resources on commercial property that doesn't align with what your company offers.
Tips for Making Cold Calling More Efficient
Doing your due diligence upfront, before reaching out to prospects, makes sure you reach the right people at the right organizations. It's similar to the saying that an ounce of prevention is worth a pound of cure: A few minutes of due diligence is worth an increase in ROI. Here are five cold calling tips to become more efficient.
1. Don't waste time on prospects that don't need your products or services.
Sales enablement allows you to create a list of prospects based on multiple factors including people with specific titles (vice president, COO, etc.); asset experience (multifamily housing, medical, retail, etc.); and location. In this example, we used Biscred to find retail, office, and mixed-use CRE companies in the Southwest U.S.
2. Personalize cold call messages and be genuine.
Instead of using CRE cold calling scripts, provide your outreach team with talking points about your company and what you offer. Start with an introduction, not a sales pitch. Keep your intro short, so you can shift the conversation to the prospect and what they need. Use data from Biscred, for example, to learn about the people and organizations, so they can craft unique, personal questions. Personalized messages are more likely to get responses.
3. Gather feedback about rejections.
By providing sales outreach teams with data-driven sales enablement tools, they're more likely to find marketing-qualified leads, which leads to better conversions. But when they do get rejections, ask for their feedback. When sales teams feel like they're being heard, they feel more invested and valued by their employers, and they perform better. Gather your own data about calls, so you can test, learn and iterate on your outreach methods.
4. Be transparent about your organization.
People tend to trust companies that use social media and have a good, up-to-date website. Support your sales force by providing them with digital assets that they can share with prospects.
5. Use social media to connect.
Speaking of social media, why not use it to connect with prospects? LinkedIn, for example, lets you know when you have mutual connections with prospective leads. This is networking. It's using social media to build relationships and facilitate introductions between business people.
Are You Still Buying Lead Lists?
We aren't here to trivialize the value of lead lists. In fact, cold calling from lead lists can have value for certain applications. But in today's digital age, smart companies don't rely solely on NAP lead lists and rapid dialers following impersonal scripts.
In the commercial real estate industry, for example, companies use technology like Biscred to smartly connect with other companies in the CRE industry. They do their due diligence to build networks of leads.
Speaking of generating leads, here's our call to action: We invite you to see a demo of how Biscred works and how your sales team can change their cold calling efforts in seconds.