Published November 14, 2011

The Most Difficult Step in a Sale--Cold Calling

Cold calling is the dread for almost all sales representatives, but it is the absolute key to successful selling . This one step is how many new prospects and new clients will be developed in any industry, including collections. I estimate 30% of any collection sales representative’s sales will develop as a result of a cold call, making this the single most important step that can lead to new clients.

I define a prospect as someone who is willing to move through the sales process with a sales representative. Since, on average, it will take about 6 months to close a sale in the collection industry, if a sales representative does not identify and talk to a new prospect today, there will be no new client as a result six months from now.

And many sales representatives do not realize the objective of the first call to a new prospect is to get an appointment. This is, in fact, the “sale” that needs to be made on the first call. Many sales representatives try to make the final sale during the first call on the phone. This is unnecessary and counterproductive in all but a few niche creditor markets.

A major question many business owners have asked me is: “How many different appointments do I need with prospects before it leads to a sale?” The answer is that it varies sometimes by the market and sometimes by the company. Compounding this, just as not all prospects will lead to a sale in general, even the ones that do make a decision to change vendors will not always pick you. It’s a numbers game.

A dashboard that I use with most sales representatives calls for about 65 call attempts per day over any 8-hour period. This should lead to about 12 conversations per day and ultimately 1 or 2 appointments. If this strategy is followed, a sales representative, assuming they know what to say on the phone, could easily generate 5 to 8 appointments per week. This will fill up your future calendar very quickly. A good sales representative should be able to close 30% or more of the prospects that enter the sales cycle. This means a .300 “batting average” can land a sales representative into the sales hall of fame.

If done successfully, a sales representative eventually will not a have a full day to make this number of calls. The person will be servicing new clients. This is where the importance of using a good contact management system comes into play, which will allow a sales representative to schedule follow up calls and know when to make them, with a reminder.

I also strongly suggest that all sales representatives, no matter how busy, set aside a specific time while in the office for cold calling. This could be 2 to 3 hours in the morning or later in the afternoon.

You can see by the numbers that if this process is followed for 6 to 8 months, a sales representative will be very busy with appointments and will have less time for cold calling. Keep in mind that half of the first appointments will lead to follow up appointments, which again will reduce the time available for cold calling.

In-person cold calling still works, but I do not encourage sales representative to try to make impromptu cold calls on the road unless the sales representative is already traveling to appointments in the immediate area. I do encourage face-to-face cold calls if a sales representative has extra time and a specific list of potential prospects in the same area, taken from a contact management system, before leaving the office. These cold calls will lead to appointments in the future, even if no meeting takes place and the sales representative leaves a card.

The process, when executed correctly with the right people and management approach, should, after 6 to 8 months, lead to 60 or more past and future meetings. If a sales representative can close 30% of these prospects as I mentioned above, it should generate 18 new clients. This might sound pretty simple. It really is – if a sales representative is willing to make the commitment to cold call prospects on a daily basis for a specific amount of time each day.

The more experience a sales representative has, the more successful a sales representative should be. This will justify less time devoted to cold calling. However, even the most experience sales representative has to allow some time for this activity in order to fulfill the most important aspect of selling, which is the generation of new contacts.

There are specific cold-calling techniques, such as leaving the right voice message and the number of messages to leave. The correct message will depend on the information that a sales representative has found in regards to the targeted prospect.

To learn more about effective cold calling techniques, please contact me at 215-643-2484 or paul@netgain4results.com.

Sincerely,

Paul Morrow
P: 215-643-4282