“Cold Calling” for Developing Sales, New Customers and New Markets
The traditional approach to “cold calling” is simply calling a new customer or contact that you have not spoken with before, have not done business with before, and basically speaking do not have any business relationship with.
Many of the more aggressive companies that showed business growth often utilized “cold calling” to help grow sales.
They offered significant incentives and large commissions on new customer sales to reinforce utilizing “cold calling” more.
As the old saying goes, “people are motivated to do a good job on those things that they receive a significant financial incentive for”.
The business environment has many significant changes that has made the traditional “cold calling approach”, obsolete.
What are these changes?
1. The economy has a down turn plus many businesses and companies have moved much of their operations off shore.
There often are less companies and businesses to approach.
2. Many businesses and companies have significantly downsized its staff.
This has caused a situation of not enough staff to accomplish all of the important daily routine work needed to get done.
The staff that is left, do not have time to spend with sales people trying to visit with them to keep abreast of new information, new products and services available.
Often, companies’ staff will spend time only with sales people or account managers that they currently do business with and that they have issues to resolve.
This reminds me of a cartoon that has a drawing of a king with his army ready to do battle and his army is carrying swords and spears. There is a sales person with a machine gun in his arms and he is trying to get an audience with the king.
At the bottom of this cartoon or picture it has the king saying “Tell the sales person to go away because I am too busy and do not have time for a sales person”.
3. Due to the rapid advances of technology, products and services, if the products and services that you represent are not on the leading edge of what is being offered, most companies will not be interested in spending any time with you.
4. The new laws and regulations controlling telemarketing hinder freely calling companies and businesses that you do not currently have a business relationship with to introduce yourself.
These new telemarketing regulations apply to both businesses and consumers.
To obtain more detailed information on these new regulations and laws contact your trade associations and professional business associations. They will have the detailed information to share with you.
This is an example of just one of the benefits of being an active member of trade associations and professional business organizations.
They can be a good resource to your for important information.
5. Due to business downsizing, consolidations, movement of businesses off shore, and high unemployment; confidence for job security is very low.
Many sales people want to limit their efforts of developing a company’s business due to their lack of confidence of holding onto their job for any length of time.
“Why devote much time to building a company’s business with establishing new accounts from networking and cold calling.”
“After all, why take time away from trying to make commissions from quick sales of established customers while I still have a job and am employed.”
“Why invest in a company’s growth of new customer development which requires more time and effort only to become unemployed some time in the near future.”
Yes, I have heard such comments from many sales people and account managers as well mid to senior management staff.
This is a terrible business disposition and scenario to be in and obviously
not productive for any business growth.
The demoralization of workers and sales staff is very concerning.
Depending only on traditional advertising hoping for new customers to contact you is costly and takes much time.
Advertising is important to get the market and potential customers to know of you and recognize your name.
I question if it will cause your telephone to ring constantly with new potential customers asking you to come out immediately to talk with them.
The exception is if you have a technologically advanced product or service that no one else has and that customers drastically need right now.
A cure for some devastating disease or ailment would qualify for such a situation.
With all of these business changes along with the new telemarketing regulations and laws, you must creatively find ways to develop business relationships that will help you find new potential customers.
Cold calling a new contact or new customer using the telephone without an established business relationship is being hindered by new telemarketing regulations and laws.
These new regulations apply to both the calling of consumers and businesses.
Once you have read the details of these new telemarketing regulations you may become concerned about how you can grow your business with new customers.
If your telephones are not ringing constantly with new customer inquiries or if your email is not loaded with new customer inquiries, you need to find ways to establish relationships with new potential customers.
Some of the ways to find new customers to contact include;
1. Review all old customer databases to uncover both old contacts to call and previous customers that use to do business with. You need to get back in contact with them to renew the business relationship with.
2. Review old sales staff call reports of customers contacted but never did any business with. Try to renew the business relationship. Of course there is some regulations and interpretations as to length of time expired since last contact or business relationship to qualify whether you can “cold call” them.
3. Review old sales leads no matter where the inquiry came from and re-contact them to try to establish a business relationship.
Old sales leads often have 80-90% obsolete information.
But, 10-20% of potential new customers to get back in contact with is better than none.
4. Being an active member of networking groups can produce new customer leads and new business relationships that can seek out customer leads for you.
5. Being an active member in local business groups such as the chamber of commerce, professional business groups, and a variety of other local business groups can help find new potential customers as well as leads for you.
This supplements your efforts with the formal networking groups which was just mentioned.
6. Being an active member of your various trade associations in all of your market niches is important.
7. Active participating in trade shows in all of your market niches, locally, regionally, nationally, and internationally can help you find new customers and obtain key contacts to help you develop new business relationships.
Participating in trade shows can be costly and time consuming but it is a viable way to develop your business.
8. Expanding your sales channels with distributors and dealers in niche markets can help you develop business relationships with new customers.
9. Utilizing independent sales agencies in niche markets will also help you identify and call on new potential customers.
Such sales agencies have established relationships with businesses in their market that would help you to identify and call on new potential customers.
Only by utilizing many of above approaches will companies be able to build new business relationships with new customers to grow their business.
These methods can also help break down the obstacles to the traditional “Cold Calling” which is quickly changing.
The do’s and don’ts of “cold calling” are fairly simple.
1. Do adequate research and investigation to understand any new potential customers
prior to any contact attempt. Know their business and needs.
2. Obtain a business relationship with individuals that will help you gain entry to
contacts within new potential customers.
3. Always reciprocate with consideration and a courteous thank you to anyone who helps
with a new potential customer as well as reciprocate with customer leads and contacts
for them as well.
4. Know the telemarketing regulations and laws and they relate to calling businesses and
companies that you do not have current business relationships with.
Respect the laws and regulations.
5. If a new potential customer contact does happen, always follow up adequately and if
appropriate, follow up several times. Keep the relationship active and current.
6. When a new contact is made, always network by asking who else in their company that
you should contact and also what other companies or people that you should be
contacting as well.
7. Always be respectful and express consideration for the new contact’s time that they
spent with you.
Make sure that the new contact feels good about talking with you and possibly working
8. Networking and having “you were referred to me by _________” is very important.
1. Do not break the new telemarketing regulations and laws regarding contacting businesses using the telephone.
2. Do not make the first contact with a new contact or “cold call” without first investigating the new company or business as to what their business is and what some of their possible needs are.
Never approach a new contact or “cold call” with inadequate preparation.
3. If a new contact does show some possibilities for a business relationship or sale, follow up appropriately and continually. Do not let it get “cold”. Constantly follow up at some appropriate time interview to keep the business relationship active.
The average sales staff and account manager struggles with “cold calling” for several common reasons.
1. They are not adequately trained
2. The company that they work for lacks a process and support for such
3. Sales staff are normally mentally programmed to focus on closing a sale quickly or they will lose their job.
“Cold calling” requires a lot of time in networking and preparation which takes them away from their main focus of closing a sale quickly.
Staff often spend the majority of their time and efforts looking for the quick sale from existing customers.
4. Most commission and incentive programs are based on achieving a sale and not on developing new business relationships via “cold calls”.
Many companies struggle with getting their sales staff to “cold call” for many common reasons.
1. The management themselves are not adequately trained or experienced in how to do it.
2. The management does not supply constant training for skills in “networking” and “cold calling”.
3. An effective process with adequate support is not set up for ”networking” and “cold calling”.
4. An effective new business and new customer program with goals and measurements are not set up.
5. Often an incentive program of significant substance is not set up to motivate staff to seek out new customers and new relationships.
6. Often, companies lack the vision and importance to developing new customers and new business relationships to assure business growth.
All of this starts at the very top executive level.
I have already discussed various methods to find new potential customers and develop a relationship.
Let’s now briefly discuss some creative programs and approaches that some successful companies are using to accomplish these things.
Successful companies focusing on business development and obtaining new customers in all niche markets have developed aggressive programs that manage 5 key factors.
1. Utilizing distributors and independent sales agencies in niche markets
2. Extensive networking through professional groups and associations
3. Aggressive trade show participation
4. Incentive and commission programs to aggressively motivate and reinforce new customer and new market development
5. Continual training on important skill development
Such companies are accomplishing these key factors with a combination of existing staff, dedicated additional staff, and outside resources.
The additional sales and profit results from their efforts more than pays for the effort.
Many companies started assigning their management staff to actively participate in networking groups, professional business groups and trade associations.
In many of these companies, the management staff had schedule conflicts with participating in such groups regularly plus the staff lost interest in actively participating.
Management was often tired and fatigued from their daily work and pressures.
They just did not have the strength and attention available for such activity.
These companies conquered these obstacles and challenges in two ways.
The first is that a formal schedule was made of all networking groups, trade association meetings and events, and professional business group meetings.
A variety of the staff and not just sales managers were assigned to various group meetings and dates so as not to burden just a select few.
Special bonuses were established for active participation in the activities along with any positive results obtained from them.
In addition, special company paid time off was given to each staff for their personal time that they gave for such activity.
Their participation in such activity was also made part of their job description and measurement to qualify for special bonuses.
Some companies added new staff to focus on being a professional liaison for networking groups, professional business groups, trade associations, and assisting in trade shows.
Such dedicated staff had a full time position to network and find new customers and new markets.
Their position title is often a Director of Business Development or Company Business Consultant.
Aggressive trade show participation was achieved through using a combination of outside resources, field sales staff, internal staff going to the field to manage a trade show booth, and utilizing distributors and independent sales agencies in niche markets.
Being able to contact new customers to say that they met them at the trade show or a specific person from their company who attended the trade show suggested contacting them directly, is a professional and effective approach in developing business relationships.
Such an approach tends to be a “warm call” instead of a “cold call”.
Very creative commission and incentive programs were developed to reward and motivate staff participating in these functions.
Many of these programs extend to special incentives for achieving actual positive sales and profit results from the activities.
Remember people do a good job on things that are adequately reinforced with incentives and commissions.
Now, I have seen a company that did negative reinforcement and negative incentives.
Their approach was simply you do what we say & perform as we say or we fire you.
The staff hated working there and all were looking for jobs elsewhere.
There were several other negative ramifications from this negative approach as well.
Recruiting and retaining skilled professional staff was not accomplished there under this situation.
Companies that expanded into niche markets utilizing independent sales agencies and distributors proved to be effective once they got over the mind set of trying to protect their own personal turf or personal kingdom.
It was common to hear staff saying how they can do it all in all areas and in all markets even though they have been unable accomplish such in the past.
Most of the time there just was not sufficient staffing or funding available to accomplish this.
Once the personal egos were appeased and the independent agencies and distributors in these niche markets were contracted with, good positive results appeared.
Most staff then became a believer.
Through these independent agencies and distributors, company sales staff could make actual calls on new potential customers due to the local established relationships.
So the “Cold Calls” were actually warm ones due to established relationships of the independent sales agencies.
We have discussed various ways to find and contact potential new customers which often are called “Cold Calling”.
The importance of a structured incentive program with goals and measurements was discussed.
Niche marketing utilizing independent sales agencies and distributors was covered.
Changes in the business environment with downsizing, businesses moving offshore along with workers morale declining with all affecting business development was covered.
Tradeshow participation in niche markets were mentioned.
We have discussed how you can network to find and make contact with new customers
without using the traditional cold telemarketing that could be restricted from the new telemarketing regulations and laws.
Networking is a good way to be personally referred to new customers.
It is a good way to call a new potential customer and be able to say that a specific person who personally knows them recommended that they contact them directly and that person has already called to let them know of the call coming.
This approach can advance previous “cold calling” attempts to the more effective “warm calling” because someone has recommended you to the new potential customer.
It is an effective method to avoid breaking the new laws and regulations of unwanted cold calls using telemarketing and the telephone.
If by chance you are thinking about focusing some of your sales staff time on just dropping by or visiting companies without appointments hoping to get information and future appointments, you may find this approach to be costly, not time effective and most likely lacking positive results.
We also briefly mentioned the new regulations and laws that hinder cold call telemarketing to both consumers and businesses.
I encourage you to contact your trade association or professional organization that you are a member to get more details on these and how it affects your business and operations.
Possibly, the new regulations and laws prohibiting cold call telemarketing will force businesses back to the fundamentals of how to find new customers and markets, develop business relationships, and grow the business.