The 5 Reasons why Cold Calling is dead, dead, dead.

I had a very interesting conversation this week with the owner of a very successful Sales Training company about Cold Calling.  His company provides classes on the topic of Prospecting & Lead Generation, in addition to Sales Skills, Customer Service, and Account Management.

Cold Calling

The position of this obviously very successful individual, who owned an obviously very successful company, was Cold Calling is king when it comes to lead generation, and online marketing is just not as effective. I had the audacity to disagree.

If you have ever done any kind of sales, from Avon to Real Estate, then you are familiar with terms like Prospecting, Farming, and Lead Generation.

If you, as a sales rep, want to consistently earn a large annual income you need to understand the importance of business development, and will spend the majority of your time either actively prospecting for new business or closing sales. We all agree with this.

Cold Calling can accurately be described as Phone Spam, and is the soliciting of business from potential customers who have had no prior contact with the salesperson conducting the call. It is primary an over-the-phone process, making it a source of telemarketing, but can also be done in-person by door-to-door.  I have experience with both methods.

Sales is all a numbers game. If one makes X-number of calls, mailers, emails, or whatever, they will generate Y-number of sales. A coach or trainer will tell you something like every 100 Cold Calls (fairly easy to do in a few hours) will generate 1 new Sale. However, as any salesperson actually doing the work will tell you, this is an oversimplification.

What these coaches and trainers don’t tell you is, those 100 Cold Calls are is actually more like 100 conversations, averaging 2 minutes.  If every call connected to a person, this isn’t too difficult to do either, but that is not the real world. I would admit though, top salespeople will probably convert at rates much higher than 1 out of 100 when they actually get someone on the phone.

These old-school marketers most likely have not been in the sales trenches for decades. They may have been successful in their day, but have been managing, coaching, or teaching so long that what made them successful may no longer work. Technology (and the law) no longer favors Cold Calling. I even had one of these old-timers tell me if a salesperson wants to be successful they will ignore Federal and State Do Not Call lists.

In the real world, a salesperson can reasonably dial 250 calls a day, and never speak to a person. This a why the marketing gods created auto-dialers. There are only so many calls human fingers can dial, and if people were only getting a human in 1 out of a 1000 calls, and 1 sale out of 100 conversations, this means one needs to make 100,000 calls per sale.

These numbers translate into one person, making one sale every 400 days… or based on the 5 day, 40 hour work week, making one sale every 1.5 years.  Can any company or IC salesperson afford that kind of ROI? Again, this is why companies now use computers to dial and hangup, dial and hangup, and dial and hangup until they reach a human voice.

The 5 Reasons why Cold Calling is dead, dead, dead.

1. Caller ID, first created in 1968 but not offered by phone companies until 1987, was the first nail in the coffin of Cold Calling. The service gained popularity in the late 80’s, and people started screening their calls. If you were a person who had Caller ID, you automatically started screening out the salesperson and telemarketer.

2. Wireless Phones was the next problem for Cold Calls. Again, wireless phones have been around for a very long time. However, they really started to take off with the general public in the ’90s.

As wireless phones gained in popularity, people started to rely on land-line phones less and less. Over time, people you wanted to talk to called your cell; those you didn’t called you on your home land-line.

3. The Do Not Call Registry Act of 2003 should have been a bullet right between the eyes for Cold Calling.  The law is intended to give U.S. consumers an opportunity to limit the telemarketing calls they receive.

Also, under the law wireless phone numbers did need not be included on the registry to avoid most unsolicited calls. FCC regulations prohibit telemarketers from calling a cellular phone number with an automatic dialer under all circumstances.

While companies and IC salespersons risk a $16,000 per violation, the law has been difficult to enforce, and lawbreakers fail to comply with the Do Not Call laws on a daily basis.

4. Cutting phone-lines is a new trend making Cold Calling not worth the time or effort. As wireless phones have become more reliable and popular, people have started choosing to no longer keep a home phone land-line.

This cutting of land-lines has a number of implications, but for salespeople who are local (automobile sales, real estate) it is a big kick in the pants. It becomes much more difficult to “Farm” neighborhoods, a technique used to become known as “the guy” in any given area.

5. Smartphones are now absolutely putting it to Cold Calls, and may finally start putting this dinosaur in the ground.  They began to become popular in the early 2000s, but really took off after 2007 with the introduction of the iPhone and Android.

Smartphones put the power of who can call you in your hands. We no longer have to rely on services such as Call ID to screen calls or the compliance and enforcement of Do Not Call laws.

Today, developers have created Call Control apps for your smartphone. These companies create blacklists that will automatically send known telemarketers, debt collectors, and other annoying callers straight to voicemail, without your phone ever ringing. Sweet, right?!

With this, automatic dialers are now becoming less and less effective, and will soon be obsolete. Call Control apps stay on top of their game. Users can report annoying callers that are not on the universal blacklist, and also allow users to create their own personal blacklists.

Old-school marketers, who cling to Cold Calling, became successful in the days when you could open a phone-book and just make call after call, with a reasonable expectation that almost every call would result in a live person picking up the phone. Those days are over, and Cold Calling needs to be put to rest.

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