Brrrr... I've just been cold calling and boy could I use some hot chicken soup!
Just those two words together—cold calling—puts many people far away from warm and happy. Given that it's so much fun for so many people, and that I have heard a number of times recently that the last nail has been banged into the cold calling coffin, why is cold calling still even on our radar screens?
Because it works.
"It doesn't work," you say? Well, in one sense I agree with you: there are a million ways to do it wrong and fail. Fail at something enough, and it's easy to dismiss the whole tactic. (No matter how many times I try, I just can't hit a Jonathan Papelbon fastball. Swinging a bat at a baseball must not work!)
Before we get into how to make cold calling work, let's first establish that it does work. Of 30 possible marketing tactics for services firms, one rose to the top as the most effective in the research report Increasing Marketing Effectiveness at Professional Firms conducted by Expertise Marketing and LawMarketing.com in 2006.
The top most effective tactic—the tactic above all other tactics—was "arranging business development appointments with clients and prospects." When I last checked, the best way to arrange a business development appointment was neither telegram nor skywriting.
Meanwhile, case study after case study confirms that cold calling can work. For example, I've seen cold calling work as a major part of a lead generation approach, yielding 6 clients in 6 months (a major acceleration of client additions), and increasing the pipeline by fivefold, for Deep Customer Connections, a management consulting firm in the insurance industry.
Making Ten Million Dollars
Many anti-cold-calling folks say, "There are so many powerful ways to build your client base, why even bother trying cold calling? You can give speeches. Publish articles and books. Work your network: it's more extensive than you probably think."
To paraphrase a famous business person (Comedian Steve Martin):
- Question: What's the secret to making ten million dollars?
- Answer: First, start with nine million dollars.
Well, some people don't write very well, they don't have extensive networks, and speaking isn't their bag. Some people can't wait a year for a lead to materialize out of their writing or their network! If you can employ these tactics, great. It's like starting with nine million. But regardless of whether you start with nine million or no million, cold calling still works.
What's In It For Me (WIIFM)
Let's assume you're a Chief Strategy Officer at an $800 million dollar manufacturing firm in Ohio. Someone calls you and says, "My name is John Smith and I'm a change management consultant. Do you need change? Let's meet." Even if you're headed to the vending machine, your immediate change needs probably won't include John Smith.
But let's say John calls and says, "My name is John Smith. The reason I'm calling is because my firm, the ABC Consulting Group, has just recently conducted a major benchmark study on how manufacturing businesses—including Competitor 1 and Competitor 2 of yours—in the Midwest are succeeding with their labor unions in the face of global outsourcing. There are 3 practices that are working across the board and a few that fail most everyplace. If you're interested, we'd be happy to come by and take you through the results."
If this topic is on your mind, you might risk a ½ hour to hear the results. Or you might have some questions right then and there. Either way, if I'm John, I've presented my cold "introduction" of myself and my firm to your company in a way that delivers value to you.
Will everyone take me up on this meeting? Of course not. But if my target list is well segmented and clean, a number of prospects will. When I get in front of them, the topic of conversation will be my recent research, work, and expertise—not a "get to know you and sell you" meeting.
A conversation about recent research is just one of many potential value propositions for the meeting. You might not want to present research because it might not be the best entry for you. But if you're worth your salt as a professional services provider, a conversation with you should be able to offer something of strong value. (If you can't figure out how you can deliver value in a conversation, find a new line of work.)
Regardless of the meeting premise, I have to handle the conversation well to get the best result from this meeting, but the ball is definitely in my court as to what happens from here on out.
How the Numbers Work
Answer the following question: If you get 10 meetings with 10 company leaders who have the right title, are in the right organization, and have the right criteria for being a good prospect for you, and you stay in touch with them fairly regularly in a meaningful way after the meeting, how many would become clients of yours in some capacity over the next year or two?
The most common answers I get for this question are "two or three" or "eight or nine". Let's assume you're more modest, and the answer is two.
Next question: What does a bread-and-butter client represent to you in terms of revenue over the course of a year? It could be $7k, $70k, $170k, $700k, or anything. Let's assume it's $70k.
So, for the cost of setting up 10 meetings with prospects, whatever that cost is, the immediate return on your investment is $140k. This, of course, doesn't take into account long term ROI factors such as repeat business and increased referrals.
The fallacy, in many cases, is that most service providers aren't as good at closing as they think they are, and they don't continue to stay in touch with the prospect regularly and meaningfully after they meet with them. But these factors don't have anything to do with cold calling. They have to do with your ongoing marketing, and the resources you devote to follow up. The cold calling part works fine for what it's supposed to do: make an introduction with a prospective client that can lead to a good relationship. How you choose to develop that relationship is a different matter.
Have Someone Else Call For You
Maybe your practice is busy and you just don't have time to call. Or maybe your practice isn't busy, and you need to invest in generating leads. Either way, you can have someone else make the calls for you.
Even the busiest of professionals have time to meet with a CEO of a company who could be a great client for them. So you go on the meetings. What you don't have to do is make the actual calls.
Reread the WIIFM section of this article above. In the beginning, you must work to craft the lead generation process. You must be involved in targeting the right prospects, providing the strongest value proposition, and working with your telephone business developers to represent you clearly, strongly, and fairly. Then, let them go to work. Cold calling itself is not something that you, personally, need to get good at.
I could make more points that demonstrate how cold calling can work for professional service businesses, and on how to make cold calling itself work better. But for some of you who doubt the process, it still wouldn't be enough, and that's fine.
It's been said that people make decisions with their hearts and justify them with their heads. People don't want to make cold calls, and some don't want to be associated with the method. So they figure out how to justify not employing cold calling, or why other things work better.
If you don't want to make cold calls, don't. But cold calling does work. Most people just do it wrong.