Cold Calling: Pain or Raw Business S&M?

[see original article with pictures posted at http://blog.tonyjohnston.biz/?p=1695]

It is amazing just how many people HATE cold calling. In fact, I
find most sales people see cold calling as ‘real bloody torture’,
something only for the ‘S&M’ crowd (i.e. SadoMasochists).

For others however, including many of my sales training friends,
they absolutely swear by the approach. But why does this topic bring
out so much emotion and near-religious furore?

Why Sales People HATE Cold Calling 

That, if we look at the anti-CC crowd, is an easy question to answer I believe.

Most people FEAR cold calling!

But before you go getting dismissive, thinking such fear is blind or
irrational, consider if you will how sales people often have a
legitimate fear of cold calling for real personal reasons and/or for
real professional reasons.

The sources for a legitimate personal fear of cold calling can be:

1. Fear of approaching strangers
2. Fear of embarrassment
3. Fear of painful rejection

The sources for a legitimate professional fear of cold calling can be:

1. Confusion over cold calling’s purpose
2. Confusion over message
3. Confusion over objective
4. Confusion over approach
5. Confusion over organizational responsibility

Thankfully, each of these types of fear is addressable: by training
in the first case; and by better management in the second. But before
considering that, or deciding on whether cold calling is right or wrong
for your organization, I suggest taking a step back for a moment to
considering the bigger business picture involved.

To Cold Call OR Not To Cold Call, That Is The Question 

Let’s first consider why sales people do or might want to do cold
calling. Many would say: it’s to drive sales. And if we look at things
simplistically or just focus on the end objective, they are absolutely
right. But the real picture is not one dimensional.

No matter if your company is big or small, all companies need buying
customers to survive, because a business without revenue cannot
continue for long. And the part of the organization that’s responsible
for getting customers to buy is typically called Sales & Marketing
(the real ‘S&M’ in business). This is the raw end of all business
organizations because it is so vital, real and emotional.

And I think it is called Sales AND Marketing for a practical and very good reason.

That is because sales is first, for without achieving a positive
sales result which drives revenue, the business will die sooner or
later. But turning to the other end of this name equation, tell me:
what is the real business purpose for Marketing?

What Business Purpose Sales & Marketing Serves

If we cut through all the mumbo-jumbo involved in managing the 5 P’s
of Marketing (namely: product; price; placement; promotion; and
people), I suggest that the real business purpose of Marketing is to
deliver leads to the company’s sales force for processing.

However, no matter whichever way you look at it, there is always a
gray or overlap zone between the Sales and the Marketing functions in
any company. And, a vital management question companies need to face
when it comes to revenue generation and growth is, where in this zone
it is best for any particular organization to draw the line between the
two functions?

[See The Gray Zone Between Sales & Marketing diagram at http://blog.tonyjohnston.biz/?p=1695]

To help answer that question, here are some information gathering
questions I have developed that can help management teams uncover where
and when in their organization Marketing’s responsibility to generate
leads should end and the Sales Force’s responsibility to start the
‘sales process’ should begin:

1. What you are selling?
2. Who are you selling to?
3. How complex / involved / vital is the ‘buy’ decision for customers?
4. How self-motivated are customers to address their need for your offering?
5. What alternatives do customers have and what is the appeal of each?
6. How frequently do customers have a need for your offering and how often do they buy?
7. What range of means do customers employ or avenues do they take to buy your type of offering?
8. How readily do customers acknowledge or initial action to address their need for your offering?
9. How important is trust in the customers’ purchase decision (e.g. how do they qualify who can serve their need)?
10. How important is having ‘other need satisfying alternatives’ for your customers?
11. How fast or slow does it take customers to transition from being a
    ‘suspect’ (a sales lead) to a ‘prospect’ (a semi-qualified / interested
    lead that’s a sales person can begin to process)?
12. What are the characteristics in terms of volumes, time and cost associated with your company’s total sales funnel?
13. What is the cost per qualified lead under each of your lead generation alternative methods?

How To Decide On Cold Calling

In my view, cold calling is a Marketing activity and it needs to be
seen as such, even if the sales force does it. Also, it is important to
see cold calling as but one method companies can use to generate the
leads they need to feed their sales process and drive their revenue
generation.  

And now that you have the information gathered by answering the
earlier-asked questions, you can move on to decide if cold calling is
right for your company, and who should do it. This you can do by
answering these three decision-oriented questions:

1. What are the most effective methods your company can use to
   generate live leads (i.e. specifically indentified ‘suspects’ that
   through some form of interaction have been partially qualified as a
   sales lead)?
2. How qualified or matured does a lead need to be before the
   buy-oriented engagement part of the sales process can truly begin? and
3. Who in the organization should best be responsible for generating what kind of leads based on cost?

For a bottom-line simple way to conceptualize the decision behind
doing or not doing cold calling, you might think of asking yourself:

“Should the company be taking
(i) a shotgun or (ii) a rifle approach
to growing the business?”

If you choose shotgun, then classic cold calling is right for you.
If not, it’s best you use some other lead generation methodology, one
that is better suited to your business and how your customers buy what
you have to offer.

Clearly, the decision about whether your organization should or
should not do cold calling is an involved, strategic decision – one
that deserves careful, considered thought. In my opinion, it is best
that organizations first resolve the question of whether or not cold
calling is right for them and who should do it. Once that has been put
to bed, then is the time to start considering how training to help your
sales staff with any personal cold calling concerns or fears they may
have.

How A Sales Process Audit Can Answer Your S&M Questions

If your company would like help answering the ‘cold call’ or ’sales
training’ question, or developing answers to the questions asked above,
one way I can suggest is by having a Sales Process Audit
done. This is a quick and easy do, and it will give your organization a
documented, unbiased picture of what the sales & marketing people
in your company are ACTUALLY DOING right now to generate sales. Having
it will help you settle vital revenue and growth related issues. For
more information about the Renbor / Compass North Sales Process Audit,
visit the following webpage:

  Sales Process Audit (‘SPA’) – Is this what your organization needs?

  >> SPA Service Providers:

      - Renbor Sales Solutions Inc.  –          www.SellBetter.ca

      - Compass North Inc.             –          www.CompassNorthInc.com

© Blog.TonyJohnston.biz & Compass North Inc. 2009

Article by –

Tony Johnston, CMC, CGA, MBA, BA (Econ)
President
Compass North Inc.
18 Balding Court
Toronto ON
M2P 1Y7
Office:  416-342-5652
Mobile: 416-346-4140
www.CompassNorthInc.com
www.CNiRapidResearch.com

Tony Johnston is a top level executive &
management advisor who is a business results specialist with success in
4 turnarounds and many significant other operations, deal making and
finance oriented accomplishments to his credit. He helps companies
drive:

› top line growth (revenue)
› bottom line improvement (profits)
› cashflow management (credit line control)
› growth strategy (more / new)
› financing & stakeholder relationship management (debt / equity)
› enterprise value maximization (mkt price)
› acquisition planning & execution (find / close)
› divestiture preparation & execution (prep / negotiate)
› information gathering (competitive intel / market research)
› crisis control (turnarounds & wind-downs)
› enterprise leadership (CEO / CRO / CFO)

Compass North Inc. is a management & advisory
services firm that helps companies achieve important, challenging
operational, financial and transaction oriented goals. Examples of what
we do include helping companies and their owners:

– make better decisions by providing customized competitive intelligence,
– grow by crafting strategic plans and implement them,
– get turned around by dealing with their debt or other business problems,
– borrow more money and/or raise more equity, and
– plan, prepare, negotiate and close acquisitions, divestitures and ownership
   transitions.

Bottom-line: The benefit that Tony and Compass
North Inc. deliver is helping company owners maximize both what they
earn while they own their business and what they bank when they sell.

> Follow me on Twitter @CompassNorthInc