If you’re new in the finance industry, the activity you most dread is probably cold calling. For many people, cold calls involve stepping outside of their comfort zone. It also triggers some inbuilt cultural norms – such as the belief that calling strangers makes you a “nuisance”. The feat of cold calling has created several myths, which prevent the effective use of this technique. Here are some of the most commonly perpetuated errors:
If by “effective” you mean conversion rates, then research from organisations like SalesForce suggest this is likely a myth.
SalesForce, for instance, found that cold calls have a conversion rate of as high as 8.21 per cent, whereas cold emails have conversion rates of 0.3 per cent. InsideSales estimates a conversion rate of five to 10 per cent. By contrast, the average conversion rate for Google ads – across all industries – is 3.75 per cent by search, and 0.77 per cent by display.
The truth is, there’s still significant power in human interaction, versus text on the screen. Otherwise there’s no demand for seminars or lectures right? We’d simply read the scripts.
While the results may vary based on the caller’s skills, don’t assume that cold calling is inherently flawed as an approach.
Some may see cold calling in purely numerical terms: If you convert eight per cent of your calls, then making 100 calls means eight appointments, whereas 2,000 calls means 160 appointments.
If only it were that simple.
It isn’t true, because cold calling is not a science like physics. You may find, for instance, that 100 calls result in eight appointments, while 2,000 calls result in…also just eight appointments.
It’s not about the sheer number of people you call, but the strategy behind your cold calling.
This means tracking responses based on:
● The demographic you’re calling (age, education, income level, etc.)
● The different scripts you’re using
● Time at which you call (e.g., lunch hour? After work? Or even seasonal events, like near Christmas or New Year?)
● The follow-up or closing, at the end of each call
If you don’t track these details, and simply rely on calling more and more people, it’s analogous to running repeatedly into a brick wall. The key to successful cold calling is to try different approaches and find the most effective path, not simply to call more.
The opposite may be true. Often, promising to keep within a time frame can generate a better response.
For example:
“Hi XYZ, I’m calling from ABC Finance; how are you doing?” could sound like you’re about to take up a lot on someone’s time.
“Hi XYZ, I’m calling from ABC Finance; do you have five minutes to talk about (whatever topic the product is about)?” saves both of you time. If the prospect has no use for the product, you won’t waste time with longer conversation. If they are interested, they know
you just want five minutes; and they may decide to give it to you.
Not being “salesy” means not being too aggressive. It doesn’t mean that you need to have long, meandering introductions.
Some will say to give up after four calls to the same prospect, some will save five – some may even tell you to give up after the third call. None of these sayings can be tested in any meaningful way.
The simple fact is, how many times you call is entirely situational. If the prospect tells you they’re busy, it could be their way of avoiding the call…or it could be they’re actually busy. It’s also possible that the prospect is close to the tipping point, and the next call – even if it breaks the “rule” about the fourth or fifth call – could help them make up their mind.
Think about the last time you had a certain purchase in mind: it’s possible you ignored one, two, or even five ads before you finally decided to buy – but you did.
In reality, there is no “correct” number of times before giving up. You need to practice cold calling, and develop a sense of how warm or receptive the prospect is. This is what determines whether you’ll make the effort to call again; not a rule about the “correct”
number of calls to make.
This also means keeping track of your calls and taking notes. Write down reminders about the various prospects, so you know which ones are getting warmer.
Your social skills are half the reason you succeed. The other half, which the most successful cold callers possess, is the ability to gather data.
This means they test out different scripts, to check for various responses. They take note of the most common objections, and which responses to the objections are most successful (objection handling). Good cold callers even track the time, to see whic parts of the calls have the highest drop-out rate; that is, the point at which the prospect leaves.
This method also removes some of the emotional sting of rejection. To these cold callers, every call is just an opportunity to gather more data. Each call helps to refine their overall approach, and they convert more prospects along the way.
That said, it’s not impossible to be a successful cold caller based on charm and social skills alone; but you’ll find results are more consistent, and progress may be quicker, if you combine the two approaches.
Mentorship and support are vital to successful cold calling.
Cold calling can be very intimidating if you’re new to it; and many of the strategic aspects, like A-B testing of different scripts, are lost on newcomers. It’s important to find an employer that provides mentorship and support for this essential skill – it takes more than just giving you a list of numbers and telling you to “just call”.
At Exodus Capital, we provide guidance on how to incorporate cold calls as just one part of your sales strategy. Do reach out to us if you need help.
