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Monday October 29th, 2007
The ONLY Reason for Cold Calls in Direct Sales*
Student: The purpose for a cold call is to get an appointment.
Teacher: And that is it. The end of the story.
I don’t agree. I agree with this fellow…
“… I’m going to turn your world upside down a little bit.
“While this may sound a bit strange, the primary objective of cold call [sic] is not to get their business, but instead to determine if you and that prospect are actually a good fit. Now, think for a moment how this change in your attitude will actually affect your behaviour and how you approach cold calling.”
What do you think?
* Telesales being a special case not covered here. There direct needs analysis and later closing are the core objectives.
By Christoph Dollis at
10:25 AM on Monday October 29th, 2007,
and filed under Sales Theory, Videos by Others.
Permanent URL to this post:
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You can leave your opinion(s) below.
1:50 PM on Fri. Feb 15th, ’08
Let’s say you have a bunch of folks doing cold calling with the expectation that all they are doing is qualifying. How do you measure they’re results? If they’re not being measured by conversions to appointments (or sales), then are you measuring the number of stuff they move into the qualified or unqualified column? How do you know if someone is effectively qualifying in that case and not just tossing junk into the qualified column or unqualifying perfectly good customers?
If you had folks that were just qualifiers, how would you compensate them based on results?
2:08 PM on Fri. Feb 15th, ’08
Your question made me think.
I’m more talking about a salesperson who manages his sales cycle from first contact to customer service after the sale… and therefore is judged by the numbers he or she brings in. This salesperson has a strong incentive to maximize the effectiveness of their cold calls and not spin their wheels talking to people who aren’t qualified or willing to consider making the improvements that you have to offer/sell.
So for them, setting up an appointment may feel good, yet if it’s with someone who they don’t think would benefit from their offer, then it’s pointless.
In the case of hiring a group of people to do prospecting calls for salespeople who complete the latter stages of the process, developing a compensation plan is always going to be a challenge regardless of whether their goal is appointment quality or quantity.
I remember one job I had as a telephone prospector for a residential and business security systems company. Our compensation plan was hourly plus a bonus not per appointment, but per sale. And the more sales made by the outside salespeople in a given month, the higher the bonus paid per transaction.
This made me focus on booking quality appointments and setting the appointment up in such a way that the prospect was positively disposed to making a decision when the salesperson gave the presentation… instead of just “thinking about it.”
It worked very well for me and seemed to work well for the company.
2:19 PM on Fri. Feb 15th, ’08
Good response. I’m thinking of an organization that has a hierarchy of sales folks that focus on each part’s strengths.
Qualifiers: Prospecting a cold list to filter likely candidates for sales meetings. Compensated hourly and based on final total sales figures multiplied by a percentage factor of successful appointments (to prevent them throwing everything to the Appointment setters)
Appointment setters: Call qualified leads and set appointments. Compensated based on final total sales figures multiplied by a percentage factor of successful closes.
Closers: Go to/on appointments and make the sale. Compensated based on the percentage that they personally close.
In some companies, the qualifier, appointment setter, and closer might all be the same person. But in my opinion and experience these are very different skills. Some may be good qualifiers while others good closers and some good at getting the appointment, but these might not all be the same person.
One can also leverage economies of scale here. A small number of people can qualify a very large pool. A small number of appointment setters can work off a well-regulated qualified lead list. A small number of sales people can work off a well-regulated number of appointments. And all compensated based on results.
Just a thought. Keep up the good work!
3:01 PM on Fri. Feb 15th, ’08
Rex, the model you’re using has worked before. I’m curious:
3:07 PM on Fri. Feb 15th, ’08
Thanks for the kudos! It’s somewhat theory, but based on my experience selling high-priced Enterprise Software (like CRM systems, etc.) where the price point is around a few hundred thousand $$ and paid for over time. The idea is to maintain an ongoing relationship with the client as well. There would have to be a significant customer service component as well.
2:27 PM on Fri. Apr 4th, ’08
I have a quick question. What industry are you discussing that has people who call to qualify leads but don’t book appointments with those they qualify? I’ve been in sales for more than 15 years (I started young lol) and I have never seen that model.
Seems to me that if you are calling a prospect and you build enough of a rapport that you can get the qualifying information from them, then it is a risk to then have an additional representative call them back again to close on an appointment who may then send yet another representative to actually meet for a sales call.
More than price, quality or any other consideration, consumers of every industry really want one thing (even if only subconsciously)- make their lives easier. Being contacted by three company reps before even having the option to say “yes” isn’t a simplification of the prospect’s life.
Just my own thoughts.
L