Does Cold Calling Work?

Does Cold Calling Work?

How do you generate inbound leads and sales? My company, Indaba Global, is a training and development company that works with everything from small businesses up to Fortune 500 clients, and we have identified a trend among clients we coach.

Companies are focusing on the wrong resources and overpaying for outdated sales and marketing techniques. 

We have a number of clients that have all been asking, “How do I keep up with paying for internet ads and organic SEO results, how come my sales are not improving?” Our clients have a couple things in common: they were on the top page of Google organically last year, and their sales numbers were about the same this year as last year; the only difference was the climbing cost of advertising to stay on top of Google.

The response we have been hearing from them is “we cannot afford to pay Google to stay there”. The market has caught on and we now pay a lot more for Search Engine Optimization (SEO) and internet marketing/advertising than we did last year.

When you peel back the onion on these clients, I noticed a couple things that they all did. Not only were they paying for inbound leads via full-time employees working on SEO and spending money on paid Google ads, they are spending tons of money on outbound calls. These companies like many others, pay fistfuls of money to train a lot of people on cold calling, telemarketing, whatever you want to call it. They have “sales” people smiling and dialing, making hundreds of calls a day.

Before we jump down the rabbit hole, outbound sales call’s can work. They drum up business and have been proven as a quality method of generating business in the past. Please note, I am not arguing that they do not. I have a number of friends and former co-workers that hunt all day and are fantastic at it. You probably know some too. However, they are a dying breed and times are changing! What I am saying is there are more useful ways to spend your time.

When looking into our client’s issues and seeing the data, I instantly thought – Why are they paying so much for telemarketing and outbound calls? 

When is the last time you made a purchasing decision by talking to a complete stranger calling you? Now let’s think about the last time you made a purchasing decision after researching it online. I can only speak for myself, but I can’t remember making a purchase from a stranger who contacted me via phone, while I regularly make purchases online. I personally am more annoyed with a company that contacts me persistently on the phone, so the money spent on the cold call guy, is not only not closing a sale, it is turning me off from buying from them. On the flip side, I purchase things online all the time or I use the internet to research what I am going to buy. After conducting my research I will call if I have questions (inbound).

All Hail Online Sales.

Looking at market trends, there is a reason former “retail giant” like Sports Authority and Macy’s have recently announced they will begin closing a large number of stores. People do not need 5 stores within a 10-mile radius to buy retail.  Retail consumers make purchases online, and if they do shop in-person it’s most likely to try something on or talk to someone they know who can get them a discount.

What I take away from this growing trend in retail is: consumers are smarter.

This is for any industry, not just specific to retailers. Consumers now have the internet to look things up and no longer need to be educated on a company, person, or product via a phone call. The consumer expects a company to have a digital identity and can access this info at the tips of their fingers using the internet. Consumers these days can research a company, a product or service, and even individual employee via social media if they want. In my opinion, as a consumer, when I cannot find a company, product, or person, I lose a little bit of trust in them if it’s difficult. Maybe not necessarily when I am trying to find a person, but if I cannot find the company or program being pitched my reaction is the company is small or hiding something.

Why are companies still using the phone for outbound marketing?

Think about it, cold calling and telephone sales was a businesses’ sole life-line for the last couple decades. It provided a person to reach-out, solve problems, and generate relationships for the company. Many people who had success using the phone in the past are now at the tops of companies and insist this still should be done, despite evidence showing otherwise.

Research indicates that cold calling and outbound calls are not working:

William Stewart writes: The Corporate Executive Board found that B2B buyers are 57% of the way to a buying decision before they are willing to talk to a salesperson. Perhaps even worse for B2B telemarketers, a 2012 survey by DemandGen Report found that 77% of B2B buyers said they did not want to talk to a salesperson until after they had performed independent research. Prospects can effectively ask the internet questions via their social networks and search engines, and its killing B2B telemarketing. Whenever they have a question or a problem, the internet is available at a B2B buyer’s beck and call to help them find a solution.

Baylor University’s Keller Center Research reported the following statistic’s on cold calling:

50 agents made 6,264 calls. The study revealed it took 330 calls to secure one appointment and 209 calls to yield one appointment/referral. Read the full report.

Which leaves the question are you willing to make 200-300 calls before securing an appointment or referral? How long does it take you to make this many calls? How much are you paying an employee to make this many calls?

What needs to happen?

Companies need to stop spending money on cold calls and outbound telephone sales. Use the money you spend on this service and focus on what matters. After looking at the numbers, our clients found they were overpaying. Once they realized this, they had two options: find a cheaper alternative (call center) or eliminate this process.

The data shows that our client’s inbound marketing and advertising campaigns yielded better results. There is a reason that it costs more to get your info on Google’s top pages. It works. People are looking to buy and they do so online. My advice is to examine and optimize your sales process. This may mean you need to cut the dead weight that telemarketing has become.

Optimizing Sales Process

So what happens to clients like ours who are on the top page of Google, who have accepted the fact that they are overspending on these old techniques such as outbound sales calls. Where should they be spending their money?

Below you will see what your company should do to optimize their sales process:

  • Understand who your customers are.
  • Make sure your customers can find you easily.
  • Provide a clear message.
  • Demonstrate value.

We found that our client’s numbers showed they were great with customers could easily find them. They showed up in the right spots on Google, but were they doing so efficiently? Also, how did they address the other steps?

These were conversations we had to have with them. My advice to them was to analyze these steps and figure out a way to improve. I have outlined the ways a company can improve each of the following steps.

Step 1

Set a strategic plan. Make sure the company/department has a vision and a clear understanding of the target market you are after.

Step 2

Find ways to advertise and market so that customers in your target market can find you. Spending money to optimize your online presence works. It doesn’t matter if you have the best product or service if no one knows about it. Analyze the resources you use. There are many shiny objects that can distract you while creating an online presence. I would suggest researching options on how you can do so.

Step 3

Take a look at your customer’s experience. What is your company’s story? How clear is it? Talk to your customers and your target market and listen to what they are asking for, then deliver. Your ads need to link to landing pages that continue the story that your company started to tell in the ad. If I am searching”best bikes” on Google and click your ad, the first page I land on better has bikes on it. Don’t just send customers to your home page and expect them to search through hundreds of pages to find what they are looking for.

Step 4

If you identify your customer, make yourself visible to them, and they can easily understand what you offer, the last part is making sure to demonstrate value. If your offering to the customer is outrageous they will not buy. Look at your industry for market indicators and keep a pulse on this, it is important and will directly impact your bottom line. You do not want to be the guy selling Jordan shoes (high priced) for pennies, nor do you want to be the guy selling a Prius as a Mercedes Benz.


At Indaba, our customers are business professionals, coaches, and professors. Our company, provides one on one and group coaching, both in-person and via webinar. We own all of our coaching materials and supply them to others. Our materials include a library of eLearning courses and behavior assessments that can be used for executive, sales, and life coaching. One change we made in 2010, was to create a new version of DISC Assessments. Many of our customers often completed a DISC behavior assessment and asked: “Now What?”. With the creation of DISCflex, our customers are able to answer that question.

When it came to sales resources our strategy was to engage prospects over the phone and in-person at events. While we had success in generating new business from both, we realized we needed to listen to the feedback from our customers and that was to spend less time on the phone and more time on creating an online presence as our customers stopped answering their phones and started googling information. By building a new website we were able to get the ball rolling. We then went to our website to make sure our offerings to our customers were easy to find and relevant. We have a webpage designed for coaches who are looking for coaching supplies, we have a page marked specifically for businesses needing executive coaching, and we have a page designed for professors who are looking to use our DISC materials in the classroom.

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