Does Cold Calling Really Pay Off?

By Sridhar Ramanathan
Posted on September 2010 in Channel Development

One of the fond memories I have of my HP days is when very high level executives would roll up their sleeves and play “individual contributor” just to stay grounded in the business. Rich Sevcik, GM of HP’s “mini-computer” division (the HP 3000 competed against the DEC VAX and AS/400) was one such executive. I was a product manager fresh out of Wharton with new MBA, and found myself getting lots of attention as I was responsible for pricing some of the new systems. Rich would drop by my cubicle and look over my shoulders wondering how the pricing model worked and how sensitive pricing was to assumptions. Bernard Guidon, his counterpart for the HP 9000 UNIX platform was legendary for his management by walking around and lighting off fires at the individual contributor level.

I never forgot this lesson—-that great execs get their hands dirty to stay grounded in the business. With that thought, I decided this week to jump in and take on some cold calling for one of our large technology clients which has retained us for demand generation strategy and execution. Here is a snapshot of one hours’ worth of my efforts—again, I’m not a professional inside sales rep but found this exercise very helpful. By the way, I purposely called during the lunch hour to maximize my chances for catching IT managers/executives outside of their meetings:

• 50 target contacts for which we wanted to get a few completed surveys
• 8 of the 50 phone numbers and email addresses were not valid
• 17 of the 50 phone numbers where switch board operators, not decision makers
• 4 live conversations
• 3 were not interested in participating in the web survey
• 1 took 15 minutes with me to complete the 15 question web survey live; a valid prospect

So what are my initial conclusions from this?

• The list quality was quite poor; only 50% of the list had valid contact information
• Was shocked that 4 of the valid 25 contacts actually picked up the phone and would speak to me; I was beginning to think that no one answers the phone anymore.
• Pleased to get 1 of 50 contacts result in a completed web survey and the start of a qualified sales opportunity. That’s 2% (or maybe 4% if you throw out the bad contacts), far better than I would have expected from cold calling. That’s probably why telemarketing is still a vibrant industry.
• Maintaining my attitude was critical. I did “drills” by calling 5 folks then pausing, stretching, and walking around my office before taking on another batch of five. That helped shake off any lingering feelings of rejection. I found it best to think of this as a game, a sport.
• Content and approach are key; I was not pitching anything. I was simply asking permission to ask them questions about their IT infrastructure. People are surprisingly open to telling you about their shop in return for a small incentive ($25 Amazon certificate in this case)
.

I’m definitely careful not to extrapolate too much based on this one cold calling session but I must say that cold calling can be effective if it’s backed up with several critical elements – motivation, skill, training, compelling offer, “consultative” style dialog rather than “pitching” at the prospect, understanding of your target prospect’s situation and pain points, and good desktop tools. In fact, this holistic approach is the essence of our Aventi Group “Vector” methodolgy for demand generation.

Please share with us your own stories of cold calling successes, failures, and lessons learned.