Cold calling is dead…sort of. This week on the S.O.B. (Small Owned Business) Marketing podcast, Vivian and I are discussing cold calling, specifically its relevance in modern marketing strategies.
We define cold calling, analyze its effectiveness, and emphasize the importance of strategic approaches to cold calling.
Marketing HOT TAKE: No one actually answers phone calls anymore. Disagree? Let us know in the comments!
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Chapters:
00:00 Introduction (Please Leave us a Review)
04:00 Defining Cold Calling
07:16 The Effectiveness of Cold Calling
11:57 Opportunity Cost in Marketing
28:03 TLDL; Is Cold Calling Still An Effective Marketing Strategy?
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Chelsea: Hey everyone and welcome to the S.O.B. Marketing podcast. Where we celebrate to S.O.B. you are, and if you haven't figured it out yet - we mean Small Owned Business, we don't mean S.O.B...
Vivian: Listen, we know that as a small business owner you are working hard on the daily to keep your business fully operational while trying to promote it. And while some days it may feel like the business is owning you, if we're being honest with each other I bet you would admit that you wouldn't give up the insanity for anything.
Chelsea: Our commitment here at the S.O.B. Marketing podcast is to give you the real talk, what works when it comes to advertising, marketing, and promoting your business. And then what doesn't really work.
Vivian: And Chelsea and I promise to always keep the conversation real.
*Beginning of Episode*
Vivian: Ring ring, pick up the phone, Chelsea. Guess what we're talking about today.
Chelsea: Straight to voicemail. What are we talking about today?
Vivian: You rejected my call.
Chelsea: I did. I rejected your call.
Vivian: We are talking about cold calling. If you just had a visceral reaction to this, this is a really great conversation for you because we want to be able to have grown up marketing discussions around here, even about topics that make us feel uncomfortable or topics that we're not a fan of. So we don't want to diminish any one particular marketing initiative just because it might get a bad rap.
Chelsea: I kind of want to diminish it, but sure, okay.
Vivian: You want to denounce cold calling?
Chelsea: I do. I really do. But that's not the take that we have today. Well, really what we're talking about, Vivian, is, is cold calling dead? Yeah. Is it dead? Are we done with, cold calling?
Vivian: I'm curious to know how many of you out there listening utilize cold calling. All right. So drop it in the comments. Tell us if you still use cold calling and it works for you. Let us know if it doesn't work for you. Let us know if you hate it. If you ever had a job cold calling and you absolutely hated it. Let us know.
Chelsea: I'd love to hear about that. Seriously, drop that in the comments. But yeah, so we're talking about cold calling. We're going to talk about what it is and is it still an effective marketing strategy and should small businesses consider it? Awesome.
A friendly reminder though, we do have a TLDL section.
Vivian: Too long didn't listen.
Chelsea: Ooh, yes. So it's a chapter at the end of this episode. So you can skip ahead if you don't have time to listen to this entire conversation right now. We just ask that when you get the chance, you go back and listen to the entire conversation. This one's going to be a fun one.
Vivian: I love it. I'm glad you think so. So I know if I know my baby sister well enough, I know you have a marketing hot take on those.
Chelsea: I sure do, Vivian. My marketing hot take.
Vivian: I like that that one was long.
Chelsea: It's always long at the end. That's the style. Okay. Marketing hot take. Who answers the phone anymore?
Vivian: True.
Chelsea: Do you answer phone calls?
Vivian: I do if it's from a number I recognize. To be fair, I get a lot of spam calls. Now my phone actually has that thing where it will convert the voicemail into a text. So I can actually read the voicemail before I respond back to it or decide to call somebody back.
Chelsea: I love that. See, I'm not answering the phone. If I don't have your number. Listen right now when I say if you have gotten my number somehow, I'm not answering your phone call unless I recognize the number, unless I have it saved. If it's an important phone call, you will leave me a voicemail. I'll listen to the voicemail and that will decide whether or not I call you back, okay?
Vivian: Agree. All right, so in keeping with the times then, that kind of leads us into our discussion. Can we first start with the very basic, what is cold calling? What exactly are we talking about when we say cold calling?
Chelsea: Yes, I'm glad we're bringing this up because, Vivian, cold calling does not have to just be phone calls. Cold calling-
Vivian: She's updated the definition for the times.
Chelsea: Absolutely. So cold calling is when a business reaches out to potential leads that they have not shown any interest. So the lead itself has not shown any interest to the business. That's why it's cold.
Vivian: Yes. So there has been no prior interaction and the basis of it is to make a sale.
Chelsea: Yes. To pitch a product or a service. It's to make a sale. It's to convert. It doesn't have to just be phone calls. It can be a phone call. It can be a text. It can be an email. I don't know if anyone else is getting colds texts, but I get them all day long for roof repair. My roof is fine. It was recently repaired by Tim. So even if I needed my roof repaired...
Vivian: You would not be the decision maker.
Chelsea: I would not be the decision maker. I can tell you right now, Tim is not going to pay someone to fix the roof when he can do it himself.
Vivian: So this is an interesting part. If you're wondering how this works and if you're like, why in the world am I getting spam? Most of you probably know this, but what typically ends up happening is let's say that you are buying something, you're downloading some type of worksheet, somehow you end up inputting either your email address or your phone number into a database, which then the company turns around and sells. Now, they are required by law to tell you if they are doing this. But it's usually in the very fine print and we all know we're not the best consumers. Sometimes we just want the thing we want and so we just input our data anywhere and kind of gloss over the fine print. But that's how your information ends up getting put in these databases.
So then what ends up happening is this company or business then goes out and purchases this database, this list for a price. I can tell you this sometimes in healthcare, the way I relate this to healthcare is there's big business in going out and recruiting doctors. Sometimes I will get these random emails that say, hey, are you looking for a list of GI specialists in the United States? For a price, you can buy one. Ideally if my job was to go out and I got compensated for recruiting certain type of doctors, maybe that would be appealing to me. Then that would be a cold call. I would take this list with their contact info and either through emailing them or calling them, that is the first interaction I would have with them.
Chelsea: Yes, I have a funny example of cold calling that's not...I don't know if we'd classify this as cold calling. I would classify it as cold calling, but maybe there's something specific.
Our dad told me this story and I'll explain at the end why he told me this story, but they were at a coffee shop. He was sitting at a table apart from my mother at the moment. Then he decides to come sit next to my mother.
Vivian: Which this is very normal for them because mom gets very engrossed in books and dad is usually working on the laptop on something. So dad needs a table. Mom could sit on a cushy couch.
Chelsea: Yes, exactly. Then once he's done, he comes, sits on the couch with her. So that's what happened. He was coming to sit on the couch with her and she was talking to this young lady. The young lady turns to dad and says, your wife told me that she hasn't been on a vacation in two years.
Vivian: Guess what business she was in.
Chelsea: She was a travel agent. So now she's pitching her services to my father.
Now, the reason my father told me this story is because he said, and this hurt my feelings, dad, if you're listening, I'm very offended. He said, yeah, that's something you would do.
Vivian: That you would go...
Chelsea: I would just cold call. That I would just randomly pitch my services to all these people, try to start a conversation with them so I can pitch myself.
Vivian: Yeah. Here's the thing, though, the marketing discussion that I love is, set aside your feelings about that. Is it effective? Could it be, okay? What she was doing was cold calling as it relates to the definition we said, which was what again, Chelsea?
Chelsea: It's when a business is reaching out to potential leads that the leads have not interacted with the business in any way.
Vivian: Right. So she had never interacted with mom. She cozies up to mom. Gets her talking, ask her about vacation, comes to find out dad hasn't taken her on a vacation in two years. Shame on you daddy. Then when dad comes over, she's like, by the way, right? If you happen to need to take this nice lady on a vacation, because you haven't taken her on one in two years, I'm your gal. Let me introduce you to what I do, my specialty. So I think that's the thing is, regardless of whether you like it or not or how you feel on the other end of it. That's completely separate from whether it actually works. What is the metric we talk about or we associate with it working, Chelsea? How do we gauge that?
Chelsea: Yeah. So that's going to be your conversion rate. Okay. So that's going to be the time that you've invested, the people that you're reaching out to, how many of them ended up purchasing a product, purchasing a service. A good conversion rate for cold calling is going to be 4% to 6%. Okay. Now here's the problem though. The average cold call rate, conversion rate is only 1% to 3%.
Vivian: Yeah, it's very low.
Chelsea: It's very low.
Vivian: That's the thing that I-
Chelsea: Real quick, it often requires 8+ attempts before converting.
Vivian: Yeah. Okay. So let's go back to those 8+ attempts. We know marketing initiative wise, we tell you guys that now because there are so many ads and so much content, so much information out there, people are being bombarded in their daily lives with just a lot of information. We always say to you, don't be discouraged if it's taking your marketing initiatives a little longer. That's also why we recommend that you do a couple different marketing initiatives at once. Right?
Chelsea: That's also why you should have an omni-channel marketing strategy.
Vivian: So that way you can, someone could be exposed to your business or your service or what you do, your ad online. Let's say they see a billboard and then let's say they see, because you do some good PR, they see an article about you in the local magazine.
Chelsea: Then you guys show up at the same coffee shop.
Vivian: You show up at the same coffee shop. But that's why it's those 7 to 8 touch points that it's now taking people. That doesn't sound abnormal to me. Okay. Cold calling, 7 to 8 interactions.
Chelsea: Here's my question. Not question for you, but overall, the issue that I have with this statistic is, is it 8+ cold calling attempts?
Vivian: Probably.
Chelsea: Or is it 8+ touch points?
Vivian: It's probably cold calling attempts.
Chelsea: Cold calling attempts. I feel like that's a lot. I feel like if you have a good, like I just said, and go listen to this episode, that episode, if you haven't watched it, but Omni Channel Marketing Strategy, if you have a good one, then it shouldn't take you that many.
Vivian: Yes. It's also, let's talk about the heavy lifting involved with cold calling. It takes, it takes, okay. So mom and dad were at that coffee shop. They like going to the coffee shop for a couple of hours. Let's say this woman talked to mom for at least 40 minutes, cause you know, that's what it was if she got mom to start talking about vacations and you know, mom opening up and saying like, yeah, we haven't been on one in a while. Also, the lady, if she's done this enough, she's also very strategic in the sense that she knows it takes a while to warm somebody up to ask all the right questions. So then she could give the pitch. She's not going to come in there and just like give the pitch and be like, hey, you look like someone that needs a vacation. This is what I do. She's going to ask these strategic questions to get more ammo. I don't mean that in a bad way, but to get more information. So then she could tee up her sales pitch. Cause that's what a good salesperson does. That's when cold calling works best, is when you can then turn that conversation into something compelling enough that you could close the deal or that that person will exchange information with you and that then you can cold call them again. Two months from now, she could easily call dad up and say, hey, by the way-
Chelsea: I mean, she can't.
Vivian: Dad keeps his information private.
Chelsea: Also dad was probably like, I have two daughters that plans all my vacations.
Vivian: Well, one daughter, Chelsea's his travel agent.
Chelsea: If we're going to be honest, I was trying to pitch you right here, but yes, let's be honest. I'm the one who plans all of our vacations.
Vivian: That's right.
Chelsea: I've been slacking for two years.
Vivian: Potentially she could then if she was able to get his phone number, she could then two months from now call and say, hey, by the way, do you remember I met you and your wife at the coffee shop? You guys were wanting to go on a vacation, but you hadn't in a while. I actually have a really great deal right now on a trip to Greece. I have a great deal. This is what it would cost, blah, blah, blah. If he says no, then great. She still keeps his information and then can call him again in another two months. But so that's probably where the 8 touch points come in for the cold calling.
What I will say is, I actually, believe it or not, you guys, I've been doing this marketing thing long enough that I've done various roles and jobs. One of the jobs I had was actually as a radio salesperson for our local Hispanic radio station, El Sol. At the time I was in my twenties, cold calling was a big part of it. It was one of the things that was kind of uncomfortable for me. I had to learn how to do it well. I have the same beef with it that you do, which is it's not as effective. As compared to what?
Chelsea: As compared to other marketing strategies.
Vivian: Yes, and so why is that though?
Chelsea: The problem is that you're not getting good leads. If you're buying lists, which also I have beef with buying lists.
Vivian: Yeah.
Chelsea: Everyone on that list is going to be pissed off that you got their information.
Vivian: That's right.
Chelsea: But it's not a quality lead because you don't know who would be interested in what you're trying to offer. The people who are texting me about roofing. They don't know that I'm the wrong person to reach out to because I have multiple men in my life who would fix the roof before I'd hire a company.
Vivian: I like how you said that. I have multiple men in my life that would fix my roof.
Chelsea: Well, I'm just saying they're from not multiple people because they're all men but like I have like Tim, Tim's dad, Alex, our dad. Yeah, I have all these people who would fix the roof before they'd let me pay someone to fix the roof.
Vivian: Yes, true.
Chelsea: But they don't know that, they have no way of knowing that because they just bought my information.
Vivian: Now cold calling I do think if you've done it or if you're good at it, potentially what you do is you start to develop this profile in your head of what makes a good candidate for a cold call and so that way you're minimizing these other leads that just aren't going to pan out. So the reason I say that, perhaps this lady has figured out if I go to the coffee shop on a random Wednesday in the afternoon and I look around and I'm going to do some very quick discerning, which is anyone over the age of 60 who A, likely has disposable income, B, is likely retired and C, will let me chit chat with them because they're not busy. They're not working, logged in.
Chelsea: Also she probably went this young, young lady, hey mom. Love you. This woman is sitting here at a coffee shop on a Monday afternoon just reading a book. So she's obviously retired. She's obviously enjoying her life. She has the time to go on a vacation.
Vivian: Yes. I think that's the thing, and she also knows that usually if you're in retirement, you more than likely have maybe hopefully some disposable income that you're able to set aside for trips. What I'm saying is, through her experience over time, she has probably gotten really good about assessing which person would be a good approach for her. Which person she has a higher probability of selling to. We all do this in some sort of way or fashion. I think that that's why cold calling by itself isn't necessarily bad. So we're saying if it's something you have to do for your business, do it. What we want you to do is do it strategically, right? Start to put these profiles and these clues together.
It used to be that in healthcare, we would tell people, we are largely focused on selling or on gearing our ads towards women, mothers, because they are usually the healthcare decision makers in the family. Usually the dads were not the ones coordinating the appointments and doing all that, running around with the kids, getting them to the pediatrician, all that. It was usually the moms doing it. If you feel some type of way about it, take it up with society because all we're doing as marketers is we have to be very good analysts of behaviors and also of people. The more you take interest in your target audience, in learning their behaviors, their patterns, the stuff that they're likely to do if you know their motives. That is going to help you with all of this. It's going to make your cold calling more successful. Now, do we think, there are other things? Chelsea told you earlier, there are probably other things you could be doing way more successfully and with less time.
Chelsea: Absolutely. That's, Vivian, we briefly talked about this earlier, not on any podcast or anything, we were just chit chatting, but you mentioned opportunity cost. That's something that I want to have you guys think about. Opportunity cost is, okay, I decide to cold call. That's taking time away. That's taking money away. What could I be doing instead with that time and money? Those opportunities that you're missing out on, they cost you something too. So if you're going to do cold calling, that's great. If you want to do cold calling, that's fine. But is it the best marketing initiative for your business at the moment?
Vivian: So let's take for example, the young lady who was selling, and also no shade to her. Listen, she may have just been sitting there for coffee and was like, let me pitch this because I'm here and I'm enjoying my coffee.
Chelsea: Also, can I just say, dad, I know that I said I was offended. I'm not actually offended because I do feel like this is something, if that was my job I would do that.
Vivian: Yes. If your livelihood depended on it.
Let's say, for example, let's assume this is a cold calling strategy of hers. That she goes to coffee shops and she sits down and she looks for people that she thinks may be interested in hearing about travel. Could she, let's say that takes four hours out of her day. Instead, could she potentially reach out to Dell Web, a senior community in the area that is for 65+ and they have, because in order to live in this community, there's a median household price. So therefore I know that if you're paying for a house in this price range, you likely do have disposable income. You're not hurting for money. Could I potentially reach out to Dell Web and say-
Chelsea: Can I just say, I want to live in Dell Web. It's nice.
Vivian: It's a nice community. Could I reach out to Dell Web and to their event coordinator and say, hi, I'm a travel agent. I would love to be able to participate in some of the events that you have for the residents. When is your next event that I may have an opportunity? They say, by the way, wonderful. You reached us in time. We actually have a spring event that we're doing and you can participate for $100. What that includes is we're going to supply you the table, the chair, you come out, set up your table. People come through here and you're able to talk to them one-on-one. I say fabulous, about how many people do you have that come out to this event? She says 50% of our residents come out. It's a really big event. Awesome. Sign me up. I'll pay the hundred dollars because at that point, what I've done is at the top of my funnel, I already know that the people that are going to be there, they're going to more than likely be within my price range. Now it's just a matter of how do I want to set up my table? How do I want to display my stuff? Could I maybe have something interactive? Maybe I set up a screen that has photos that show all of the fun places that I've sent people to before. All of that, maybe it has cruise pictures in there.
Maybe I have a little spin the wheel thing where they can, I don't know, get a voucher for something. But at that point, what I've done is I don't have to sit there and invest 40 minutes in a conversation. I very quickly can now get a ton of people coming through, get exposure, and just make my conversations very concise with them.
I could even have something where if I do a raffle, a really cool raffle, I have them put their email address on there or their phone number. At the bottom, I always include the disclaimer. If you're leaving me your contact information, it means that you're approving. You're consenting to receiving marketing materials for me or consenting to me calling you or emailing you. Once they do that and you have that information, now you have another touch point number two.
Right? Hi, so and so you entered my raffle. I wanted to get a little more of a complete view of the places you might be interested in traveling to. It moves that conversation along.
Chelsea: I really hope this young lady is listening to this episode. We just gave her a whole plan.
Vivian: There you go. Well, it's one marketing thing, marketing initiative you can do that might be, like you said, opportunity cost is real. Just remember, anytime you're making a decision on behalf of your business. If you decide to do cold calling, fabulous, just know that it means you are taking away from another opportunity that you could be doing. If that other opportunity means you spend less money, less time, and you get more results, why wouldn't you want to do that?
Chelsea: Exactly. My last thing that I want to say, because this conversation, the question we're trying to answer, Vivian is, is cold calling dead? No, cold calling is not dead. Bad cold calling is dead.
Vivian: Yes. So you could do good cold calling.
Chelsea: Yes. You can do effective cold calling and that'll work. Bad cold calling, not going to work anymore. Sending someone a text that says, Hey, this is so and so company. We fix roofs. Are you interested? That's not going to work. It doesn't matter how many leads you have, if they're not good leads.
Vivian: Yeah, so envision this. I live on a street.
Chelsea: You live on a street?
Vivian: I live on a street. Can you believe that? I live on a street and let's say we have 10 houses on this street. Somehow you-
Chelsea: Everyone triangulate Vivian.
Vivian: Yes, right now. Triangulate my exact location.
Chelsea: There's a street and there's 10 houses on it. Let's find it.
Vivian: All right. So if you somehow acquire the phone numbers for all 10 of these households and you just send them a random text like Chelsea said that says, hey, I can fix your roof. You don't have any of the data points. You don't know how many roofs on this street look bad. You don't know if these streets, first of all, or if these households are all rented out, meaning you're not even texting the person that actually is the decision maker. If I'm a renter, I'm not fixing my roof. The landlord is. So you just don't have the data points. What we want to encourage you, like Chelsea said, that's bad, ineffective, cold calling.
Chelsea: Yes. I just want to say, it's a great way to piss people off. It can hurt your brand reputation if you're doing bad, ineffective cold calling.
Vivian: So the good cold calling is going to give you more data points. So then you're at least getting in front of people that actually need it. What would be way more effective is, I'm not telling you guys to do this. If I actually drove down the road and could tell, that house, they need to replace their shingles, right? That house probably has about like two more years. This one, my goodness, it looks like if they get rain, they're going to have a problem. That would be more effective than, let me just try to text all these people.
Chelsea: Yes. Okay. Vivian, was that our conversation?
Vivian: That was our conversation. Do you want to give us the TLDL?
Chelsea: I absolutely can give us the TLDL. This is the TLBL section, Too Long Didn't Listen. If you skipped ahead, wonderful. I'm going to give you a brief summary of what we talked about today. However, when you have the time, go back and listen to this entire conversation because today we officially pronounced cold calling as still alive. Yeah.
Vivian: It's still kicking.
Chelsea: It's still kicking. It still works as long as you're doing it effectively.
What is cold calling? You know, it's more than just phone calls. Now it's texts or emails, stuff like that. But really at the core of it, cold calling, when it's effective, is about finding good leads and reaching out to them, focusing on relevance versus volume. Because when you do bad cold calling, it can hurt your brand reputation.
I mean, really, y'all, that's the core of this conversation, was good cold calling still works, bad cold calling, you're wasting your time.
Before we leave you, I just want to say, do you have a conversation that you want Vivian and I to talk about? Let us know. Send us a voice note. Make sure you're subscribed and following.
Vivian: Please leave us a review. We really want those reviews, you guys.
Chelsea: We do.
Vivian: I don't want a one-star review, but I mean, listen.
Chelsea: No, no, no, no, no, no. Whoa, whoa, whoa. We're only accepting five stars.
Vivian: If you leave us a review that helps this podcast to get in front of other small business owners and hey, what are we doing if we're not just helping the small business community? We want everybody to thrive. We want these small businesses to continue to flourish. That's one way you guys can help us in that mission.
Chelsea: Absolutely, and go be the best SOB you can be.