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Is Cold-Calling Really Dead?


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Is Cold-Calling Really Dead?
(Excerpted with permission from Business Week. To read the entire article, click here.)

A new survey of 700-plus leaders of service firms had some surprising results about generating sales leads

by Karen E. Klein

How do successful companies generate sales leads? How important is branding when it comes to getting new business? Is cold-calling really dead? Mike Schultz, principal of the Wellesley Hills Group in Framingham, Mass., posed these questions and more to readers of his marketing and sales Web site, blog, and newsletter.

The responses he received from more than 700 professional-service leaders compose a new report, What's Working in Lead Generation(a free summary is available at his Web site, www.raintoday.com). Smart Answers columnist Karen E. Klein spoke to Schultz recently about what he discovered through the survey. Edited excerpts of thier conversation follow.

We asked these CEOs and VPs of marketing and sales whether their firm was "very well known" to their target audience, or "not very well known." The majority--70%--said they weren't very well known, while only 30% said they were very well known.

The bigger and better your reputation in your industry, the better your lead-generation efforts will work. And this held true, in the survey results, no matter the size of the company. This was equally true for large and for small firms.

More than half, 51%, of those firms knew the actual names of decision-makers at their target. But that figure dropped to 13% for companies that rated themselves poorly when it comes to generating sales leads.

We've heard a lot of experts recently declare that the practice of cold-calling is dead. Your survey seems to contradict that.

That's right, because cold-calling works, if it's done right.

That means that, after referrals, doing direct marketing over the phone is the second-best method for generating new business.

But referrals are simply not sufficient these days to grow your business. If you sit around waiting for your telephone to ring with new business inquiries, your company is going to tread water and eventually shrink. You have to actively go out and recruit new business if you want to succeed.

And there's a way to do it that isn't cheesy, doesn't rely on a long, boring script, and doesn't demand money up front.

Another bit of advice you gleaned from the survey respondents is to nurture the leads you generate. What does that mean?

You still can't expect to go straight from telephone call or direct-mail piece to new business. Instead of making a leap of faith, you want them to take your hand and make a series of small steps.

If your sales staff concentrates all its efforts on "sales-ready" leads, and drops the other leads it has generated, it will lose up to two-thirds of its potential new clients. Our survey results showed that of all the new leads companies generated, only about 25% were sales-ready, while 50% needed further nurturing, and the final 25% were disqualified.

Also, there's not much you can do to speed up their buying cycle, but if you have an ongoing lead-nurturing program that involves staying in touch with them over six months or a year, they will remember you at that elusive "time of need" when they clear their whiteboards and pick their next company goal.