Archive for July, 2011

Is Cold Calling a Bad Idea?

July 8th, 2011 by Bob Bly

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I won?t deny cold calling can work.

Yet in 99 out of 100 cases, I tell people who ask for my advice never to cold call.

The reason is that, even if the prospect on the other end of the phone expresses interest, the very fact that you cold called him puts you in a weak position ? for three reasons.

First, people by and large want to deal with vendors who are busy and successful, not those who are desperate and need the work, right?

Well, when you cold call, your prospects assume that you are not busy and you need the work.

After all, if you were busy, you would not have time to sit there calling strangers and asking them for their business, right?

Second, cold calling puts you at a disadvantage when estimating prices and quoting fees.

A large part of what determines how much you can charge is the law of supply and demand.

When the demand for what you sell outweighs your supply, it?s a seller?s market and you can name your own price.

By cold calling, you are signaling to the prospect that the demand for your services is less than the supply ? the amount of time you have available to render those services.

Therefore, prospects generated by cold calling are more price resistance ? and more likely to haggle.

Third, cold-calling puts you in a weak position as you close the sale and negotiate terms with prospects.

Again, cold-called prospects know you want and need their business.

You are perceived as being easy to hire, and therefore prospects feel they can dictate deadlines, payment schedule, work arrangement, and other terms.

Why is cold calling so ineffective?

Because it violates the ?Silver Rule of Marketing.?

The Silver Rule is a universal principle of marketing and selling, first stated to me many years ago by my friend, marketing consultant Pete Silver.

The Silver Rule of Marketing states: ?It is better for them to come to you, rather than for you to go to them? ? where ?them? is your potential clients.

You can see why the Silver Rule makes sense.

If you go to a potential customer, seek them out, ask for an audience, and plead with them to buy from you, you are seen as needy and desperate.

Your prospects think you can?t be any good at what you do.

After all, if you were good, your book of business would be filled to overflowing ? and you wouldn?t be spending your valuable time on the phone, dialing for dollars.

The only prospects who buy from needy and desperate vendors are those looking for the low-priced bid.

So cold-calling risks dooming you to being the low-priced provider.

When ?they? ? prospects ? call you, instead of you calling them, the dynamic reverses.

They call because they have a need or problem ? and because they are hoping you might be able to give them what they need or solve their problem.

But how do you get prospects to call you?

There are two methods. The first is good, and the second is better.

The first method is to generate inquiries through traditional marketing.

This includes Yellow Pages advertising ? magazine ads ? TV commercials ? direct mail ? radio spots ? billboards.

When someone calls in response to your ad in their industry trade magazine, you know they have either an immediate need — or at least have some interest in what you are offering.

Otherwise, they would not have called you.

However, all they know about you is what they read in your advertisement.

Therefore, they may not be convinced that you are the right one to hire.

The second method of getting people to call you eliminates this problem.

This method is to establish yourself as a recognized expert or authority in your field.

You can do this through such activities as: writing articles or a column for your industry trade publication ? being interviewed as a guest on radio talk shows ? writing a book (e.g., Tom Peters writes books on management) ? giving speeches as industry meetings ? writing a blog ? distributing a podcast ? publishing an informative print or online newsletter on your specialty ? writing a white paper or special report.

When people call you because they read your book, they ? like prospects who respond to your ad ? are telling you that they have a definite or possible need.

However, the people who call after reading your book ? unlike those who merely saw your ad ? are already predisposed to buy from you.

After all, your prospects are skeptical of advertising claims.

But authors are perceived as experts.

You?ve heard the phrase, ?We wrote the book on it.?

When you are the one who wrote the book (or the article or column or content-rich Web site) on the topic your prospects are interested in, you will be the one they call first when they need help solving problems in that area.

Action step: Think about how you can establish your reputation as a leading expert in your field or industry. Can you volunteer to be a speaker at the next big industry conference? Publish a white paper on your area of expertise? Write letters to the editor? Start a blog?

Best place to start: write an article about the solution to a big problem your prospects have and publish it in a magazine, periodical, or on a Web site where they are likely to see it.

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