A reasonably complete guide to cold calling

by | July 9, 2019

Cold calling.

Few phrases strike as much terror into the hearts of entrepreneurs as that one. Inherently, we all know that it’s a great way to move the needle, but holy shit, cold calling is scary.

I’m here to tell you that you can do it. And I’ll show you exactly how I have built successful cold calling campaigns that have moved the needle on my own businesses.

However, before you think that I’m a superhuman sales god with natural interpersonal and communications skills, I’m going to let you in on a story from my past. When I was 5 years old, I had a speech impediment so severe my speech was close to incomprehensible. I stammered well into high school and inherited a set of wonderful nicknames including “retard” and my personal favourite, “retarded little baby”. The first time I tried to cold call was fucking terrifying. I hadn’t stammered in nearly a decade, but all the old fears and self doubt came back. The first few days that I did it, I was so nervous that I would vomit before I started and about every hour after.

Normal people have coffee breaks. I had vomit breaks to such an extent that I wondered if I was physically capable of starting a business. But, despite my obvious lack of comfort, that early campaign created sales. Since then, I’ve always been able to tap into the cold calling method when I need revenue.

Before I start to explain my method, I would like to stop and briefly define cold calling. The term cold calling is actually a misnomer because some ‘cold calls’ actually work best as emails. “Cold contact” is actually the more descriptive term, however, I prefer to use cold calling for two reasons. First, sometimes people feel like cold emailing will tone down the sting of rejection. The opposite is true. People aren’t always very nice on the phone but they can take on an entirely different level of nastiness over email. Second, even if you write the perfect cold email, you’ll still likely end up on a call to convert your prospects into sales.

I define my method in five basic steps. #1 and 3-5 are absolutely critical. #2 is quite controversial, but I like to do it and recommend it as part of every cold calling campaign. I’ll discuss the controversy when I get to the section on writing and practicing your script.

  1. Set the value meter appropriately so you use the right kind of campaign for the right kind of offer.
  2. Write a script and drill it.
  3. Work on your list.
  4. Do it.
  5. Iterate.

1. Setting your value meter appropriately

This is actually the most difficult part of cold calling. If you get this part wrong, your campaign is doomed to fail in either positive or negative ways. If you get this part right, as long as you get your list right, you’ll convert sales.

Consider these two types of cold contacts.

a. I call you out of the blue to introduce myself and a service I offer you.

b. I send you an email with something of value attached.

The exact value (and item of value) can differ. Some social media marketers have incredible success sending people free social media audits in their initial emails. A website performance monitoring tool I worked on had incredible success sending free website performance audits to their list. I know a realtor who signed up homes by sending home owners free home valuations.

The concept is simple – I will give you something that will whet your appetite enough to spur you on to become a customer. One possible strategy is ultimately “I’m going to give you something so valuable that you will want to give me money so I keep the value rolling in.” Another possible strategy is ultimately “I’m going to give you something for free that will demonstrate a problem you can pay me to solve for you.”

As a tactic though, giving things away for free has some drawbacks. The biggest drawback is that if you have a low quality list, you’re liable to give away the most valuable part of your product. When I started working with that website performance monitoring tool, our first campaign had abysmal results. Our biggest conversion that campaign was with website owners who wanted to sign up to keep getting the free performance reports. We wanted them to pay for the product, but that first campaign set the bar too low and mostly attracted people who wanted the product for free. I didn’t start showing positive results until I changed the list to go after companies with obvious revenue or funding. At that point, I started converting sales because people with revenue to spend could see the value we offered versus how little it cost.

Another drawback to giving things away for free is that unless you can automate it, adding value to a potential customer takes time. When you’re pre-revenue, it might not matter so much, but what if you end up in a trap where you acquire customers, but only if you invest a lot of work before you make a sale? What if it costs you $60 of work to make $20 of revenue? You’re instantly non profit so unless scale will bring down the acquisition price you will slowly sell your way out of business. Another problem is with scale. It’s easy to provide a free service when you don’t have clients, but what happens when you do? What happens if you don’t have enough revenue to hire, but you have more work than your team can do?

The website performance monitoring tool campaign was successful because we automated it. I spent one hour writing code and then all additional time went into generating lists. That tool was too cheap to invest any real time in providing the free report.

Assuming that your business model can model those drawbacks, providing value for free is the best way to get a response. If you provide something that is actually valuable, you will easily double or triple your response rate. Successfully navigating this step requires a combination of financial and marketing prowess, but it adds a tremendous amount of value if you get it right.

2. Write a script and drill it

This step tends to be controversial. When I share it with other people who cold call, their response is usually an emphatic ‘Yes! I do this!’ or an equally emphatic ‘No, I like calls to be organic and unscripted.’ While I understand the objection, my goal is always to shut the fuck up and actually do it. Writing a script and drilling helps me deal with all of the objections that my mind comes up with to keep me from doing it.

When I started cold calling, I was plagued by what ifs. What if I would stammer, fuck up my own name, or speak so fast they couldn’t figure out who I was asking for? What if they couldn’t hear me? What if I got on the phone and blanked on who I wanted to speak to? What if…

Those what ifs stopped me and my business stagnated. Finally, I knew that I had to do it no matter what. So, I wrote this script:

“Hi, my name is Greg and I am the founder and CEO of GR Web Consulting. Can I speak to your Director of Marketing or the person responsible for your website?”

Then

“Hi, I’m Greg, thanks for taking this call. How are you today? (pause and listen).”

“I was on your website and have some feedback for you, but I also built a product that I think will help you. Can I have two minutes of your time?” (pause and listen)

“Thank you. I built a tool to make it easier for home buyers to look at home online. When I was on your site, I notice that you have a lot of listings, but it would be hard for me to know if my furniture would fit or if I would like the colours. I worried that if I had a limited amount of time, I might miss my dream home. So I built a tool that makes it easy for buyers to walk through homes online and get a sense which ones they would like to see in person. I’m running a special for my first customers. Would you like to hear more?”

After that, I drilled the script. I drilled it so many times that I can repeat it verbatim twenty years later. I drilled it so many times I could repeat it in my sleep. I drilled it so many times that twenty years later, I still hate everything about those fucking words.

When I finally started calling, I eventually started to feel more natural and I abandoned that initial script. But, writing the script and investing the time to drill it did a couple important things for me:

  1. It made me confident that I could talk to someone on the phone without sounding like a moron.
  2. It made me start calling. I invested so much time into memorizing and practicing that damned thing that I had to actually call with it.

Cold calling fails 100% of the time that you don’t do it. Therefore, the key is to actually do it. Anything you can do that will force you to pick up the phone is a good thing for your business. Write a script and drill it. It’s better if you record yourself, but that’s optional. Write a script and drill it while you’re working on a list.

3. Work on your list

Working on your list is a fancy way to say ‘come up with a list of people to contact’. If you have the budget, you can buy some pretty good lists from a variety of organizations. But if not, you can usually build a pretty good list out of public information.

I usually build a simple spreadsheet that has these columns at minimum:

Name Title Company Email Phone Notes
R. Runner Product manager – road runner traps Acme ihatecoyotes@acme.org (555)867-5309 They have good prices on slightly stained anvils.

We’ll get to building a list right away, but first I want to talk about the name column. Sometimes, you’ll know exactly who to speak to. But other times, you won’t. Instead, you’ll be calling in to a main line, speaking with a receptionist and hoping you’re connected to the right person. We call that receptionist a ‘gatekeeper’. Many people have written many great articles about getting past gatekeepers, but I’ll share what I know.

First, asking for a specific name is always most effective. If you can find a first name during your research, by all means use it. However, this can be fraught will all kinds of problems. The first is that sometimes the tendency is to want to speak to a CEO when an Analyst would make that particular decision in a company. The second is that organizational charts and job titles can be complicated even if you work for a company so you will eventually ask for someone who is completely unrelated to whatever you do.

Because of this, if you’re going to pick up a phone and cold call a company, you’ll need a strategy to get past the gatekeeper. You not only need the gatekeeper to transfer you to someone, but you need to be connected to the right person.

I have always been good at getting by gatekeepers. When I speak with gatekeepers, I focus on being nice, polite and incredibly grateful. When I ask for people, I have always had luck using a phrase like “the Director or person responsible for {{whatever I do}}”. So, for example, I’ll say, “Can I please speak with the Director or whoever is responsible for online marketing?”

Now, how exactly do you build a list?

I like to use lists as experiments. I start off with a hypothesis – for example, I think that my product would be especially useful for companies that sell traps to coyotes. Then, I build a list to help me test that hypothesis. And finally, I edit the script I’m drilling to reflect and test that hypothesis. After my calls, I decide if my hypothesis was true or not and then switch up my campaign accordingly.

Want to know the damnedest thing? I’m wrong (a lot) at first. When I worked with that website performance monitoring company, the first list I came up with was full of people who wanted to keep getting the product for free. I came up with a list with lots of contacts, but they weren’t qualified, meaning they had neither the means nor the intention of actually paying for the product. With experience, I’ve gotten better at realizing I’m wrong and changing my hypothesis, but I’m still often wrong. Point being, if your first list doesn’t work, don’t quit. Just change it up and try it again.

With cold calling, you’ll get into a very strong and productive cycle. The more you cold call, the more comfortable you’ll feel. The more comfortable you’ll feel, the more you’ll learn from each call. The more you learn from each call, the faster you’ll find a list that works. And the faster you find a list that works, the sooner you’ll have to stop cold calling because you’re way too busy with sales.

4. Do it

The first time I picked up a phone, I was so fucking scared that I put it right back down. I repeated that several times before I finally dialed a number. Then, I hung up before they could answer and promptly crossed that name and number off my list. They knew my shame…and nobody could ever know.

Then I saw Reservoir Dogs with a girlfriend who loved Tarantino. One quote stood out to me: ORANGE: Don’t pussy out on me now. They don’t know. They don’t know shit. You’re not going to get hurt. You’re a fucking Beretta. They believe every fucking word ’cause you’re super cool.

Orange was an undercover police office investigating a bank robbery crew. He was in the middle of the biggest investigation of his life and was just about to spring a trap on his target. He was scared, but he pushed through it. He was a fucking Beretta. He was super cool.

Not once in my life has anyone mistaken me for super cool. But, I wanted to be a fucking Beretta or even just a Saturday night special who wouldn’t hang up before someone answered the phone. So with that quote in mind, I did it. I called, I got through my script and got nowhere, but I did it. The second time was much easier. By the twentieth, I didn’t even worry as I tapped out the number.

To my surprise it wasn’t too bad. Cold calling isn’t fun and not everyone is going to be nice, but you’ll meet more nice people than you expect and you’ll enjoy some calls. I won’t lie to you – it will often be a hard demanding slog full of lots of rejection or “send me an email with more information and I’ll get back to you”. But you can do it and you won’t know how good it can be until you pick up the phone and do it.

Now do it.

5. Iterate

As I mentioned earlier, I’m not a superhuman marketer or sales god who gets it right the first time every single time. If you are, congratulations – please leave your email address or blog address in the comments so I can learn from you. If you’re not either, this is the step that will largely determine whether or not you’ll be successful.

If you make 100 calls and get nowhere, will you quit? Or will you try something different and make another 100 calls?

Iterate means to change and that’s what this step is about. When I worked for the website performance monitoring company, my first list delivered lots of unqualified leads who wanted to keep getting the product for free.

Imagine for a moment, how I felt. I was a big fancy marketing consultant who delivered a project that could best be described as ‘death by a thousand paper cuts’. Yeah, I delivered interest, but they all wanted to keep getting the product for free.

For my next performance, I present a car company…that gives away free cars…and have I mentioned that I’m a growth guru? Fucking bang up job Greg…

That project was a failure because my initial hypothesis was wrong. I assumed that it was so affordable that just about anyone who invested in a website would invest just that much more to make sure it was online and fast. That was wrong. Website owners didn’t care unless they had someone to be accountable to. So I built another list, this time composed of companies with obvious revenues or investment and tried again. This list was much more successful because these people saw the value versus the small cost of our product.

The first list was a steaming pile of crap but it taught me what I needed to learn to build a second, more successful list. That’s what iterating is about. Accept that you don’t know everything and try again until you’re convinced that your product or service sucks and nobody will ever buy it.

Conclusion

For me, cold calling or cold contacting people starts at confidence. It takes a certain amount of confidence in your product or service to believe it’s good enough. And a certain amount of confidence to actually cold contact people with a pitch.

My method both helps build confidence and makes sure that confidence is not misplaced. It consists of five steps:

  1. Set the value meter appropriately so you use the right kind of campaign for the right kind of offer.
  2. Write a script and drill it.
  3. Work on your list.
  4. Do it.
  5. Iterate.

Providing the right amount of value early on in the conversation is extremely important. If you provide too little value and try to sell too quickly, your response rate will plummet. If you devote too much time and expense to providing value and hold off on revenue for too long, your fundamental business equation (lifetime revenue – acquisition cost) will turn negative unless you have a very high value and high margin product. In other words, you’ve lost money before you’ve even provided the product or service. You’re fucked unless scale changes either costs or revenue.

Writing a script and practicing is about confidence and locking yourself in. Once you’ve practiced a script enough that you know it by heart and can deliver it naturally, you’ll want to use it just so that wasn’t a colossal waste of time. As a secondary skill, you’ll be confident that you’ll sound fairly natural your first few calls though chances are, you’ll quickly stop using the actual script in favour of a more improvised conversational approach.

While you’re practicing, it’s time to start working on a list of people to contact. It’s best if you can find the name of the exact person to contact but that’s not always realistic. If you can’t, you’ll need strategies to get through gatekeepers – gatekeepers are people like receptionists who answer phones and direct calls to the appropriate people. When you’re getting through a gatekeeper, you need to be transferred to the correct person. Getting through to the wrong person first will cut your conversion rate even if she introduces you to the correct person.

After your script and list are ready, it’s time to start contacting people. In the beginning, it will be really hard. Cold calling is never particularly fun or easy, but as you practice you’ll get used to it. You’ll meet some incredibly nice people and learn great things about the problem and your solution. I know it’s hard to get started but you have to do it. People will be far nicer than you expect.

Unless you’re a superhuman marketer who generates perfect lists the first time and targets them with the perfect value offer, you’re going to have to make some changes as you go along. It’s complicated because you can change anything. For example, you can change what kind of value you provide, how you construct your list or what you say in the first thirty seconds. Hopefully as you talk to people, you’ll gain some sense of what works and what resonates. Armed with this, you’ll have a better idea what to change and how.

This method is hard work, but it works. As Biggie Smalls said, “Follow these rules you’ll have mad bread to break up.” Follow these rules and you’ll learn if your business is really viable. If your business is viable, this method will earn you sales as long as you keep working hard, trying different things and making calls.

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