Cold calling - why it doesn’t work anymore
Revenue growth
Sales team structure
As a strategic advisor to Startups and Fintech companies, I talk to many Founders and CEOs. One of the things they ask me often is about sales team structure, and particularly, whether they should hire somebody to do “cold calling” for building client base. My answer is almost always “no” because of the reasons listed below.
Old way of finding customers
Before the internet emerged, cold calling was one of the tools businesses used to reach out to potential clients directly. But is it effective after the internet changed people’s behaviour so much? The changes our society experienced in the last decade was such that we are not solely relying on face-to-face interaction. Recent Covid lockdown has also altered how we interact with people - we became increasingly impatient when “cold callers’ interrupt our activity out of blue. The use of mobile phone too accelerated this trend - we can simply block these callers if we want to.
Creating control group to target
So why is cold calling not working in the modern society? This old fashioned sales tactics is not effective because it fails to create “control” target group to engage. “Control” group is a group of people whose interests align with your product offerings. Control group comes in various forms - for example, let’s imagine you are an Asian street food vendor targeting office workers. Rather than going around the doors in residential areas with promotion leaflets, it would be more effective to establish a stall in office areas during lunch time. This means you will attract office workers who are passing by during the lunch break. You are essentially appealing to a captured audience who are hungry and looking for something to eat for lunch.
Identifying control group
Your products sell only if people you are targeting are interested in the products. Therefore, the first step to build effective sales strategy is to identify the control group. Who will be interested in your products? What benefits will your products bring to these target clients? Ask questions below before you think about building your sales team:
What is your product and what problems are you trying to solve?
How is your product going to solve the problem? How is it different from the products offered by competitors?
Who are the people affected by the “problem”? And most importantly where will you find these people you are targeting?
The first question will identify the gap your product is trying to fill, the second question will then define value proposition of your product further. Lastly the answer to the third question will give you an idea who your control group is and where to find them. Once you have these answers you can then develop a strategy to create your target control group. Rather than hiring cold calling sales reps, the focus should be how to influence the people in the control group - for this you need to understand how building viral presence works to spread the word. Read more about viral presence here.
