A number of years ago, I received a call from a company asking me to help them generate new business and recruit new customers.
Up to this stage, their sales team had looked after existing clients and handled incoming enquiries only. Even so, they were now under pressure to proactively generate new business.
They wanted me to help them source new leads and develop a sales strategy. They also asked me to train their staff to enable them to confidentially pick up the phone and effectively “cold call” new customers.
I knew I could help, still I realised I needed to ask them some important questions to figure out where we should begin.
I began by asking the client "how many names did they have on their database?” to which they responded “there are 20,000 contacts”. I then enquired “how many of the records are active customers right now?” This time they said “just 2,000 of these are live”.
Although the customer had this information at his fingertips, it was still quite sobering for him to say it out loud – realising that just 10% of their customer base was buying right now.
Essentially, the client had 18,000 names on their system that were inactive. They were made up of companies that had once been customers. Realistically, some of these may have gone out of business and others had moved elsewhere. It also included people that once enquired, but never bought.
Even allowing for duplicate records, we modestly estimated that potentially we could tap into around 15,000 leads. This was a very encouraging insight for the customer – knowing they could tap into “the low hanging fruit”.
In my experience, companies can often impulsively feel they have no choice, but to get on the phone and actively “cold call” new leads when they need new business. Whilst it can certainly work - it’s actually one of the hardest jobs to do.
Often staff who have traditionally handled inbound sales find it difficult to make the leap where they feel confident carrying out proactive cold calls. Therefore, it needs time and patience to get there.
When you think about it, we are contacting a company who don’t know us. We don’t have a relationship and we are probably unaware if they are in the market for our product or services. We also have to contend with getting past the gatekeeper and in handling rejection. This will take more time and effort, especially as the numbers will naturally be lower compared to calling existing clients, dormant accounts or enquiries.
In fact, many people may be familiar with the idea that you have a “1 in 2 chances of successfully selling to an existing customer” and a “1 in 4 chances of selling to a dormant or sleeping customer”.
We know we can definitely succeed “cold calling”. Yet, I often suggest companies consider focusing on their existing database before they venture into new territories for new business. My attitude is why waste an opportunity with existing or old clients when its within your reach. That said, I also recommend implementing both strategies as they can run successfully run together as you widen your net.