What Is Your Definition of Cold Calling

I work with a lot of great companies to help them improve their sales results. At one point in time I think many of these companies hired me as their consultant because I ran a business unit with 1,100 sales professionals and they thought I might have learned a thing or two in that experience, and they were correct. Today they hire me because I have a demonstrable record of success helping companies grow in my capacity as a consultant. But that does not mean they agree with everything I suggest and one of the most controversial suggestions I give is, “Stop cold calling,” in the traditional definition of the term, which to me means randomly knocking on doors.

You cannot grow revenue without business development and my team has a lot of focus on ensuring our clients are doing enough in the business development area. So I certainly am not saying don’t focus on business development when I suggest they stop with the conventional cold calling. I also realize that there is pain in change and I am asking for a great deal of change. One big change is the mental model that when a sales professional is in the office they aren’t engaged in selling time. After years of that concept being pounded into our heads that’s a tough one to change, but in my opinion and from my experience starting as a sales professional and working through many levels of management, I know that it simply isn’t true. I can remember, somewhat fondly, many times having breakfast at Denny’s (I guess it would be Starbucks’s today) with my fellow sales team members after being thrown out of the office.

So from my perspective, “cold calling” is a term that is a proxy for business development. Everybody wants new customers so they tell the members of their sales team to go cold call. Back to my days as a front line copier rep—to snuff out any cynicism readers may have with my Denny’s reflection, so that they don’t dismiss my entire article on a poor hypothesis—I set the company record for sales in my fifth month, double the previous record, and I was sales rep of the year my first full calendar year, and I was promoted to manager in July. So by July I had more revenue than any sales professional had in 12 full months.

I wasn’t lucky, I didn’t stumble on some big deal and I wasn’t given one current customer. So how did I do it? I went to this training class offered by Minolta at that point and taught by their corporate trainer, a guy named Tony Codianni. I don’t remember how long the course was, something like a week but it might have only been three days, but what I do remember is Tony emphasizing cold calling, phone calls, and closing skills. I took the toolkit Tony gave me and went back and executed exactly as he laid it out. The other reps in the office would laugh at how fearless I was at cold calling and phone calling, and how disciplined I was at spending my time productively. That was 1984 and to give some perspective we were selling IBM typewriters, Panasonic memory typewriters, and Windows wasn’t invented until 1985. The technology world has changed substantially since then!

So yes I cold called and became a highly successful sales professional in that time. And when I walked into that building in Philadelphia my goal was to identify every company in that building and to find the name of the decision maker in every one of those companies. My secondary goals were to try to get a peek at their copier to see what they were using and to develop a relationship with the receptionist, because the phone systems of the day required that you go through the “switchboard” to get to the person you needed to talk to.

So the four goals of cold calling at that time were:

1. Identify the companies in the building
2. Identify the decision maker in each company
3. Identify current copier
4. Develop relationship with the receptionist so when I called back she would transfer me to decision maker

Let’s start with #4. Like the memory typewriter it’s an antiquated concept because all phone systems today have direct inbound dialing and every decision maker has their own number/extension. That doesn’t mean that if they are at the highest level of the organization that they don’t have an executive assistant that answers their phone line, but I don’t need to go through the receptionist any longer. Moreover, everybody has email today and they also have a cell phone, so I can email or text them directly. So we can eliminate #4 from our list of cold calling goals.

I’m now going to move to #3. In 1984 there were different technologies in the copier product. Savin, who was a standalone company then before being acquired by Ricoh, used liquid toner and had trouble with some high cotton content letterhead. Some Canon products used cold fusing and if you tried to write on a copied page with a ballpoint pen the pen would clog up. Moreover, most of the manufacturers only had three or four products and product extensions—faster devices—were being introduced so you truly could “upgrade” somebody in speed, to a speed that wasn’t available in the past. And, companies were introducing technology advances, and I know this was a long time ago, so if they had a copier that didn’t have duplexing or an intelligent document feeder, normal features today, you wanted to know that so that when you called to speak to the decision maker you could say something like, “I know you have a Kodak copier; how do you copy your oversized documents,” when their device only copied 8.5X11. Today, unless you’re into the production space, all the devices have similar functionality. Therefore, not knowing what devices they have until the initial appointment does not affect your ability to get that appointment. Therefore, #3 is no longer applicable.

We’ll now move to #1, identify the companies in the building. Back to the technology I sold in 1984, three copiers with the fastest speed being 30 CPM. The smallest copier I sold was a 12 CPM copier that literally had a moving platen. When I sold that copier I made a commission of about $400. When I sold a 30 CPM copier I made a commission of about $1,000, maybe if I hit a “home run” I earned a $1,500 commission. What this says is that everybody was a prospect, as I didn’t care what copier they bought from me since the commission range wasn’t significant. That’s not the case today.

Through trial and error, I learned to walk right past the small dentist and doctors’ offices as they had one small copier and they always got four or five bids; I couldn’t make any money with these prospects. It made my day when I found a nice sized law firm in a building with four copiers. If you look at the most successful sales professionals in your organization today you’ll note that they have this same learned knowledge of the correct accounts to call on. Yet we don’t educate the new or struggling sales professional on the importance of calling on the correct accounts at the correct level. Rather we let them cold call and try to figure it out on their own.

Today I can go to the local library and use a list service to search out those law firms, and every other vertical market I want to attack. In an hour I will know every law firm in my geographic territory with more than 15 employees; I will know every engineering firm with more than 20 employees; I will know every CPA with more than 15 employees. I could go on but you get the point.

In one hour I’d have a list of the accounts in my geographic territory that have the highest revenue potential and that have the ability to buy all of the products and services in my portfolio, from multiple copiers to document management, MPS, MNS, telephony and IT services. I don’t need to reinvent this list, as it is readily available with a little time in the local library.

So now we come down to #2, identify the decision maker in the company. In our space, copiers, document management, MPS, MNS, IT services, and telephony, that decision maker is fairly clear and I will provide you who that is in four bullets:

1. If the company’s revenues are < $15 million it’s the owner
2. If < $40M it’s the owner or the CFO (in smaller companies they sometimes call this person the controller or VP of finance)
3. If < $80M it’s the CFO or CIO (in smaller companies sometimes called the VP of IT)
4. If > $80M it’s the CIO, VP of IT, or director of IT, and the bigger the company the farther down the scale of responsibility resides i.e., at $90M the CIO, at $300M the VP of IT, at $800M the director of IT

Now that you know who to contact simply look them up on LinkedIn; you no longer need to go ask the receptionist, who more than likely doesn’t know the correct person and will provide you the name of who she calls when she has a technology issue, like a help desk manager. So physically cold calling not only doesn’t help you with #2 but may actually send you on fruitless business development efforts trying to get in touch with the wrong person at the company.

As a sales professional you have to conduct business development every day. The most important thing you can do is to continue to add prospects to your pipeline. The revenue equation is simple: revenue = prospects X close ratio X average transaction size. What I am advocating is a refined approach to that prospecting that will increase your pipeline much faster than if you use the approach that made me successful in 1984, physically cold calling. It’s 2016, use a 21st century approach to business development and watch your revenue and earnings soar!