“You don’t know me, and I don’t know you. I’m Senior Vice President at Stratton Oakmont.”
Does that line ring a bell, so to speak? It’s from a cold calling script that did wonders for the firm Stratton Oakmont in the movie The Wolf of Wall Street.
Nearly a decade on, if you try using the same script today, you’ll hear a chuckle on the other end followed by the click of the phone being hung up.
Or maybe not, because smartphones don’t make a sound (strangely, don’t you think) when the call is cut.
Which leads us to a debate (not really) between a relic from the days of the landline phone and an internet tool that has withstood the test of time and technology.
Cold calling vs cold emailing – what works better? There is one self-evident answer – which I’m going to explain over the next 2,000 words. Because we at RevBoss are very biased towards the right answer.
As lead generation partners for some amazing brands across North America, we get asked this question a lot by potential clients. And after running hundreds of first-hand campaigns, conversations with industry leaders, and some detailed market research, we’ve come to the conclusion that cold calling isn’t a viable marketing channel for 2021, let alone an alternative to emailing. The last company to use it successfully was Stratton Oakmont.
Want to know why?
- Change is hard. Which is why traditional sales and marketing companies find it hard to let go of strategies that once worked well and try new ones that require effort and smarts to master.
- In the age of personalized messaging, cold calling pisses off customers and damages your company’s reputation.
- Emails let you have a structured discussion at the time of your prospect’s choice – a critical feature for conversations with “cold” strangers.
Why Does Cold Calling Not Work?
On paper, cold calling should work, and it has worked for decades. Trained sales professionals have prospected for real estate, insurance, investments, and virtually every other product since sliced bread. But sometime in the last decade or so, the system became a bit too inefficient.
You will still find a ton of content on the internet comparing the two as if they were on an equal footing. But if you dig deeper, you’ll find that this content is created by companies that probably have a product that tracks your calls and couldn’t care less about your conversion rate. Like most professionals who’ve tried it in the last few years would tell you – it is tough to make cold calling work.
And there is more than one reason why.
1. Cold Calls Are Intrusive
No matter how unmovable you think you are, you are conditioned to answer calls. Even if you see an unknown number flashing on your screen, your brain screams at you to act.
What if this is a stranger calling me to inform me one of my loved ones has had an accident?
What if this is my son’s teacher calling me to pick him up from school?
What if this is a delivery guy not able to find my address?
Our primitive brains are conditioned to react to three things: pain, noise, and smartphone notifications. Not entirely kidding on the last one. And that is one of the key reasons why we answer calls from unknown numbers, only to get disappointed the moment we realize it is a sales pitch.
Since most people are taught to be polite, they respond to cold calls but are already positioning themselves for disappointment and wasted time. Do you want your prospects to go through this experience in their very first interaction with your brand?
2. The System is Set Up Against You
Every major country like the United Kingdom, the United States, and even the ever-polite Canada has implemented a Do Not Call List. As B2B sales professionals, it is very challenging to work around these lists. Even if you figure out a way, there is a high chance the decision-maker you are trying to reach out to has inbuilt caller ID software on their phone that might identify you as a Spam contact.
Case closed. Prospect lost. Time wasted.
3. Severe Damage to Your Brand Equity
90% of decision-makers do not respond to cold calls, per a study by SalesLife. If a decision-maker has ignored your cold call and identified your brand, it is a rocky start to an already complicated process.
Sales professionals know that B2B conversions are driven by collective decision-making, long periods of negotiations, unpredictable internal and external variables, and several moving pieces. On top of that, if a key person is irritated, your sales team is facing a steep uphill climb to conversion
4. Spend More, Get Less
Source: Baylor University
Here is some Cold Calling Economics 101:
- Let’s assume you need 10 new customers this quarter to meet your revenue targets. At the conversion rate of 1%, you will need 1,000 appointments. And to get 1,000 appointments, you will need 100,000 cold calls.
- Generally, you will pay approximately $300 for a list of 1,000 prospects. (The more important the prospect, the more expensive this list would be.)
- Let’s assume you have access to a good sales team that can make 10 calls per hour and actively update your CRM system. That would require 10,00 man hours of engagement.
- On average, it costs $47.5/hour to outsource sales calls to a well-trained telemarketing team. For 10,000 hours of engagement, your cost would land at approximately $475,000.
So, you end up paying the annual salary of an entire sales team to get 10 customers. Well, you need not burn through half a million dollars – you can try email.
5. Cold Calling the MAN? Good Luck with That!
No sexism here. MAN is short for a person with the Money, Authority, and Need for your offerings. Most cold calling stats assume that a lead who agrees to a meeting needs your product. But, what about the other two? You can develop a relationship with the Senior Manager and it would still not help your sales team if the final decision is in the CFO’s hands!
We already know the low conversion rates for cold calls. Add MAN constraints for your contact and it gets even less viable.
6. Prospect, Educate, and Close in 80 Seconds? Sure.
You might have filled your sales team with closing rock stars. But the trouble is, the average cold call lasts only 80 seconds. Expecting them to identify the buyer’s needs, educate them on your services, and book an appointment, all within less than one and a half minutes is asking for a bit too much.
Does Cold Emailing Really Work Better?
So the sun rises in the east and cold calling doesn’t exactly work. We can agree to that. But how is cold emailing a better option?
Glad you asked.
1. Segmentation and Targeting
Even the most basic email database (or list you build) will let you deduce three critical pieces of information about your prospects:
- Name of their company (You can get this from their email but not their phone number)
- Industry (If you know the company name…)
- Ongoing industry dynamics (Hello, Google)
Using the information gathered with these three data points, you can tailor your email to a great degree. And since you can use an email automation tool to send them, your sales reps don’t have to remember a new script for each lead segment, remember every part of the script, or improvise on the spot.
2. Trackable Performance, Optimization, and Scalability
Cold calling gives three categories of feedback:
- The prospect did not respond to your call.
- The prospect answered the phone but did not convert.
- The prospect answered the phone and agreed to a meeting (or whatever is your next conversion step).
Cold emails capture more data:
- Open rate
- Bounce rate
- Click-through rate
- Spam complaints
More data means that at the end of every cold email loop, you have more feedback. More feedback translates into better optimization. And better optimization results in higher conversion rates for lesser dollars.
So, the system becomes more efficient as you grow. And that is what makes cold emails more scalable than cold calls.
3. Structured Conversations
What happens when your cold call is not answered? You move on to the next number on the list. OK, you try a couple of more times on different days, but that’s it.
If you have completely outsourced the cold calling, you might not even expect the telesales person to give much thought to which number didn’t respond and why. So, no response equals the end of the prospecting.
With cold emails, you can try doggedly to get the conversation going even if your initial attempts did not elicit a response. You can run drip campaigns, send follow-up emails (with different templates), or send tailored offers.
B2B sales can take as many as 8 touches to reach a conversion. And cold emails have room for these many touches or more, as far as you can craft enticing subject lines and engaging copy. Of course, some prospects might mark your emails as spam, but they have to be horrendously bad for that to happen.
4. Prospects Can Avoid You (And That’s a Good Thing)
We have come full circle.
When was the last time you dropped doing something important to immediately respond to a call? Great. You can recollect it.
When was the last time you dropped doing something important to immediately respond to an email? Almost never? Great. That’s the point.
People don’t leave everything to read an email they aren’t eagerly expecting. And when a prospect is reading your email at ease or with time on their hands, you can reasonably expect them to do so with an open mind.
Make Your Cold Emails Un-Ignorable with These Tips
Here are some best practices you can adopt to make your sales emails remarkable and nudge readers to talk to you:
Convert for a call, not the sale: Design your cold emails for micro-conversions, such as a “warm” call, a video call, or an in-person meeting. At the very least, the prospect should want to download a case study from your website, read a blog post, or watch a webinar. The aim is to create a favorable impression of your products and your brand, and get them talking to you.
Personalize for the individual: Use whatever data points you have on the prospect to personalize your email. You may not know of any problems or constraints specific to their company, but you can certainly provide a useful insight or two about the industry they are in. Even if you can’t offer something of value to your prospect, personalization shows them that you’ve done your homework and are interested in working with them.
KISS it: Based on its research of over 40 million emails, HubSpot found that sales emails between 50 and 125 words long elicited the most number of responses. So cut out the fluff and get to the point. Throw in a one-liner but don’t tell a story (yet).
Track and improve: Strong subject lines, mobile-friendly templates, personalized “from: fields, and a clearly-defined CTA should get your campaign the momentum it needs. Constantly A/B test to see which elements, copy, designs, times, and segments are working for you.
Cold emails are great to scale your prospecting process. Want to use the finely-honed insights of a team that has worked through hundreds of cold email campaigns across dozens of industries? Click here for a free consultation with one of our experts.