There’s nothing like picking up the handset of a ringing telephone, only to be barraged by an unsolicited call from someone who is trying to sell you something. As evidenced by the more than 125 million phone numbers listed on the National Do Not Call Registry, cold calling is detested by many, and embraced by few, as a solicitation tool.
If sales strategist Joanne Black has her way, cold calling will soon go the way of the eight-track tape. In her new book, this San Francisco-based speaker outlines a better way for companies to reach out to new prospects, and it all revolves around building referral systems and networking.
“If you make 100 cold calls, you might talk to 20 people, set eight to 10 appointments, and — if you’re lucky — close a single deal. That’s 1% return on cost,” explains Black, author of No More Cold Calling: The Breakthrough System That Will Leave Your Competition in the Dust (Warner Business Books; $23.95). “People don’t like making them, and no one likes receiving them. What does that tell you about the effectiveness of cold calling?”
For companies working directly with consumers, cold calling is even more prohibitive, thanks to the Do Not Call Registry. The national program requires companies to “scrub” their databases (to remove numbers recently added to the registry) on a quarterly basis or risk fines of up to $15,000 per infraction.
Ask for referrals. Too many companies pour money into advertising, trade shows, e-mail blasts, and newsletters, then sit back and wait for the phone to ring. A more proactive approach starts with asking your best customers for referrals. Start by pinpointing your ideal client, understanding that not just anyone will do. “When you know who you’re looking for,” says Black, “you’ll be able to describe them to your customers and ask for the right kind of referrals.”
Approach the right people. Make up a list of 100 names, organized so that the very best prospects are at the top of the list. Say to them: “I’m building my business and I’d really like your help. Who do you know who matches the description of my ideal client?”
Black advises firms to take a referral-based approach to sales.
She says qualified referrals (those who want to talk to you, and vice versa) turn into clients 50% to 90% of the time. Cultivating a successful referral-based business requires a calculated approach that includes the following strategies:
Network your heart out. Black advises sales professionals to attend one event per week. “Get active in the organization,” says Black. “When you volunteer and get involved, people will see you as being trustworthy and realize that you’re a good person whom they can feel confident referring people to.”
Black says sales professionals should ask at least five people per week for referrals and attend at least one networking event per week to get the momentum going on a new referral-based system. Results will vary based on the product or service’s selling cycle, but typically include more desirable clients, higher profits