How to Optimize Your Cold Calling Strategy
A sales manager recently asked, “Is cold calling effective?” I replied, “Sometimes.” My answer was not an attempt to be glib or elusive but rather a factual observation from working with hundreds of sales teams. There are sales teams who find cold calling effective, while there are others who think it is useless. In this article, we’ll explore the value of cold calling and how your team can improve their cold calling results.
Proactively reaching out to potential clients with a phone call can be time well spent for sales reps. However, many sales reps will complain that picking up the phone and prospecting are the worst parts of their job. Regardless of what side of the fence you are on, the bottom line is that the phone is still a valuable sales tool.
Reframe the Question
Instead of asking if cold calling is effective, a better question may be, “How do we effectively prospect with the phone at scale?” Over the years, I’ve noticed a pattern among inside sales teams. There are often a few high performers who crush it while prospecting over the phone, whereas the rest of the team struggles. The logic worked like this: We have two reps booking 20 appointments per month. If we ramp up to 5 reps, we should at least double our number of appointments. But that math rarely works. In fact, when the CFO looks at the numbers, the only thing that doubled was the cost per meeting.
Many organizations find that the ROI on outbound prospecting decreases as the team grows. As the ROI decreases, so does their belief that outbound prospecting is effective. Eventually, they start to tell themselves that it’s a waste of time, damages relationships, taints the company’s image and is an invasion of privacy. For poorly skilled prospecting sales reps, all those statements are true. I compare that mindset to weightlifters who say yoga is a waste of time. The benefits of yoga are undeniable, but if you are trying to squat 500 pounds, it is probably not the right exercise.
Obviously, there are many organizations with large call centers making thousands of outbound calls per day. However, if you are trying to scale your outbound sales results, it’s a mistake to think that if it works for them, it will work for me. That is like the weightlifter and yoga analogy above; matching the exercise to the desired outcome is fundamental to achieving results. The benefits of outbound prospecting are undeniable, but we need to build a solid foundation before we start adding headcount. What do we need as a foundation to scale an outbound sales team? Now that we’ve aligned our objectives, let’s dive deeper into how to scale effectively.
Scaling Outbound is Hard
Let’s recognize the facts: As a sales leader, scaling your outbound sales team will be one of the biggest challenges you will face. Discount the challenge at your own peril. Before you even think about onboarding new hires, it’s imperative you know your current outbound numbers. Below are the numbers you need to determine with your current reps. It is amazing to think a company would want to scale its sales efforts without the ability to monitor these numbers daily. There is absolutely no reason any sales leader should be guessing or estimating these numbers:
- Number of Dials Per Day
- Number of Connections
- Number of Appointments
- Dial to Appointment Ratio
- Average Deal Size from Outbound
You don’t need to be a math major to recognize that if you increase the number of reps, you can increase the number of dials. The problem with this logic is that adding reps is also your most expensive option. This is where sales enablement comes into play. You want all your behind-the-scenes technology ironed out before you scale your team. For example, if your current rep is manually dialing every call, investing in dialing technology can increase the number of dials without adding headcount.
As a sales leader, when you take the time to analyze the data, you often find opportunities for improvement. It could be better contact data, improved automation, better training, or improved call coaching. Before you attempt to scale the model, you want to optimize the current process. We’ve seen it a million times: adding reps to an inefficient process is like herding cats. The sales leader is running around trying to fix individuals when the process is causing chaos. What usually ends up happening is that the sales leader works harder than ever and eventually ends up looking for a different job. That is why the first step is to analyze and optimize.
Time to Talk Documentation
We are sales reps; we are not accountants. We are paid to create revenue, not create documents.
That’s the second biggest mistake we see sales leaders make when trying to scale their outbound sales team. They skip the documentation step. The reality is that the only thing you have to document about your outbound sales process is everything. That’s right; we are creating documents that will provide repeatability and consistency to the process. The more detailed your documentation, the better your outbound team will perform. The worst thing we can do as sales leaders is to leave it up to the new sales rep to decide what to do.
This document will be more than a training manual. It needs to be a living document, not a one-time project. It should include best practices, scripts, workflows, and internal policies and procedures. The fact is that your best-performing reps are currently doing things they are likely not aware they are doing. Transferring that knowledge from their mind onto a document is critical.
Because this step can feel overwhelming, we suggest prioritizing your document creation. This way, you have order to what you are creating instead of documenting random topics. When your team members see that the document is updated regularly, it is viewed as a valuable resource. This will be the blueprint to ensure your team is up to speed quickly and hitting their target numbers. Without detailed documentation, scaling your outbound team will be nearly impossible.
Once you analyze your data, optimize your sales enablement technology and document the entire outbound process. Then you are ready to hire your first reps. One of the biggest mistakes we see companies make on the hiring side is that they keep underperforming reps for too long. What usually happens is that the sales leader invests hours creating the job posting, reviewing resumes, and interviewing potential candidates. Once the sales leader selects a candidate, hires, and invests their personal time in one-on-one training, the new sales rep begins to feel like a part of the family. If the new hire does not meet a minimum level of performance in 90 days, a tough decision needs to be made.
Letting an underperforming rep go can be an uncomfortable experience, and because it is, we sometimes delay it too long. However, it is a crucial element of sales leadership, and retaining underperforming reps too long is one of the biggest hinderances to outbound teams. If your process is optimized and well documented, sales leaders should not make excuses for the sales rep or blame themselves. Instead, document the red flags you noticed with the hire and figure out strategies to avoid them. It’s too simple to say, “Well, that hire didn’t work out,” and not learn anything from the experience. Recruiting an outbound team is a perpetual process and that must be the mindset.
Making outbound prospecting calls can be an effective use of the sales rep’s time. It can also turn into a nightmare for sales leaders if they try to scale before they are ready. Taking the time to analyze and optimize your current process is the first step. Documenting the entire outbound process in detail is step two. Establishing minimum performance metrics within the first 90 days is the final step. Each step is interrelated and skipping one will negatively impact the entire process.
The steps above are areas we’ve seen companies skip and struggle. However, creating a high-performance outbound team is more nuanced than these steps alone. There are still the daily activities of coaching, training, managing, and rewarding the team. However, without the proper foundation, it’s like asking the weightlifter to perform the scorpion pose in yoga—probably not going to happen.
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