The Cold Facts About Cold Calling

Don’t blame the economy for the lack of new business! You’re simply not talking to enough
people who are qualified to buy your product. During the Dot.Com boom it was easier to make
contact with buyers. Back then, if you could talk to enough people, eventually someone would
buy. Today, practically no one is answering their phone. What’s going on?


The main reasons why you don’t have enough new business:
  1. Your salespeople are not dialing the phone enough.
  2. Your salespeople are not getting through to enough sales prospects over the telephone.
  3. Your salespeople are not calling on enough decision-makers.
  4. Your ‘sales pitch’ is ‘broken’.

Business Update: If your business depends upon cold calling to make contact with prospective
customers, you now have a growing cost of sales problem that can put you out of business if you
don’t re-think your new customer acquisition strategy, and the emphasis you place upon the
telephone cold call to find new customers.

The Problem With Cold Calling: Given the infrequent amount of time a salesperson can
actually speak to a sales prospect ‘live’ on the telephone, it seems that telephone cold calling is
NOT the cost effective sales tool it once was for generating new business. Assuming that your
salespeople are even making enough cold calls, one look at the specific costs of making a cold
call over the telephone may explain why your cost of sales are going up, while new business
revenues are falling short of expectations.

Do the ‘Sales Math’ – The Actual Costs of Telemarketing/Telesales & Cold Calling
If your business is dependent upon the use of the telephone to find new customers you are likely
spending $2 to bring in $1 in new business.
To illustrate the estimated costs to your business for prospecting over the telephone, the chart
below details the estimated costs incurred by a company to have full-time salaried salespeople
making cold calls to prospects over the telephone to set sales appointments.

Cost of Sales Analysis for Full-Time Salaried Salespeople (Salary + Benefits + Exp. = Sales Cost)

Total Compensation
Month   Week  Day  Dials  Call Cost
 Daily Result  Cost per Contact
$114,000/yr. $9,500  $2,375  $475   25/Day   $19.00  2 Contacts   $237.50
$102,000/yr. $8,500  $2,125  $425   25/Day   $17.00  2 Contacts   $212.50
$89,000/yr. $7,416  $1,854  $370   25/Day   $14.80  2 Contacts   $185.00
$78,000/yr. $6,500  $1,625  $325   25/Day   $13.00  2 Contacts   $162.50

What You Don’t Know About Cold Calling May Be Costing You $$$…
Looking at the cost of sales data described in the above chart, consider the number of
prospecting calls made by a typical salesperson to sales prospects during a given month. A total
of 525 calls made by an individual salesperson may seem a bit far-fetched, but keep in mind that
those 525 calls per month amount to only 25 calls per day. How much time does it take to dial the
phone 25 times? 1 hour at the most?
Now see the typical results associated with making cold calls in terms of actually getting through
to sales prospects over the telephone, and having conversation with them about buying the
product being offered up for sale. The reality is that it doesn’t happen very often. And finally,
consider the fixed cost of sales in the form of salaried compensation being paid in exchange for
the infrequent contact salespeople have with sales prospects on the telephone.
Question: Are your salespeople making enough of an effort to fill your sales pipeline in exchange for what they are being paid?

Additional Cost Factors Associated with Telemarketing/Telesales/ & Cold Calling
I. The Cost of Sales Inactivity
Every salesperson hates cold calling! So it should come as no surprise that most salaried
salespeople would rather do something else than to make a cold call to a sales prospect. They
can’t take the rejection from prospects, so they easily find some excuse not to pick up the
telephone and make a sales call. (But isn’t that what you’re paying them to do?)
Fact: The more you pay your salespeople and the less time they spend cold calling, the more it
costs to find new customers.

II. Your Sales Prospects Aren’t Answering Their Telephone
For those salespeople that make a consistent effort to prospect for new business, it’s now harder
for them to win the ‘numbers game‘ in terms of making enough contact with prospective
customers over the telephone. Studies show that in the past 10 years, the percentages for
reaching decision-makers ‘live’ on the telephone has dropped from 15% in 1998 to only 4% in
2011. A salesperson in 1998 that made 100 sales calls per day probably got to speak with 15
sales prospects on the phone. Today’s salesperson is lucky if they reach 2-3 prospects on the
phone each day. Given the advent of cell phones, Blackberrys, and wireless Internet access, sales
prospects are spending very little time in their office, so they’re almost impossible to reach.
Fact: Considering that sales prospects are seldom in their office to take sales calls, it now
requires companies to spend more money on new sales hires in order to make enough contact
with sales prospects, and close new business.

III. The Cost of Poor Sales Call Execution By Your Sales Team
Nothing adds more to the cost of sales like a poorly executed sales call to a sales prospect. This
added cost usually comes in the form of lost business. Most salespeople are still executing an old
fashioned ‘elevator pitch‘ with sales prospects, and that can cost your business a lost opportunity
at a new customer. Most salespeople make a mess of things during the conversations they have
over the phone with prospective buyers because the ‘war of nerves‘ usually gets the better of
them. Your average salesperson, working under pressure, stumbles through even the simplest of
dialogue, and usually forgets to ask important questions, and rarely allows their sales prospects a
chance to speak. You’ve probably gotten more than your fair share of sales calls on the phone
from salespeople. Didn’t it sound plain awful at times? No wonder sales prospects back away,
and ask to be sent sales literature so they can get salespeople off the phone, and get back to work.
The poorly executed ‘elevator pitch‘ just isn’t worth their time. They all sound terrible…
Fact: The cost of a bad sales call immeasurable. Once the wrong first impression is created in the
sales prospect’s mind it’s nearly impossible to keep them on the phone, and engaged in

IV. The Cost of Your Sales Team Calling Too Low in the Organization
Most every salesperson is shy about calling on the chief executive, or senior executive of a
company they want to do business with. Salespeople prefer to call on sales prospects with a job
title that they feel they can relate to. As a rule of thumb, the lower in the organization the sales
prospect is, the more comfortable salespeople are with calling them. The problem with this
course of action is that salespeople prolong the time it takes to close sales by starting with middle
managers that cannot make decisions to buy anything due to the soft economy we’re in. Middle
managers need their senior manager’s approval to buy anything, so why aren’t more salespeople
starting at the top?
Fact: A salesperson’s reluctance to call on CEOs, and other senior managers only extends the
amount of time it takes to close new sales. The longer it takes to close a sales the more it adds on
to your cost total of sales.

In today’s business climate of uncertainty you MUST HAVE a multi-faceted sales and business
development strategy to remain competitive in your business. Since 2002, Dealbuilders – (Peter
Ekstrom) has successfully implemented a wide variety of new business development strategies
that help companies increase the amount of direct contact they have with the companies they
want to do business with.
If you have growing concerns about the future direction of your business, and want a reasonable
rate of return on what you spend to generate new business, please contact Peter Ekstrom at
516-541-8160, or email: Let’s have a frank and open discussion
about what it will take for your company to increase it sales, and improve its competitive


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One Response to “The Cold Facts About Cold Calling”

  1. Brian Levandusky Says:

    I target the leads that I cold call. I sell TV Commercials so I need buyers with advertising budget. I look at print coupon books and target those leads

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