18 October 2024

Article

What is Cold Calling? Biggest Challenges Solved + Resources

12 minute read
By: Ilse Van Rensburg
Cold Calling

If you think cold calling is a waste of time, think again.

Most buyers (82%) are open to meetings with sales reps who cold call them.

And, yeah, it’s an intimidating lead generation strategy, but it’s a great way to find potential customers and build relationships.

So, if you’re unsure how to start that first call or handle rejection, continue reading. This guide will explore tactile techniques for cold call success, common mistakes, and how to overcome them.

Let’s begin 👇

What is cold calling?

Cold calling refers to reaching out to potential customers who haven’t interacted with a salesperson before. It’s a type of B2B telemarketing and is one of the oldest and most common marketing methods.

It’s called a cold call because the SDR has no prior interaction or relationship with the prospect (potential customer), which is quite different from warm calling.

It typically involves phone calls but can also include emails or other forms of communication. The goal is to introduce a product or service to a prospect who may not be actively seeking it, with the hope of generating interest, setting up further discussions, or closing a sale.

This method has been a staple in sales for decades and remains relevant in many industries, particularly in business-to-business (B2B) sectors.

Despite being a traditional approach, B2B cold calling has evolved significantly with modern technology, analytics, and customer relationship management (CRM) systems that help sales teams target their outreach more effectively.

Historically, cold calling has received a somewhat negative reputation due to its unsolicited nature.

However, when executed strategically, it can still deliver positive results, allowing businesses to reach prospects who might not have otherwise discovered their product or service.

The success of cold calling largely depends on how well the salesperson understands the prospect’s needs and pain points and how well they tailor their pitch accordingly.

Although it can be an effective way to reach new clients, it also comes with its own challenges and requires a specific skill set to succeed.

What is the cold calling process?

Cold calling may seem straightforward, but it involves a well-planned process to maximise its success rate. Here’s a breakdown of a typical cold calling process:

1. Pre-call research

Before making sales cold calls, it’s crucial to gather information about your prospects. Reps can use a B2B contact database, company websites, various social media platforms (LinkedIn is best from a professional point of view) and industry-specific directories to research the company or individual they’re contacting.

Having even a small amount of context can help establish rapport and make your initial conversation more relevant and engaging.

Here’s an example:

You need to cold call a VP of Sales in an enterprise company.

To do this, you’ve got to research and build a strong business case, and you can do that by cold calling individuals below the VP of Sales (who are going to be the ultimate end-user of the product) 👇

cold calling example of the roles under VP of sales.

Reaching out to different reps and managers under the VP of Sales can give you insights on issues within the sales team that require attention.

Talking to end-users about issues like missing targets or data quality can help you communicate more effectively with the VP of Sales or the main decision-maker while also emphasising the problem’s urgency.

Frida Ottosson, VP of US Sales at Cognism, loves the bottom-up approach for her team:

“I always advise my team on the bottom-up approach and cover topics like the organisation’s characteristics (size, industry), priorities, and what the team(s) below the executives are saying. This allows you to develop a super relevant message to the C-suite executive.”

Research of over 10,000 phone calls showed that individuals at the C-Suite level were the most likely to answer.

2. Preparation of a script

After identifying and researching potential leads, sales representatives should prepare a script or talking points outlining the key benefits of their product or service.

A cold calling script serves as a guide for salespeople to structure their conversations. A good script is flexible but provides a framework that helps a salesperson cover key points, ask relevant questions, and address common objections.

For instance, a script might begin with an introduction or opening line, followed by a value proposition, and then move to qualifying questions designed to assess whether the prospect could benefit from the offered product or service.

This preparation can help build confidence and ensure that the SDR conveys important information effectively during the call.

Here are a few of our best cold calling scripts:

3. The cold call

Once on the call, a sales professional will introduce themselves and explain why they’re reaching out.

Establishing a friendly and professional tone right from the start is essential, as first impressions matter.

This is often followed by a tailored value proposition or sales pitch highlighting how the product or service can solve a prospect’s problem.

However, B2B sales is open to experimentation. Sales leader Josh Braun likes to do something he calls “poke the bear.”

Instead of being very ‘sales-y’ and going in with a product pitch, you must arouse the prospect’s curiosity.

How do you do this?

You can get your prospects to think about their company and their processes.

Is their current process really delivering results for them?

Or can you show them a better way?

To start poking the bear, be comfortable with mirroring. Repeat what your prospects say back to them - sometimes, things that sound sensible coming out of our mouths sound ludicrous when coming out of someone else’s.

For example - if the prospect says:

“All my sales team manually find their leads.”

You can say:

“Your sales team find ALL their leads MANUALLY?”

You’ve spotted a problem the prospect wasn’t aware of!

Josh expands on his theory:

“You’ve got to get them to think differently, scratch their head and think ‘hmm, maybe I do need this, let me look into this some more’.”

Another effective cold calling technique involves asking open-ended questions, allowing prospective clients to share their challenges and needs.

This tactic, also called sales qualification, helps the rep determine whether the prospect’s needs match the solution they offer.

You don’t need to worry about progressing your cold calling lead down the sales funnel if there’s no fit.

4. Handling objections

Sales objections are common during cold calls.

Prospects may express disinterest, concerns about cost, or a preference for a competitor.

Successful sales teams prepare their reps with objection handling and rebuttals for calls.

For example, an SDR might address a cold calling objection by providing evidence of their product’s effectiveness, sharing case studies of similar customers, or offering a trial period to ease concerns.

At Cognism, we follow a five-point plan when facing objections:

Cognism's five point plan for handling objections.

Here’s how this works in practice. A prospect may say:

“I’ve heard your data isn’t that great.”

You can then ask them a question - like this:

“What have you heard about Cognism’s data?”

This is a very searching question, encouraging the prospect to open up and reveal their objections. They might say something like:

“I’ve heard it isn’t GDPR-compliant, which is very important to my business.”

In which case, you’d tailor your response by offering a solution like this one:

“Cognism is GDPR-compliant and registered with the ICO, the UK regulator. Our platform was designed in collaboration with a top-tier legal firm, and our patented AI verifies our data daily and in real-time, maintaining accuracy and compliance.”

You can then confirm by asking:

“Does that make sense?”

If the prospect says “yes, “you can move on to a new question. If they say “no,” you’ll need to explain further.

After analysing more than 10,000 cold calls, we discovered that our SDRs encounter these four objections the most:

The most common cold calling objections.

We coach our SDRs on one particular framework for handling objections like this:

Feel, Felt, and Found.

Feel - Open with empathy and make your prospect feel heard.
Felt - Show the prospect that the problem isn’t unique or exclusive to them.
Found - Tell the prospect what you’ve typically found to be the problem when speaking with others in the same position.

Here’s how it looks in practice:

“That’s super interesting and definitely a common issue. Typically, when speaking with others [insert persona/title here], I’ve found that they’ve also experienced the same problem…”

5. Close or follow up

If the call goes well, an SDR may close by setting a follow-up meeting, sending over additional information, or even beginning the sales process.

The first step for effective cold calling is to stay calm. Be assertive and clear about what you want.

Beyond that, here are three sure-fire tactics to reel them in:

Tactic one: Seeing the product

Tell the prospect that they’ll find more value from seeing the product in action rather than having you explain it to them over the phone. Ask them if they have time to see it.

Tactic two: Wasting their time

Suggest that your cold call is actually a waste of the prospect’s time. Wouldn’t they rather see a demo?

The dialogue might go something like this:

“Look, (first name), rather than me rambling on at you, would you be against seeing the platform over a 15-minute call? I could run personalised searches for you based on your target market and show you the quality and quantity of data we have.”

Tactic three: Offer a freebie

This tactic is a favourite of Outbound Sales Coach Ryan Reisert. He said:

“Offer the prospect something for free. It can be a workshop or free offer where they can come away at least learning something new or getting something they can immediately put into action.”

Here’s how this might sound at Cognism:

“Do you have any objection to setting up a 10-minute meeting where we can quickly build you an intent-based or trigger-based lead list and give you a free data sample to see how our data compares to what you’re using today?”

You should schedule a follow-up if the prospect isn’t ready to decide. This is important because many successful sales don’t happen immediately during a cold call but over multiple interactions.

6. Post-call review

After each call, reviewing what went well and what could be improved is beneficial.

Sales reps often track their cold calling metrics, including the number of calls they make, the number of answers, and the outcomes. A CRM system can help keep track of this data, making it easier to manage prospects and follow-ups.

Cognism has its own cold calling process based on years of research and testing by our SDRs.

It begins with steps to take pre-call and ends with post-call activities.

Right-click and save this infographic. You can refer back to it when building out your cold calling process 👇

cold-calling-process-cognism

Cold calling challenges

Cold calling is undeniably one of the most challenging sales techniques. Some of the main hurdles include:

1. High rejection rate

Rejection is a routine part of cold calling.

While cold call rejection can be discouraging for many sales professionals, building resilience and maintaining a positive attitude are essential to overcoming this hurdle.

Understanding that success rates can be low, but the more experience you have, the better you’ll become at refining your approach.

On average, only about 28% of cold calls are answered, with many going to voicemail or ignored entirely.

The good news is that the average cold call success rate is 4.82%, double last year’s rate.

So don’t be discouraged!

💡Here’s an article on how to stay motivated while cold calling that might lift your spirits.

2. Unqualified leads

One drawback of sales cold calling is that prospects may not always be a good fit for the product or service offered.

This is where pre-qualifying leads with open-ended questions becomes critical.

Pre-qualifying leads allow you to concentrate on the most interested customers, helping you prioritise your sales efforts.

This process will save your team time and energy in the long run because your cold calling efforts will be more targeted and focused on prospects who will most likely need a solution like yours for a pain point.

3. Time consuming

Cold calling can be a time-intensive process.

It often takes multiple attempts before a salesperson can reach a prospect, and even when they do, they may only sometimes get past the gatekeepers (e.g., receptionists or assistants).

On average, connecting with a lead takes three cold call attempts.

But if you have a prospect’s cell number, you can skip the gatekeeper and connect directly with your target prospect.

David Bentham, VP of GTM at DinMo, is a strong supporter of this:

“With mobile numbers, you will get the highest response rate. In terms of cold calling in the US, calling cell phone numbers is the norm, and while in Europe it’s less common, mobiles still do work.”

“Remember, you don’t have to use a mobile number for cold calling purposes in isolation. My team has seen great value in using this contact information for texting or voicemails.”

“WhatsApp is a fantastic tool to supplement your sales efforts right now, especially as they’re defining themselves more as a business tool.”

Looking for cell numbers? Why not test Cognism’s B2B data for the most successful cold calling 👇

“In Q4, 89% of the numbers called were valid. Cognism eliminates the stress of having the wrong number. The SDRs have pulled data from Cognism for every demo booked. For every deal closed, the AEs have used the database to pull relevant contact details to influence the deal.”

Read the full case study

Marc Parsons

SDR Manager

@OneUp Sales

Test Cognism’s Data

4. Negative perception

Cold calling lead generation is often associated with telemarketing, which many people find intrusive.

As a result, SDRs can face resistance even before they can explain why they’re calling.

Overcoming this negative perception requires careful, respectful communication and the ability to convey value quickly.

5. Regulatory and ethical concerns

In many regions, including the UK, strict regulations govern cold calling, especially in sectors like finance or insurance.

SDRs and their managers must know these laws to avoid legal pitfalls.

Which leads us to 👇

Is cold calling illegal?

Cold calling itself is not illegal, but various laws and regulations protect consumers from harassment and unethical practices. These rules vary by country and industry.

In the UK

Cold calling is legal but regulated by laws such as the Privacy and Electronic Communications Regulations (PECR) and the General Data Protection Regulation (GDPR).

These regulations limit companies’ use of personal data and contact individuals without prior consent.

For instance, businesses must avoid cold calling leads on the Telephone Preference Service (TPS) list, a service allowing individuals to opt out of unsolicited calls. Companies that breach these regulations can face hefty fines.

In the US

The Telemarketing Sales Rule (TSR) and the Do Not Call (DNC) Registry regulate cold calling.

The TSR prohibits certain deceptive practices, and the DNC list allows consumers to opt out of receiving telemarketing calls.

Companies that call individuals on the DNC list can face significant penalties.

Industry-Specific Regulations

Specific industries like financial services have additional rules governing cold calling.

For example, in the UK, financial firms are subject to Financial Conduct Authority (FCA) regulations, prohibiting certain types of cold calls related to investment products.

Ethical considerations

Beyond legal regulations, ethical considerations are important in cold calling.

Sales teams should respect prospects’ time and privacy, avoid aggressive or misleading tactics, and ensure they contact individuals professionally and respectfully.

Read our Compliance Guide for more cold calling best practices.

Cold calling resources

A cold calling guide can only include so much. If you’re keen to learn more about cold calling strategies or just looking for valuable tips and tactics, check out our resources below 👇

The ultimate cold calling software

Improve your cold calling game with one of the leading cold calling databases on the market.

Most sales reps spend 20% of their time researching prospects, and bad data causes them to waste another 30%. Cognism solves this with an extensive quality-driven database of mobile numbers in the US and the most complete data in EMEA.

Ready to start building winning cold calling lists? Click to test out data 👇