Cold Calling: 10 Statistics Proving Cold Calling is Dead
“The Wolf of Wall Street” taught us that successful cold calling is the force that will drive your sales team to business success. A sales development representative (SDR) might even feel like a movie star when they successfully book a meeting after calling 100 phone numbers to no avail. The truth is that this romanticised picture of cold calling is what the vast majority sales teams still aspire towards, while the reality is strikingly different; after all, that movie is set in the ’80s.
Cold calling has long been the foundation of almost any SDR’s sales strategy. In the time when door knocking or calling someone on the telephone were the only available methods to contact a buyer, cold calling arose as the primary method of outreaching to prospective clients.
However, with new technologies, software and platforms making their way into every high-performing sales team, cold calling remains the basis of SDR sales tactics. And yet, why is WhatsApp more widespread than pagers and why is airdrop more commonly used than carrier pigeons? The answer is, times aren’t only changing, they have changed, and it’s time for SDR’s to catch up.
Jokes aside, cold calling is long due to an update, and yet, sales managers keep hiring more SDR’s to reach rising call targets. These same managers then find themselves constantly looking for ways to improve cold calling in the face of unsatisfactory targets, rather than finding new solutions.
If you’re a sales manager that believes in cold calling as the underpinning of any successful sales team, this might sound defeatist to you, so here are 10 reasons that show that it’s time for your SDR’s to try new alternatives to replace or at least bring some of the focus away from cold calling:
Only 1% of cold calls ultimately convert into appointments.
This poor conversion rate, found in a study Keller Research Centre at Baylor University, indicates that cold calling not optimised for today’s metric-driven business climate.
90% of top-level B2B decision-makers do not respond to cold calling anymore and this number is rising as more millennials become decision-makers.
This number is particularly relevant for B2B-facing companies, but that doesn’t mean that there isn’t a comparable trend in the B2C industry.
A cold calling lead costs 60% more than other methods.
It is estimated that almost one million sales professionals will lose their positions to self-service e-commerce or other alternatives within the next four years. Technological trends suggest that person-to-person cold outreach may not be as efficient as other alternatives.
It takes an average of 8 cold call attempts to reach a prospect and only 28% of those answers result in actual conversations and not instant rejections.
Considering the much lower success rate of cold-calls after the connect, it means that even when a conversation happens, it may not be a worthwhile return on investment. If one looks at the 0.3% appointment-booking rate and a 20% win rate, it would take 6,264 cold calls to make just four sales.
Cold calling lists are simply not accurate enough, and it may not be possible to significantly improve this accuracy.
The Keller Research Centre found that 55% of cold call targets will not answer and that 17% of contacts’ information will be incorrect. Zoominfo found that this is due to the fact that 30% of people change jobs, 66% of people change their title or job function, 43% of people change work phone numbers, and 37% of people change their email address within one year. Therefore, improving the information from these lists may not be possible, or take resources that will generate more return being spent elsewhere.
A cold-call is often an uphill battle, a HubSpot survey found that only 37% of prospects felt that SDR’s that made cold calls had delivered information relevant to their needs.
However, 75% of salespeople felt that they were very accurate and pertinent with their information. This could be interpreted as space for improvement, however, it may also mean that there is only a certain level of research that can be done before a call. Even more importantly, it may not be time-efficient to undertake the level of research that will lead to a successful call considering the incredibly low answer rates.
Sales development representatives are 4.2X more likely to gain an appointment if they already have a personal connection with the buyer.
Additionally, 84% of B2B leaders start their individual buying journeys through referrals, and nearly 3 out of 4 business executives have said that they prefer to work with sales professionals that have been referred by a network connection. Professional networks such as LinkedIn enable salespeople to initiate these connections, whereas emails and calls remain significantly impersonal.
According to Salesforce research, an average of seven salespeople are involved in a buying decision, usually taking five of them to agree for a sale to happen.
Consequently, this means that it is difficult for a cold calling sales development rep to reach the right person, and coupled with the low success rates it further points to the lack of efficiency of cold calling.
Millennials and Gen Z’s hate receiving cold calls and do not like engaging in cold calling.
As millennials and Get Z’s increasingly take management level positions, it is expected that phones will get answered less and less. It is common knowledge that these generations have a strong aversion to calling in general, so cold calling is predicted to become even less effective.
Only 20% of buyers said that salespeople added value to the transaction, 70% felt that salespeople are not prepared for the questions and 75% felt that salespeople didn’t have relevant examples or case studies to share.
These statistics about buyer-seller value point towards there being a missed opportunity to create better buyer-seller relationships and increase conversion rates. This is backed up by the Challenger approach to sales, which indicates that in 53% of cases the buying experience is the key driver of customer loyalty. One of the central drivers of this approach is for the salesperson to “educate” the customer and add valuable insights during the sales process. Statistics show that high performing salespeople were more than 2x likely to use a Challenger approach and more than 50% of all-star performers fit the Challenger profile in complex sales.
Companies must evaluate if their time and resources are best spent focusing on cold calling as the main part of their sales strategy or on other methodologies.
Overall, statistics show how the sales landscape has changed in recent years, and how decision-makers – especially younger ones – need to be approached via other channels which add real value to the sales transaction. For example, social selling may be a more effective way to create buyer relationships as no salesperson can be as well prepared for a cold call as a social selling touchpoint.
And yet, do not fear SDR’s, there are various alternatives to cold calling rising to prominence that are worth looking at to maximise efficiency.