Cold Calling in B2B Sales: Right or Wrong?
No, traditional marketing isn’t dead.
With new digital innovations and trends, it can seem like telemarketing has no place in your B2B marketing strategy. But with social distancing and remote teams, it seems like cold calling is marking a comeback as a highly effective way to connect with prospects.
What is cold calling?
Cold calling is a form of prospecting where a salesperson calls a potential customer and tries to solicit business from them. Prior to this phone call, the brand and individual have had no interaction or visible expression of interest in the product or service. It involves reaching out to prospects who have not previously engaged with your company or shown interest in your offerings. The goal is to initiate a sales conversation, generate new leads, and ultimately convert prospects into customers.
Since the salesperson is essentially reaching out to a stranger with no access to any information or sales deck, it can seem challenging to close a deal through cold calling. However, cold calling remains an effective sales strategy when executed properly. A study on cold calling revealed that 69% of buyers accept a phone call from a seller, and 75% of prospects have attended an event or scheduled a meeting after a cold call. With the right approach, cold calling can open doors to new business opportunities and help sales teams connect with potential customers who may not have been reached through other channels.
Cold Calling in B2B Sales
As its name suggests, a B2B company sells their products or services to other businesses, while B2C businesses sell to customers. The B2B industry usually focuses on a smaller, more niche target market and clients with specific needs. These leads are more valuable and product-driven by nature. Sales reps also have to spend time nurturing connections with their B2B clients to create lasting and loyal customers. This makes cold calling particularly well-suited for B2B sales, as it allows sales reps to have personalized conversations, understand the prospect's unique challenges, and tailor their pitch accordingly.
Cold calling in B2B and B2C businesses are different. First, telemarketers have a higher chance of reaching out to B2B prospects, given the usual office hours. Unlike B2C leads, whose demographic factors are usually unavailable to the caller, B2B prospects are based on their company and type of industry. Given this information, B2B sales reps can tailor their pitch to give off a stronger argument for purchase. For instance, an edtech solutions provider can call up various schools, rather than having to cast a wide net. This ability to research and personalize the pitch based on the prospect's industry and specific needs is a key advantage of B2B cold calling over B2C.
Still, it can seem tough to connect with people who may not have heard of your brand, much less shown interest in your product. However, with proper preparation and execution, cold calling can be an effective way to initiate conversations with potential B2B customers. Key strategies include researching the prospect, crafting a compelling opening pitch, asking insightful questions, and demonstrating a clear understanding of their business needs and challenges.
Sloppy greetings, messy scripts, lack of follow-ups, inappropriate speech delivery, and failure to research the prospect are just some of the reasons that cold calls fail. To avoid this, it's crucial to have a well-structured cold calling process that includes thorough preparation, compelling scripts, and a plan for follow-up. Some companies engage the help of an experienced B2B cold calling service to ensure their cold calling efforts are executed effectively.
As with any marketing plan, strategy and execution are crucial to success. Deal success also relies heavily on your product or service and the industry you belong to. With that in mind, cold calling works better for some B2B businesses, while others may benefit from other lead generation strategies. It's important to carefully evaluate whether cold calling aligns with your specific business goals, target audience, and sales process. Factors like the complexity of your offering, the typical sales cycle length, and your prospects' preferences can all impact the effectiveness of cold calling versus other lead generation tactics.
So, what are some B2B business types and is cold calling right for them?
B2B SaaS (Software as a Service)
According to International Data Corporation (IDC), worldwide public cloud spending is projected to reach $500 billion in 2023, almost doubling what was spent in 2019. Among all cloud industries, SaaS services will capture the largest portion of this expansion. What this means for software companies is that the potential client base is increasing. With a growing market and the need to reach new customers, cold calling can be an effective strategy for SaaS companies to generate leads and initiate sales conversations, especially for more complex or enterprise-level offerings with longer sales cycles.
The demand will continue to grow as organizations look for a SaaS provider during a time of rampant digital transformation. Right now more than ever, the B2B SaaS industry should step up and invest their resources in lead generation, including cold calling as part of a multi-channel strategy. While cold calling may not be suitable for all SaaS companies, those with more complex offerings, longer sales cycles, and a need to reach decision-makers directly could benefit from incorporating it into their sales process alongside other tactics like content marketing, email campaigns, and leveraging existing customer networks.
A report by Revenue.io found that B2B tech reps make around 35 calls a day, as opposed to the optimal 60. Scaling the volume of phone calls a day opens up more opportunities to close new clients. However, it's important to balance call volume with quality - there will need to be thorough research, personalized pitches, and insightful questions to increase the effectiveness of each call. Simply increasing call volume without a strategic approach may not yield the desired results.
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Many B2B companies work on a subscription-based model, and customer loyalty is a high priority for B2B corporations. In such cases, cold calling can be an effective way to initiate relationships with potential customers and lay the groundwork for long-term partnerships. The personal connection forged through cold calling can help build trust and credibility, which are essential for retaining customers in a subscription-based model.
Because of the nature of the B2B industry, enterprises usually have to have a personal relationship with each of their clients. This is to get a deeper understanding of their needs, experiences, and pain points. Customer loyalty plays a significant role in business longevity. However, more often than not, companies are laser-focused on customer acquisition over other things like retention and relationship-building. Cold calling can be an effective way to strike a balance, as it allows sales reps to initiate personal connections with potential customers while also uncovering their specific needs and challenges, laying the groundwork for long-term relationships and customer loyalty.
Research has shown that acquiring a new customer can cost 5 to twenty-five times more than retaining one. For B2B businesses who engage in cold calling, it can be worth it to explore tactics surrounding retention, such as following up after an initial call, building a contact list, and nurturing relationships through ongoing communication and personalized support.
Marketplaces
A B2B marketplace, or a service platform, essentially brings together buyers and sellers of B2B products and services. Suppliers and buyers will do business on the eCommerce platform. As B2B eCommerce transactions continue to grow at a CAGR of 8.5% from 2021-2027, these thriving communities act as a network and trade point for B2B industry players. While digital marketing tactics like email and content marketing may be more scalable for reaching a large audience on these platforms, cold calling can still play a role in building personal connections and nurturing relationships with key accounts or high-value prospects.
However, business in the digital space hinges on scalability. Using digital marketing avenues, such as email marketing or SEO, can be a quicker and more cost-effective way to reach out to a large audience and get them to use the marketplace. Cold calling can complement these digital efforts by allowing sales reps to have more personalized conversations, understand specific needs and pain points, and build trust and credibility with key prospects or accounts.
Financial Services and Insurance
All businesses need insurance to protect themselves and their employees from liabilities and unexpected events. However, 75% of US businesses remain underinsured. It is important to reach out and tap into this opportunity to plug the gap. Cold calling can be a great way to do this, as it allows insurance providers to initiate conversations with potential clients who may not be actively seeking out insurance solutions. Since your buyers may not necessarily be reaching out first, sales reps have to spread awareness to gain potential clients. The personal nature of cold calls can help build trust and credibility, which is crucial in the insurance industry.
You may think that your leads don't want to hear from you, but that just isn't true. 57% of C-level executives prefer to be contacted by phone, according to the competitor articles. Since these are usually a company's decision makers, it is more likely that they're anticipating calls from suppliers and financial services providers. This highlights the potential effectiveness of cold calling in the financial services and insurance industries, where direct communication with key decision-makers is often necessary and expected.
Furthermore, since your target audience consists of companies across industries, you can rely on referrals to generate more leads and expand your customer base. Have an analysis of long-term customers, active users, and brand advocates, and reach out to them. This can be an effective way to complement cold calling efforts by leveraging existing relationships and word-of-mouth recommendations, which can help build trust and credibility with new prospects.
A powerful solution is to leverage automation tools like referral software to save time and get more accurate results. This can help streamline the referral marketing process and make it easier to identify and reach out to potential referrals, complementing your cold calling efforts. Combining cold calling with tactics like referral marketing and leveraging existing customer relationships can be an effective way to build trust and credibility with new prospects.
Online Education Course Providers
By rounding up institutions in your target segment, you basically have a database of prospects to reach out to. Especially with the prevalence of remote learning and higher education, online education companies are constantly on the lookout for robust systems to support their platforms.
Since your target audience is a largely niche segment, it can be worth it to explore each prospect and personalize scripts. Moreover, in 2020, US edtech startups raised a whopping $2.2 billion. As the B2B edtech solutions market grows, so does your competition. Cold calling can be an effective way to make a first impression and gain top-of-mind awareness.
Cold Call Your Way to B2B Success in 2021
In the digital era, it can be easy to overlook traditional sales methods. Don’t miss out on the chance to leverage cold calling tactics to expand your business and bring it to new heights.
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Sign up for a free trial of GrowSurf to lower your customer acquisition costs, increase customer loyalty, and save gobs of time.
