Making the sale

Are the days of cold calling just about over? With privacy laws and new anti-spam legislation tightening up, is cold calling on its way out?
 
With the new Unsolicited Electronic Messages Act prohibiting the sending of unsolicited commercial messages via email and other electronic media, there has been renewed debate about the place of unsolicited “cold calling” as a sales strategy in today’s modern marketplace.

Most consumers would agree that receiving phone calls from people we don’t know, trying to sell us things that we don’t want or, even worse, turning up on our doorsteps is a far from enjoyable use of our time.

Aside from the time and inconvenience involved in taking these calls, cold calls are often accompanied by some mental stress and anxiety, unlike spam emails which can be dealt with at the click of a mouse button. For this reason, some would argue that unsolicited cold calls are merely the pre-internet equivalent of spam email – only far more intrusive.

Yet despite the opinions of those on the receiving end of cold calls, there is little doubt that for businesses without a retail storefront, cold calling has proven to be a useful and effective business development strategy. As far as marketing strategies go, it doesn’t come much simpler than just picking up the phone and calling someone you’d like to do business with or dropping by to introduce yourself in person.

What’s more, for those lacking the capital needed to invest in effective advertising campaigns or other business development programmes, cold calling requires relatively little in the way of financial outlay. Businesses are able to make up for a lack of financial resource by employing sweat equity instead and, for this reason, many businesses are built on the back of relentless cold calling campaigns.

It’s for these two reasons – simplicity and cost – that cold calling remains a popular business development strategy for many New Zealand businesses, not just cash-poor start-ups, but also small to medium-sized enterprises and many larger corporations, especially those selling business-to-business.

From telecommunications to insurance, software to advertising, sales managers and business owners throughout the country are exhorting their salespeople to get back to basics, to make more calls, and to “not take no for an answer”.

And here lies the problem.

The “basics”, strategies perfected in the 1950s and 1960s by door-to-door encyclopaedia and vacuum cleaner salesmen, then adapted for the telephone in the ’70s and ’80s, are strategies based on the markets and technologies of those times. What made them effective was the fact that they were new and different to the strategies being used before them and they, therefore, had the ability to cut through the various other techniques being used at the time.

Businesses were not only able to get their messages directly to potential customers but also differentiate themselves from their competitors with their then-unique marketing methods.

Now, however, with markets more crowded than ever, and after having already put up with several decades of cold calling, customers are being inundated with more and more calls from businesses wanting their custom. Thus a strategy that was once a novel and even welcomed way of informing customers about our products and services, is now viewed as an annoying inconvenience, regardless of how good our products or services may be.

It seems, though, that the tide is beginning to turn. There are increasingly frequent assertions from salespeople that their cold calling efforts are becoming less and less effective. And the growing popularity of “Do Not Call” lists in countries such as the United States and Australia, which prohibit businesses from cold calling those who have registered their phone numbers on the list, seems to suggest that cold callers are receiving an increasingly frosty reception.

Even New Zealanders are beginning to voice their discontent, with Privacy Commissioner Mary Shroff recently suggesting that the idea of a government-backed “Do Not Call” register was worth looking into and the Marketing Association of New Zealand’s voluntary name removal list receiving nearly 45,000 registrations to date.

But regardless of any external regulations that may or may not come to pass, businesses wanting to ensure that their business development methods keep up with our changing market must be just as innovative with their sales and marketing strategies as they are with their products and services.

The old saying, “the only constant in life is change”, applies just as equally in the fields of sales and marketing and businesses must choose between being instigators of change or waiting for it to happen around them.

Undoubtedly, the goal for every business is to get to the point where our brand and reputation have customers lining up to use our products and services. The question is, if cold calling is becoming less and less effective, what do we do in the meantime?

All business decisions must be judged on their return on investment. This means that so long as cold calling continues to produce a satisfactory bang for our sales and marketing buck, it will remain a popular marketing strategy for some time yet, and businesses will continue to do “what works”.

While this may be of little comfort to frustrated consumers, those businesses who do find a way to differentiate themselves from their competitors, not just in what they deliver but in the way they get their message out, will capitalise on a market thankful for the change of approach.