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Cold calling is a good example of the misalignment between the buyer's journey and the sales process in a lot of companies. This short video explains why.
In the last video, I talked about the “buyer’s journey”, the buyer’s process for making an informed purchasing decision. And I talked about how the B2B sales process should, ideally, be in alignment with the buyer’s journey.
Unfortunately, companies don’t always design their sales processes with that in mind. That means they are running inefficiently and leaving something on the table. We might be missing sales, or we are adding to the cost of acquiring customers.
So where does this misalignment happen? Well, there are some pretty typical places where it goes wrong. One of those is right at the beginning of the sales process. When I see cold calling as the primary means of lead generation in a sales process, I know there is probably some opportunity for improvement.
Now, I’m not saying that cold calling is always a complete waste of time. But I am saying that cold calling can be a waste of time. According to most studies, only about 2% of cold calls result in a meeting.
So how does that happen?
Let’s suppose that you are a salesperson in an organization that has a product with a great fit to its particular market. Even better, let’s say that you have an accurate list of contact details for potential customers. So, off you go, and you start calling.
Now, suppose you record and plot out the number of customers and the degree of interest they show on a scale from “No thanks, we solved this problem already” all the way to, “Thank goodness you called. I just realized I needed a solution like yours to my problem”.
So, it’s more than likely that the statistics are like Diagram 1. On the horizontal or X-axis is the degree of interest. And on the other Y-axis, we have the numbers of customers for that response.
What we typically find is that there are a few responses where the buyers are not interested at all. And we have a few hot prospects at the other end of the scale. But there is a great mass of buyers in the middle of the curve that are mildly interested in talking to you. I’m willing to bet that your experience of cold calling will match that pretty well.
Why are the majority so lukewarm? Interested, but not much.
Let’s look at this through the lens of the buyer’s journey. Where are these folks most likely to be when you call them? It may well be that they recognize they have a problem. They may even see you have a potential solution. But what if you are calling them before the buyer has acknowledged the problem? Or before it has become urgent. Whatever the case, the buyer has not traveled far enough through their journey. They may never actually get any further and never buy your product.
In other words, we have a mismatch between the sales process and the buyer's journey. You are asking your sales force to contact people who, statistically speaking, might have a genuine need for your product, but who are not ready to consider the purchase.
The problem is that the sales force’s time is taken up with these folks. When they meet someone on either end of the scale, it’s fine. Either they are selling to interested buyers. Or they move on quickly from the very uninterested. But your typical sales person spends most of their time trying to coax lots of these warm (but not hot) prospects to the next step.
Well, does this even matter? Isn’t this what we pay salespeople to do? Well, yes, but from a process point of view, this is a tremendous waste. Business Process Management is all about doing things efficiently and avoiding waste. Salespeople are an expensive resource. Why would you deliberately devote expensive resources to something that you know in advance is bound to produce a very low yield?
And yet many B2B companies continue to rely heavily on cold calling as their primary means of lead generation. You can justify it - provided that there is some assessment of the costs and the benefits compared to other methods of lead generation. But I don’t often see companies doing that.
Sometimes I meet business owners who just close their eyes to what they are asking and instead complain about how useless their sales people are. And that is something we can fix because there are more cost effective ways to generate warm leads for salespeople.
In the next video, we will talk about where there is an opportunity to generate warm leads, much more cheaply, at another point on the buyer’s journey. And how that will also reduce the need for cold calling. You can find that here.