I've frequently quoted the study done several years ago by the Kenan-Flagler Business School at the University of North Carolina. It concluded that 4 out of 5 B2B decision makers in the United States - that's 80% - absoutely, positively will not buy as the result of cold calling.
However, I've just learned of a more recent study done by the Keller Research Center at Baylor University, right here in Texas. This report is much more recent, and the numbers are far more astounding.
The study was based on a group of 50 experienced and qualified salespeople, who made a total of a whopping 6,264 phone-based cold calls over a two week period. And the results are far worse than even I would have expected. "Dismal" would be a compliment!
Here's how it turned out:
- 72% of the calls were outright rejections. People saying "no way," hang-ups, and so on.
- 28% of the calls were labeled as "productive." These were people who didn't hang up right away, showed some interest, gave a referral, asked to be called at a later time and so on. But what's most interesting is that the majority of the two week study period was spent working on and following up with this 28% of the list. The time that went into it was extraordinary, and very eye-opening when you see the final results.
- That 28%, totalling 1,774 calls, resulted in 19 - yes, that's NINETEEN - appointments. Out of a total of 6,264 cold calls made!
- The success rate of cold calls to appointments is 0.3% (based on the average closing rate of 20%, that would equate to just under 4 sales, from 6,264 cold calls).
Now that you've heard the horrific numbers experienced during the study, here is the conclusion drawn from it:
Experienced salespeople can expect to spend 7.5 hours of cold calling to get ONE qualified appointment!
ARE YOU KIDDING ME?
With numbers like this, coming from a controlled, scientific study done by a leading research university, why on earth would ANYONE continue to waste their valuable time cold calling?
I've always stated numbers that are several years old in my arguments against cold calling: That it averages a 1% success rate, and possibly up to 3% for someone who is very, very good at making cold calls.
But now we see that just the appointment rate - not the sales success rate - is a dismal, embarrassing 0.3%. Multiply that by the overall average closing rate of 20% in sales, and you're down to 0.06%. What a joke.
Is it any wonder, then, that virtually zero successful salespeople cold call anymore?
Cold calling became ineffective a long, long time ago. The uselessness of cold calling has been shouted from the rooftops by authors like myself, Jeffrey Gitomer, and many others.
Then came the Univerity of North Carolina study done several years ago, showing that only 4 out of 5 decision makers absolutely will not buy as the result of a cold call.
And now we have a recent study, done in late 2011 by a leading business school, showing that in today's modern, Information Age economy, a salesperson who is foolish enough to cold call will have to spend 7.5 hours cold calling to get just one qualified appointment!
This proves my long-argued theory that cold calling makes sales success impossible for one simple reason: TIME.
If you have to spend THAT much time cold calling just to get one qualified appointment (the key word here being "qualified"), then there's no way you can possibly make your numbers, consistently, month after month.
So do yourself a favor: Stop cold calling, and begin doing something productive instead. Go to as many networking groups as time allows. Get active on LinkedIn and learn how to use it. Offer to speak for free at Chamber meetings, Rotary and Kiwanis clubs, and other service organizations. Do ANYTHING other than cold calling - it's a huge waste of your time, and the numbers prove it!