The Effectiveness of Cold Calling… On Foot?
Doyle Slayton | Jan 12, 2009 | Comments 20
Reader Q & A: I recently received a question about cold calling on foot from Anthony Goldie…
So tell me Doyle, what do you think about cold canvassing/good old fashioned door knocking businesses – I reckon there’s nothing better for building buyer relationships that last- I go out for 2 hours a day in my local area promoting and its made me a lot of money- also any hints and tips for improving-new strategies/thoughts for this style of presentation?
Answer: Let me start by saying… If it works for you, and you are exceeding plan… then keep doing it. If you are good, it can be an effective activity for those selling in certain industries.
As for my daily activity, “cold canvassing” is not something I do very often… maybe once or twice per year… to remind myself that the following 3 principles are true:
Principle One – Efficiency
I don’t find cold calling on foot to be an efficient use of my time. If I can drop-in on 10 prospects in two hours, I can do three times that much on the phone… making around 30 phone calls in the same time span. When I multiply that day-over-day-over-day, the phone and my trusty CRM are going to give me the best long-term results.
Principle Two – Productivity
I’ve seen a lot of sales people fall into this trap. Being “on the road” makes them feel productive and busy. Mixed in with all the prospecting come stops at the Starbucks, Exxon, a quick run to the post office and suddenly the day is gone with very little to show for it.
Some reps use it as a justification for ending their day closer to home. They will foot canvas on the side of their territory closest to home and when they feel they have done enough… it’s tempting and easy to call it a day.
Then there are those who decide it’s a great way to get familiar with their territory. I see it differently. The best way to get familiar with your territory is to set a ton of appointments… on the way in and out of the building… look around and figure out who you are going to call on next. That is a lot more efficient.
Principle Three – Results
I think this type of prospecting can be deceiving. Let’s say a new person joins your sales team who employs this type of “cold calling on foot” type of activity. If they are good, they will get some quick turnaround deals, one call closes, short sales cycle, non-complex type of stuff. Some managers will send big praises saying, “Look at what this newbie is doing… been here for a week and got their first deal!” The sales person gains confidence, and the borderline performers think they should employ the same strategy.
It results in smaller revenue generating deals, often around $500 to $2,000 in yearly revenue per deal… give-or-take a few hundred dollars. If your goal is anything over 200K, cold canvassing is not likely to get you there. That’s the trap. It sneaks up on you. You look back at the end of the quarter and wonder, “What happened? I’ve been so busy… working so hard… yet I’m not even close to plan.”
What do you think about “cold canvassing”… How does it work in your business?
Oh the irony of life… as I was writing this article, the doorbell rang. It was a young lady with her mother and sister… selling Girl Scout Cookies. She asked me if I’d like to buy some. “Absolutely!” I said, “I really like sales people.” You should have seen the joy on her face. She said, “You are the first person on this street who said yes…” to which I responded, “It’s the first yes in a string of 4 or 5 more to come… keep going girl!”
PDF Check Out These Related Articles!
Filed Under: Blog • Featured • Reader Questions • Sales
I personally think that both tatics should be used. I as my sales people to spend 1/2 of their time on the phone setting appointments and the other 1/2 cold calling, or warm calling, on the phone calls.
I agree; “walk-in” cold calling while sometimes capable of getting a quick hit will not prove out in the long run in $ per hour worked. It is much more productive to cold call on phone with a script targeted to your objective and a resulting appointment in most cases.
You don’t mention what type of product/services you are selling via cold calls. In high tech, most buildings have security readers on each door so you’d never get past the lobby with the temp admin at the front desk. Other businesses like various medical sales may have cold calls on a predictable rotation so while each specific call is cold, clients are aware you cycle through town approx. every 6 weeks. This is really an “institutional” sale just keeping your brand name in the forefront.
In my industry, walking in to the customer is part of most days’ routine. Yes, sometimes I’ll walk in and the customer buys on the spot, but that is not the norm. Typically I’m walkking in to ask for an appointment, something I can do on the phone. I like getting out though and walking in sometimes, but there has to be a mix of both for me.
As a specialist in referral and joint venture marketing I find that any marketing strategy that involves obtaining leads through referrals is a far more efficient means of gaining hot prospects to come to you. Referred leads are easier to close and at the best price and profit margin and they are more likely to be loyal and to refer you in turn, so there is a great repeat sales opportunity.
I personally hate cold calling and professionally think it is totally un-necessary in todays market place. Cold calling is a method employed by old style sales managers who have little idea of the huge sales and marketing ideas and strategies that are available to use. Cold calling telemarketing is more efficient and effective, but again I rate it in the long-term as a poor marketing strategy.
I have surveyed hundreds of businesses over many years asking what sales and marketing strategies worked best for them and all businesses stated that cold calling in any form was the lowest form and highest cost of all lead generation strategies they tried. When asked what the most effective sales and marketing strategies worked best, over 80% of business owners stated that the good old word of mouth referrals gained approx 70% of their business and the Internet was second.
I had a commercial fleet sale client who often went out call colding on businesses during quite periods, which always demoralised him. One of the ideas I suggested to him was to approach the managers of local wholesalers with deals where he would loan them of one of his demo vans in return for permission to park a couple of his commercial vehicles with a display stand near the entrance to the store on certain days of the week.
Two things happened i.e. he saw hundreds of his targeted prospects per day, they were more receptive to him and he made on average 4 sales per day. Three of the stores ended up buying some vehicles from him due to being impressed with the vehicles he loaned them. Due to this idea and a few other strategies my client increased his sales by nearly 300%, his hot prospects came to him and he never went out cold calling again.
Strategies like this example are more effective in results, time, commitment and ROI.
Cold calling – who needs to do it!!!
I heard a story last week about two salespeople challenging each other to do things out of their comfort zone, where they used the walk in cold call as the challenge. It was something neither of them did, so at each appointment they had that week they “challenged” each other to walk next door and cold call if they had never talked with that company before.
This was a great way to do something different and a little uncomfortable. Their results?
100% of the time they figured out by talking with the receptionist if the company fit their size criteria to be a prospect vs. suspect.
In the prospect pool:
1 of 10 = got in to see the right person
3 or 10 = made a follow up appointment
5 of 10 = got a name to call later
1 of 10 = nothing
HI Doyle- I guess it is industry specific as to whether cold calling is very effective or only so-so -I own my own business and sell business cards printing and signage so at least from the card point of view because im cheap on cards alot of customers buy those and then other things later-its worth thinking about having a super cheap promo item on your books as it can get you a many other sales of different products in your range as well-for example I have 280-300 regular customers who started from cards all from my own promo over 2.5 years and im working from home without a business premises or advertising of any kind so it sure works for me
HI Doyle- I guess it is industry specific as to whether cold calling is very effective or only so-so -I own my own business and sell business cards printing and signage so at least from the card point of view because im cheap on cards alot of customers buy those and then other things later-its worth thinking about having a super cheap promo item on your books as it can get you a many other sales of different products in your range as well-for example I have 280-300 regular customers who started from cards all from my own promo over 2.5 years and im working from home without a business premises or advertising of any kind so it sure works for me
Doyle,
I agree with you. I deal in six figure deals and door-to-door selling just won’t do it and help me make my quota. In the software industry, the decision-makers will not speak to you without a prior appointment, and speaking to a non-decision-maker is not productive. I can get more done on the phone.
Best Regards,
Mark Secko
Mantralogix
I enjoyed your post and advice, particularly “if it’s working keep doing it.”
I would be shocked however if many salespeople would say cold calling on foot is effective. As one of your comments mentioned, if you “drop in” on prospects that are near or adjacent to sales calls you have secured, I could almost agree they may be of value.
Here’s my challenge; have you as a consumer ever bought something from someone cold call selling you on foot? No the girl scout cookies from your neighbor’s daughter does not count as it was not a “cold call”, you knew the young lady, her dad, and you hope that if you buy, her parents will reciprocate when your little darling has to sell snicker doodles next month. I’m talking about the sales guy knocking on your front door during dinner…how does that work for you as a consumer? What feeling did that experience leave you with about that company? Innovative? Old school?
What you are doing when cold calling on foot is interrupting, not selling. Want to hear me rant? How does it feel when you are in your doctor’s office for an appointment scheduled for 10:50 am, and a pharmaceutical rep starts flirting with the receptionist in hopes of dropping off some new note pads, pens, and a coffee mug, for a chance to speak to the doctor? Then the receptionist tells you the doctor is ready at what is now 11:45 am?
If you are canvassing a particular market, why not make a call and ask if it’s OK to stop by. Why not do a little research with the free tools available today and send the prospect an email, an introduction, maybe some content; an article or whitepaper, and ask permission to stop in when you are in the neighborhood?
The days of cold call sales on foot are over. If you have to cold call on foot, call or email ahead to make it somewhat warm.
And oh by the way, if you are forced to ask your salespeople to cold call, this is a NEON SIGN flashing… “MY COMPANIES MARKETING SUCKS.”
Canvassing can be a very effective way to find new business if your product or solution fits that mode of activity. In a good canvas visit you will learn the gatekeepers or receptionist’s name, who the decision maker is, get the right contact information and leave some information for the decision maker and even possibly meeting the decision maker (although this rarely happens).
You now have some great information to start developing a relationship with the prospect or suspect. You should develop a Best Practice for several follow up phone calls, now that they know you, to set up that critical initial meeting where you can learn more about the prospect/suspect and they can learn more about you.
Many people who struggle with telephone prospecting use this as a way to help them be more effective at telephone prospecting. You now have valuable information that should make calling onto the suspect more comfortable for the caller and a good start for the beginning of developing that all important relationship.
It is important to have a good follow up phone Best Practice to the canvass visit to maximize the effectiveness of the canvassing program.
Doyle -
I believe what you are saying to be true. I have been in sales for 7 years and found the hill-toe express to be the most challenging. I find that sales with door to door canvassing have a short sales cycle and an even shorter customer loyalty. I did merchant services and clients changed their merchant every four to six months despite penalty.
I agree with Hope. Sales with door to door canvassing has a high likeliness of failure over the long term (if your measure for effectiveness is long-term growth).
I guess when you are selling for your own business the perception of success is different from that of an employed salesperson-Having been on both sides of the desk I think any decent salesperson who has any business sense is wasting their time making money and targets for others-you have to remember not only can you make the same or more as a salary with less tax you also are purchasing the equipment you are making the sales from from-machinery etc.
so are you just a normal salesman or an entrepreneur THAT IS THE QUESTION!
Why should a salesman be on the road, when their potential customers are on the Internet – even on the company website?
Most B2B deals start with an Internet search.
Get a web service that reveals the company names of the website visitors and know their interest by the pages visited.
Qualify these visitors on the company information, geography and interest shown.
Then cold call on “warm” companies.
WOW what a great thread. YES COLD CANVASSING IS THE BEST. I may not be able to set up a meeting on that day with the prospect I want. But the amount of information you can get from the lobby of the business is invaluable. The Icons of what they are proud of as a company is usually displayed in the lobby. After I visit a lobby I know just how to spin my pitch. You can do all the research you want on-line about the company but to step in the office space gives you a real perspective as to the spirit of the company. Before 9/11 I use to ride the elevators of the skyscrapers of Boston and drop off literature. Then come back to the office and develop a game plan.
Great discussion… I have mixed feelings on the subject. It depends on where you go. I recently called on a high school (fundraising sales) 4 times and have not been able to book any business. Then, last week, my company mailed a package and sample, and voila the phone rang. Generally, walking in and dropping samples seems to be the best way in this business. However, I am feeling that an appointment with my target makes the call more friendly and meaningful. In the end, I believe calling first and finding your decision maker makes better sense and I have definitely booked more business this way overall.
Here is the problem. Every industry is different. I have been in some where you would never waist time pounding the pavement. However, right now I’m in one where I require my reps to do 50 face to face cold calls per week. The reason they need to, is that in this situation it is faster to get to the decision maker if you walk in. The trick is how and what you say to the gate keeper.
Cold canvassing works however it is not your BEST tool. It works if the company is next door to somewhere you are already going or if you are in an area with small businesses that might now be available to research on the internet. People say they don’t have enough information to just walk into a company and that you should research first. However, how often do you write a company name down on a piece of paper and either lose that paper or never fully research the company. If you see a company that might have potential walk in. Don’t plan your day around it, but use it to your advantage.
If you sell a one time product or high dollar repeat business I found its better to get to the decison maker, setup a meeting and prove to them what the product will do to benefit them and/or save them money. If there is tremendous benefit the company will buy, even in this economy.
Now to those who say that door to door marketing doesn’t work. I completely disagree. Maybe it didn’t the first few months or weeks so the towel was thrown in.
It is all relative to the product you sell. We’ve built a business that continues to grow year after year with consistent customer usage and ongoing repeat sales strictly from canvassing door to door in the evening. People are aware we are coming as they know it in advance.
Doing nearly 200 cold calls a week, maybe 2 out of 200 we visit are rude. The rest are ok with it. It does work and it doesn’t take but a few hours a week. It’s all a matter of how you manage it.