Cold calling
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Cold calling is the process of approaching prospective customers or clients, typically via telephone, who were not expecting such an interaction. The word "cold" is sometimes thought of as being used because the person receiving the call is not expecting a call or has not specifically asked to be contacted by a sales person. However, cold or cold market more appropriately explains that the call is a sales person's first time introduction to prospective customer/client, whereas a warm market call is to an existing client or someone known to the sales person, even if it is a referral, prior to the call.
Cold calling is often very frustrating and difficult for a sales person or telemarketer because, naturally, they are often rebuffed, hung-up on and suffer a higher rate of rejection by those receiving the calls. Business to consumer cold calls are often frustrating for the person receiving the cold call, since they expected upon picking up the phone to hear from someone they know and care about, and instead deal with a minor nuisance in the form of a sales pitch. Business to business calls are a more accepted method of introduction, but can still become a nuisance.
Some sales people have come to the conclusion that cold calling is ineffective, inefficient and a waste of their time. They then seek to develop techniques to lower the rate of rejection. And many forms of marketing and advertising have been adopted to augment cold calling or replace this task entirely. [1]
Those who are well trained be they sales people or those employed in telemarketing, know that their approach needs to be based on one of discovery, to uncover whether a suspected prospect is interested and therefore a qualified prospect they can follow up on. Thus they build trust and discover the truth about whether there is a good match between the potential client and product or services offered.
There are a number of ways in which cold calls can be effective. One is for the selling organization to start with a high quality, up-to-date database consisting of qualified prospects that they suspect will have an interest in the product or service being sold. Another is to use cold calls as a "step in the door", to simply make appointments. Face-to-face appointments require that the product or service must lend itself to such an approach. Clearly, low ticket sales would not be opened this way because a sales person cannot be sent over, for instance, to sell a newspaper subscription, there simply isn't enough profit in the sale to warrant adopting that set of procedures.
Cold calls can also be used to obtain quality sales leads.
Cold calls can also be done in person rather than over the phone. This type of cold call is also referred to as door to door. A number of advocacy groups such as PIRGs and Greenpeace use this technique to spread information and sell memberships at the same time.
[edit] Legal issues
Within the United Kingdom, the Privacy and Electronic Communications (EC Directive) Regulations 2003 make it unlawful to transmit an automated recorded message for direct marketing purposes via a telephone, without prior consent of the subscriber.
In the Republic of Ireland, the "National Directory Database" is an index of numbers that cannot be called for the purposes of 'cold calls' and/or sales and advertising.
Many US states have enacted "Do Not Call Lists" in which a consumer adds their telephone number to a list and telemarketers are not permitted to telephone any number on that list without prior permission of the recipient. It is similar to the US Do Not Call List which is managed and enforced by the FTC.
Within the European Union, the Data Privacy Directive 2002/58/EC forces the governments of its member states to issue laws until June 2007 that prohibit general cold calling. However, the directive allows both an opt-in or an opt-out model, i.e. requiring a national register for phone numbers which either to do (opt-in) or do not (opt-out) welcome cold calls.
