7 ms·

How cold calling (properly) works better than AdWords

187 points by rgraham 15y ago

startupstella 15y ago
great article. we ran an experiment over the summer with cold calling as well, as many people thought it would be a successful sales strategy for us. being in the payment processing world, we knew business owners were constantly being cold called and most likely did not want another point of contact. however, we wanted some data to show people who made that suggestion in the future. our hypothesis was correct: our conversion rate was nill, even when tinkering with the sales script. i think the variation is due to the fact that the target customers in this article were not as heavily cold called as our target market. so, it made them more open minded. here's a link that shows our data: http://feefighters.com/blog/950-and-1500-calls-tales-in-telemarketing/ http://feefighters.com/blog/950-and-1500-calls-tales-in-tele...
- ericabiz 15y ago
  I agree with the two posters who've already replied; your strategy didn't work not because cold calling doesn't work in your niche, but because your pitch was mediocre at best. (I also know personally someone who built a big merchant account business from cold calling, so it IS effective in your industry.) Take a look at this book: http://www.amazon.com/gp/product/0470567023/ref=as_li_ss_tl?ie=UTF8&tag=ericadotbiz-20&linkCode=as2&camp=217145&creative=399369&creativeASIN=0470567023 http://www.amazon.com/gp/product/0470567023/ref=as_li_ss_tl?... -- it's the best book I've ever read on cold calling, and is helping me get over my fears about it (I plan to start a big cold calling push in January.) You'll quickly see the difference between your pitches and the ones outlined in the book. And I also recommend that you do cold-calling yourself instead of outsourcing it. You'll learn a lot more quickly that way. Once you have an effective script, then you can outsource.
- veesahni 15y ago
  The OP made the call as a founder who deeply cares and is trying to make a connection with the person on the other end of the line. In your experiment, the calls were being made by staff of a third party, which raises concern as to whether the caller is interested, speaks with appropriate animation and can evoke needed interest and emotion by the receiver of the call. Furthermore, I don't think the value proposition of your scripted pitch was significant enough. The OP went out of the way to try to create a valuable win-win scenario without it sounding like a sales pitch. If I were on the receiving end of your script and didn't know of your organization, I'd assume the ebook would be filled a bunch of fluff and a hidden sales pitch for your product. Potential value for information that I couldn't just otherwise find on Google is low.
  - startupstella 15y ago
    Those are great points, but the question becomes a matter of the stage of the company. Clearly, the author still benefits from making cold calls, whereas in most cases, this starts out as a reality but becomes less and less as the company grows. Also, we know our ebook is a potent conversion tool. I think it stills comes down to the question of industry marketing practices: we've found inbound marketing to be much more effective because of the saturation in cold calling.
- vidarh 15y ago
  Those are absolutely horrible pitches. I'm surprised they didn't bomb worse. My first job was to cold call on behalf of a charity for the blind, and I've also done a telesales job for short time, and got training in it. First thing we learned the first day in both jobs was the way of structure a call to get interest. There were of course big differences, but a few very significant common takeaways. Incidentally there's a lot in common with this and being a good conversationalist or even generating attraction: * You need to offer value. That means, you never ask to get anything off the bat. On the contrary, you seek to get them to feel that you're going to offer value. * You set up drama that they want resolved. E.g. you offer insight about some situation that is emotional to the listener. For the charity for the blind, this was of course about creating sympathy. For the telesales, it was about describing some scenario that corresponded to a need the customer felt strongly about, such as spending more time helping their children read (the company sold children's books). * You get the listener invested and hopefully make them contribute details to the scenario from their own background; e.g. explaining the problems with their business, for example, and starting to look for ways you can help them. * You make statements that gets implicit buy-in from the listener unless they object. People don't like to object, and if this is done subtly, people will find themselves accepting your statements even when they initially disagreed with them. * Then you give the customer hope that you can help them make things better. You've established yourself as having high value to them. If you do it right they will ask you what they can do or how they can buy your product. The overall structure is to start on a friendly high note, create drama and tension and bring the emotions down, then resolve the tension and offer up a solution while bringing the emotions up. Think Hollywood tear-jerker. The scripts you quote on that page fails in that they don't set up a conflict or any tension that you can resolve for them. Just some bland statements about "cutting the nonsense". I'd have done something more along the lines of "I'm sure that like lots of other [small,big, type-of business] businesses (implicit buy-in to your statement, putting them in a group they identify with), you've been hit with chargeback fees that were totally bogus [addressing a conflict] and have had to fight with your processor to recover funds and (more similar stuff)... (ask how it's impacted their business, and show them you sympathize). What do you think you can do about it? (listen to their feedback). Well, we have a report that helps you solve some of these problems. (wait for them to ask what it costs) We'll e-mail it you for free." On top of this, voice, intonation and the level of excitement you manage to project makes a massive difference - the biggest problem in the training at both jobs was to go from sounding like you read from a script (because you did) to projecting well enough that you came across as believable. In my own experience, this latter is so much easier when you call yourself, rather than outsource it. (EDIT: fixed formatting)
username3 15y ago
Wasn't there another article like this?
- rgraham 15y ago
  Yeah. This builds on http://bit.ly/oeZDzC http://bit.ly/oeZDzC.
deleted 15y ago
[deleted]
DanBC 15y ago
I really like two things about this article: 1) His approach would have worked with me. One job I had, I used to have to filter calls from everyone trying to get through to my boss. Polite honest quick callers got the chance to mail details, or let me web-search their company. But the amount of pushy idiots! Some of them really gave "their" product a bad name. Scare quote around their because unlike the author in OP these sales people were just low-wage employees of some big company. 2) Some aspects of the job are easy. (Coding.) Some are going to appear really hard, but you just have to do them, and learn as you do them. (Selling, to real humans, face to face or over the phone.)
chops 15y ago
I have to express similar experiences with the blog post. While I have Adwords experience for 5 years now (with my MMO guild hosting system), with my newest offering (Plug: Sports League Management - http://www.bracketpal.com http://www.bracketpal.com), I knew that I'd be facing a much more established market with higher PPC and I'd be up against more established players with bigger budgets. So, I faced my fears[1] and began a sample of calling Volleyball leagues in the Milwaukee Area, expecting rejection after rejection. So far, it's proven to be well worth it. Not knowing how to structure these kind of things, I pretty awkwardly and directly opened with something like: Hi, My name is Jesse Gumm, I'm a software developer in the Milwaukee area and I'm in the process of getting a new product off the ground for running sports leagues, with a particular emphasis on volleyball leagues. It was used to run the leagues at Bradford Beach this summer, and I was wondering if you would be willing to sit down with me for a few minutes to try and see if maybe this would be a good fit for your company. That (terrible) pitch landed me around a 60-70% success rate for setting up meetings, and of those, the majority of them sound like they'll be buying from me this coming summer, and at the very least, has turned into referrals for other leagues and other sports (since I'm much more active in the Milwaukee volleyball scene, it helps getting those referrals for other sports for which I've very limited information). I'm gearing up for a massive cold-calling spree (just finishing a few critical features for a few Winter leagues I've got lined up), making an effort to call every volleyball league within 200 miles to see if they'll set up a personal meeting, before I start calling to try to sell the (what I think will be much harder to get) remote-desktop meeting. The article above and (the article linked in the comments: http://news.ycombinator.com/item?id=3234286 http://news.ycombinator.com/item?id=3234286) looks to be extremely valuable towards getting a better success rate, and is consistent with what I've been reading in sales and cold-calling books, regarding the success rate of setting up a conversation to find out the prospects pain points before pushing a product in their face. [1] And fears they are. I have to psyche myself out before every call, despite the fact that all of my calls have been pleasant, and most of them have produced meetings. And after the call, while I'm energized to launch my product and work, I still have to psyche myself out AGAIN for the next call. It's really a difficult thing for me. I'm definitely not the kind of guy that approaches someone at a party and strikes up a conversation.
- 15y ago
narag 15y ago
software for deer management Software for... what? Is this some kind of idiom or is it some kind of wild animals control? Please, could anybody drop a line of explanation?
- rgraham 15y ago
  Whitetail deer hunting is a 6+ billion dollar industry in the US. Many ranches sell hunts on enclosed ranches for trophy animals and you pay a sliding scale of how good a trophy you kill. This is so popular that many people are getting in the business of breeding deer to sell to other breeders and those ranchers. There is still a lot more demand than supply. On top of those segments, there are many hunting clubs and individuals with land that wish to manage the animals responsibly or in accordance with state guidelines in exchange for special privileges and tax breaks. All of these people need record keeping and analytics to measure what they are doing and report it to their state.
  - narag 15y ago
    Thank you, very informative!
EponymousCoward 15y ago
He addresses scale but only scaling up. What he neglects to realize is that AdWords et al are elastic, if I want to get 10x impressions over the weekend I can do that. With cold calling, not so much...
- jacquesm 15y ago
  This is not true in all cases. Adwords has plenty of niches where the number of clicks per day is very limited, no matter how enticing your ad. If you already have a good idea of who your customers are the shortest path to those customers is likely a much more direct one than waiting until they happen to see your ad and click on it.
- rgraham 15y ago
  You can train a few people and pay them per conversion. It's easy to get a list of numbers from a service like Hoover's for free at your local library.
tptacek 15y ago
Scripting the cold call and iterating on it like it was a Google Adword ad is such a simple idea, but it had never occurred to me. This is a great, great post, one of the more useful things that's hit HN in the past few months. I don't know what it is about the Smart Bear blog, but man, it's one of the only things that hits HN regularly that I find myself sharing with non-HN people. I would love some more discussion about better cold-call call to actions. I feel like my particular market, while way better addressed by calls than Adword ads, already has its hackles raised on the prospect of being linked to a blog. What else has worked for people?
- rgraham 15y ago
  I've also tried whitepapers or ebooks with limited success. On the phone, people often assume they are marketing pamphelets and hold no value. I have had success with inviting people to educational lunches with catchy titles. Name dropping competitors you are speaking with is something you can try to pitch attendance. The effectiveness of that varies by market. I think educational marketing works...you just need to find the right vehicle. I highly recommend Chet Holmes's 'Ultimate Sales Machine.' Depending on your price point and geography I think simply setting up a meeting is a great first step. Most businesses are secretly relationship businesses. Taking an interest in a set of ideal customers and really building a relationship pays dividends in my experience. edit: Thanks for the kind words. I am happy to chat about it. I hope more people take something away from it. Forgive me for losing focus and not putting the thank you in the original comment.
- JoachimSchipper 15y ago
  I'm sure you know more about your business than I do, but the "enterprise" equivalent of blog links seems to be something like https://www.microsoft.com/casestudies/ https://www.microsoft.com/casestudies/. Of course, security is somewhat hard to capture in a catchy headline. "Widgets Inc.: Custom Fuzzers Catch 20% of Post-Release Bugs"?
Causification 15y ago
The revelation you're dancing around is that advertising, at least 98% of it, is based on a fundamentally broken concept: trying to sell something to someone who would probably be better off not buying it. Advertising currently works by slapping the largest number of random people and making them decide whether buying the product is a good decision. "Evil" advertisers try to deceive potential customers and be intrusive, while "good" advertisers try to selectively target and give potential customers tools and info to accurately judge the product. Those are steps, but the system is still broken. What Jason is hovering around is that the producer has as much theoretical responsibility in the customer-business interaction as the customer does. All human interaction must in principle be voluntary, and the winners are those businesses who take the basic interaction between two people and scale it upwards. YOU are just as responsible for finding the customers as the customers are for finding the product. That is the model the industry must adapt to, because people, especially intelligent people, are resistant to advertisements. And why shouldn't they be? Someone who tries to convince you to make a bad financial decision deserves an equal amount of scorn regardless of whether they know enough about you to judge whether you should buy it. If they do know, then they're malicious liars. If they don't, they're insulting you by saying their time is worth more than yours. Advertising is broken. You fix it by taking equal responsibility by only attempting to sell to people for whom you expect the sale to be mutually beneficial. It may be uncomfortable to think about, but looked at objectively, advertising as a whole is a long stream of invitations for people to screw themselves over and the unsaid assumption that it's the buyer's responsibility to make sure the raft they get on isn't the one going over the cliff. That is broken. Fix it.
edash 15y ago
This passage alone was worth the read: I decided I would offer to write them up on my customer-focused blog in return for a tour of their facility and a short interview. It gave me blog content, a personal chance to add customers, and a way to learn a lot about my prospects. It gave them some traffic, a relevant link, and a blog mention they could point to for social proof. He contacted people only after doing research and asked if they wanted to be featured on his blog. He gave value first and built connections. This isn't a story about cold calling so much as a story about how relationships, and by extension business, work.
tomkarlo 15y ago
One of the biggest problems here is that $150 is far too small an amount to test Adwords for a b2b situation (generally, low conversion / high value per customer.) If he's figuring on a $50 or so cost of acquisition when optimized, he's going to need to budget at least $1,000 or more (that's just _20_ conversions) to even start figuring out if Adwords will work for him. Cold calling makes sense, but he's comparing apples to oranges in saying he didn't get sales via adwords but he's getting leads via calling. He's spending an order of magnitude more at any reasonable conversion of time to money, and he doesn't know yet if these cold calls are going to convert, either. It's just that it's "cheaper" to do because he's not paying himself to do it, whereas AdWords is cash out of pocket (a valid issue but not one he's making.) If he tested Adwords and found a formula that worked to create conversions, he'd have a scalable solution. Even if he gets great at cold-calling, it's unlikely he'll have a scalable solution unless he intends to hire a raft of salespeople (who will probably not be as good as he is as selling the product, and who have to be paid.) It's entirely possible this is simply not a product that will do well on SEM, because people aren't actually out there searching for it, while potential leads are relatively easy to obtain and call. That's true of a lot of middleware products. But it might also just mean you haven't figured out what your target users are out there searching for (i.e. maybe not "Deer Management Software", but instead things like "Hunting Rifles.")
- rgraham 15y ago
  These are all good, valid points. For my specific situation spending $1000 to get 20 conversions didn't make mathematical sense. I spent several hours cold calling to get my first 10-15 conversions and if I paid myself for that activity it would certainly be far from 'free', but you are missing the main point of the calls. Personal attention creates relationships. These people talk to each other. Relationships matter to them. Those calls paid dividends beyond individual conversion. Besides that, there isn't a way to create an AdWords formula for every product X and market Y.
  - tomkarlo 15y ago
    That's true, but it's not mutually exclusive. Lots of businesses use Adwords to generate leads that are then pursued using phone sales, and it also means you're no longer making "cold calls", because you're calling in response to a request. Adwords doesn't always have to funnel directly into a checkout. I'm also not sure how you're defining "conversions." Do you mean people being willing to meet with you, or are you saying you had 10-15 sales from the cold calling (cash in bank account.)?
danielhodgins 15y ago
Very useful follow up to your previous article on 100% conversion rate cold calls. Thanks! By the way, how did you hear about your deer management niche?
- rgraham 15y ago
  I grew up in Texas. I've been hunting and fishing since I can remember anything. When I couldn't walk through the marsh because I was too little for the sucking mud I'd float on top of a mesh bag filled with plastic duck decoys.
aresant 15y ago
"It won’t scale." That's not true. If cold-calling doesn't scale it's usually the underlying business that's not going to scale, not the method of marketing. Marc Benioff (Salesforce CEO) built his company around "inside sales" which is essentially cold-calling with a fancy wrapping. A recipe to scale cold calling for an entrepreneur is: a) Get very specific about who your customer is, and how you're finding them. For instance if you're selling small business websites to dentists maybe that's "go type in "dentists" on Google, and see who's advertising, and then click through and hit the "contact" button". b) At scale you can then pay somebody else to do the work for you, large list brokers like InfoUSA have millions of consumer and business records for you to reach out to. c) Get caffeinated, find your courage, and pick up the phone to start placing phone calls. d) Based on your interactions build yourself a script (or at very least bullet points) that gives you an outline of how to contact the customer including FAQ that you encounter. e) Build with the end in mind of bringing in your first "inside sales" person. You want to literally turn over a handbook of how you're working this process. Throw out a juicy commission on orders, and then rinse and repeat. This takes work, but it's an extremely efficient way of building your business particularly for B2B.
- smartbear 15y ago
  Great point, well made. To counter-point, for some businesses, the cost to acquire a customer even with the efficiencies you describe is still too much. For example a consumer product that's $99 per year with 50% gross margin needs acquisition costs lower than even your plan will provide. In that case -- which is common in high-tech startups -- cold-calling can still be an effective way to start, because the learning you get is more valuable than revenue at the start. Still, more companies could succeed with your strategy than who are willing to try, and you're right they're missing out.
johnohara 15y ago
Hi, I’m Robert ... I am looking for a few people to visit, tour your facilities, and talk with you about your business. I can then write up the experience and link you up on the blog. I'd be inclined to think you were stopping by to case the place which is why professional networking is so important. Not fool proof, but helpful nevertheless.
quanfucius 15y ago
Does cold calling produce better conversion rates than emailing? What are everyone's thoughts on this?
- rgraham 15y ago
  The answer to nearly any marketing question is 'it depends.' My experience in a couple of markets suggests that it does for me. You will have to test it for your context.
  - HeyLaughingBoy 15y ago
    You also have to consider that emailing to non "opt-in" targets can run afoul of CAN-SPAM.
tnicola 15y ago
Like AdWords, cold calling has its place. I am sure that cold calling about deer hunting was more effect than Google AdWords, as (forgive the stereotype here), I am assuming, your audience preferred high touch and is not all that tech-oriented. I would like to see the effect of cold calling vs. AdWords when you are marketing an app for an urbanite and cold calling in a major city, like New York or Chicago. Your pitch may be carefully crafted, but between people like myself who'll hang up before you reach your first breath intake point and Do Not Call Lists (in Canada), I think that the success of your marketing campaign was a little circumstantial.
- rgraham 15y ago
  I think the success of (nearly) every marketing campaign is circumstantial, but your points are valid. Marketing is highly dependent on context.
mattmanser 15y ago
I was looking around your site trying to find your products: http://whitetailcensus.com/ http://whitetailcensus.com/ http://www.mywhitetailscout.com/ http://www.mywhitetailscout.com/ One of them doesn't even seem to have a stylesheet or a single picture or video of your product. Sounds a cool product but I have no idea how hard it is to use. Is it like facial recog software? The other, the scout product, the 'reasons to buy' are the worst I've ever seen. And I still don't know what you're selling! But it has rapid record retrieval. Wow. Marketing 101 man, that's not a reason to buy, customers don't care about that. I didn't want to be negative but on the other hand I honestly think you could do more harm than good with this article. Firstly it seems that online selling is not at all your forte. Let me be frank, you cannot write marketing copy. Worse you've presented yourself disingenously, as if you had some skill with adwords, I thought I understood AdWords pretty well. I even worked on the AdWords API team as an intern at Google. What has working on a technical product at Google got to do with writing marketing copy? Quite obviously nothing. Secondly, cold calling can be a very expensive way to acquire customers. And you've hand waved your way through it. You converted them because you drove out there and sold. At $29.95 a year, the price you're listing one of your products, you cannot buy a list of phone numbers, call the customer and then drive out and visit them and still make money. The premise behind the article seems a great way to validate your ideas, but that's not what adwords is for. Adwords is for selling. And you haven't mentioned any sales costs associated with the phone process in the article. The fuel? The time? Having worked in industries where we did buy leads, the mortgage industry, it was £75 a number. They weren't even cold and we still had a conversion ratio of 1 in 10. Could you make money paying £750 per customer? Our product sold for £2500 so it was worth it. And say you go b2b instead, companies give away their numbers on websites all the time. Can you get to the decision maker in a couple of minutes? Or are there barriers? Overall I just think this article is badly titled and you shouldn't have mentioned adwords at all. This is a great idea for getting to know your customers. For selling, I doubt its benefits. I want others to think, is cold calling really worth spending your time on? Can you actually afford to?
- rgraham 15y ago
  You're right. Something is wrong with the Census site, but there are images on the tour page. I'll take a look. The Census product uses Mechanical Turk to recognize deer in trail camera photos and determine herd statistics using capture-recapture. You upload images and get emailed results. That is it. I never managed to sell the Scout product online. It is incredibly bad marketing copy that I modified from some examples I found around the web. Any sales of that product required calls or in person handling. I did best at a trade show. There is no online audience I could reach for it. I underpriced the product and marketed it poorly. I found some success in higher-touch sales, but you are correct that the price point needs to support that effort level and you should target your market accordingly. That particular product also has an entrenched and highly likable competitor. Phone numbers (business listings) from a service like Hoover's are free at your public library. You're also correct that working on a technical product has nothing to do with writing marketing copy, but I'll bet that not everyone in this audience knows that. Hopefully my story lent them some perspective. I'm working on another product at the moment. I wrote the article about my experience developing those products hoping that people would think about what might work for them and be open to ideas that aren't commonplace. I'm glad to have your perspective as it may help everyone consider their options from every angle.
Timothee 15y ago
I'm planning on going "out of the building" very soon and go talk to some potential users, so the part about refining the opening phrase is very useful. It won't be cold-calling but going to talk to people on the street so I'll be interrupting them somehow, so I'll have to pay attention to what works and what doesn't… On the "this does not scale" part, this is a recurring theme: Alexis Ohanian commented with multiple accounts at the beginning of reddit, IIRC Facebook was getting the class schedules more or less manually, Airbnb's CEO slept at many people's homes to understand their needs, I believe the guys at Quora were answering questions themselves, etc. This doesn't scale but it gets things moving and you learn what really works.
dkokelley 15y ago
"At this point in my company it was far more valuable to land a dozen orders... This part doesn’t need to “scale,” it just [needs] to happen." A thousand times this. I think this is the biggest takeaway from the article. I think as entrepreneurs, we see something both scary and mundane like cold-calling and think "I don't want to do this. There's no way I'm going to make $1MM+ calling people from the phone book." I know I suffer from this frame of mind, and the above quote is a good dose of reality.
js2 15y ago
A successful entrepreneur I know impressed upon me once the importance of just picking up the damn phone. He wrote about it here: http://www.mcstartup.com/blog/2008/2/23/ive-got-an-idea-should-i-use-an-invention-submission-service.html http://www.mcstartup.com/blog/2008/2/23/ive-got-an-idea-shou... and here: http://www.mcstartup.com/blog/2011/8/13/where-do-i-start.html http://www.mcstartup.com/blog/2011/8/13/where-do-i-start.htm... You get the idea...
joelrunyon 15y ago
Couldn't there be a complementary article titled "How Adwords (used properly) works better than cold calling?

187 points by rgraham 15y ago

great article. we ran an experiment over the summer with cold calling as well, as many people thought it would be a successful sales strategy for us. being in the payment processing world, we knew business owners were constantly being cold called and most likely did not want another point of contact. however, we wanted some data to show people who made that suggestion in the future. our hypothesis was correct: our conversion rate was nill, even when tinkering with the sales script. i think the variation is due to the fact that the target customers in this article were not as heavily cold called as our target market. so, it made them more open minded. here's a link that shows our data: http://feefighters.com/blog/950-and-1500-calls-tales-in-telemarketing/ http://feefighters.com/blog/950-and-1500-calls-tales-in-tele...

ericabiz 15y ago
I agree with the two posters who've already replied; your strategy didn't work not because cold calling doesn't work in your niche, but because your pitch was mediocre at best. (I also know personally someone who built a big merchant account business from cold calling, so it IS effective in your industry.) Take a look at this book: http://www.amazon.com/gp/product/0470567023/ref=as_li_ss_tl?ie=UTF8&tag=ericadotbiz-20&linkCode=as2&camp=217145&creative=399369&creativeASIN=0470567023 http://www.amazon.com/gp/product/0470567023/ref=as_li_ss_tl?... -- it's the best book I've ever read on cold calling, and is helping me get over my fears about it (I plan to start a big cold calling push in January.) You'll quickly see the difference between your pitches and the ones outlined in the book. And I also recommend that you do cold-calling yourself instead of outsourcing it. You'll learn a lot more quickly that way. Once you have an effective script, then you can outsource.
veesahni 15y ago
The OP made the call as a founder who deeply cares and is trying to make a connection with the person on the other end of the line. In your experiment, the calls were being made by staff of a third party, which raises concern as to whether the caller is interested, speaks with appropriate animation and can evoke needed interest and emotion by the receiver of the call. Furthermore, I don't think the value proposition of your scripted pitch was significant enough. The OP went out of the way to try to create a valuable win-win scenario without it sounding like a sales pitch. If I were on the receiving end of your script and didn't know of your organization, I'd assume the ebook would be filled a bunch of fluff and a hidden sales pitch for your product. Potential value for information that I couldn't just otherwise find on Google is low.
- startupstella 15y ago
  Those are great points, but the question becomes a matter of the stage of the company. Clearly, the author still benefits from making cold calls, whereas in most cases, this starts out as a reality but becomes less and less as the company grows. Also, we know our ebook is a potent conversion tool. I think it stills comes down to the question of industry marketing practices: we've found inbound marketing to be much more effective because of the saturation in cold calling.
vidarh 15y ago
Those are absolutely horrible pitches. I'm surprised they didn't bomb worse. My first job was to cold call on behalf of a charity for the blind, and I've also done a telesales job for short time, and got training in it. First thing we learned the first day in both jobs was the way of structure a call to get interest. There were of course big differences, but a few very significant common takeaways. Incidentally there's a lot in common with this and being a good conversationalist or even generating attraction: * You need to offer value. That means, you never ask to get anything off the bat. On the contrary, you seek to get them to feel that you're going to offer value. * You set up drama that they want resolved. E.g. you offer insight about some situation that is emotional to the listener. For the charity for the blind, this was of course about creating sympathy. For the telesales, it was about describing some scenario that corresponded to a need the customer felt strongly about, such as spending more time helping their children read (the company sold children's books). * You get the listener invested and hopefully make them contribute details to the scenario from their own background; e.g. explaining the problems with their business, for example, and starting to look for ways you can help them. * You make statements that gets implicit buy-in from the listener unless they object. People don't like to object, and if this is done subtly, people will find themselves accepting your statements even when they initially disagreed with them. * Then you give the customer hope that you can help them make things better. You've established yourself as having high value to them. If you do it right they will ask you what they can do or how they can buy your product. The overall structure is to start on a friendly high note, create drama and tension and bring the emotions down, then resolve the tension and offer up a solution while bringing the emotions up. Think Hollywood tear-jerker. The scripts you quote on that page fails in that they don't set up a conflict or any tension that you can resolve for them. Just some bland statements about "cutting the nonsense". I'd have done something more along the lines of "I'm sure that like lots of other [small,big, type-of business] businesses (implicit buy-in to your statement, putting them in a group they identify with), you've been hit with chargeback fees that were totally bogus [addressing a conflict] and have had to fight with your processor to recover funds and (more similar stuff)... (ask how it's impacted their business, and show them you sympathize). What do you think you can do about it? (listen to their feedback). Well, we have a report that helps you solve some of these problems. (wait for them to ask what it costs) We'll e-mail it you for free." On top of this, voice, intonation and the level of excitement you manage to project makes a massive difference - the biggest problem in the training at both jobs was to go from sounding like you read from a script (because you did) to projecting well enough that you came across as believable. In my own experience, this latter is so much easier when you call yourself, rather than outsource it. (EDIT: fixed formatting)

username3 15y ago

Wasn't there another article like this?

rgraham 15y ago
Yeah. This builds on http://bit.ly/oeZDzC http://bit.ly/oeZDzC.

deleted 15y ago

[deleted]

DanBC 15y ago

I really like two things about this article: 1) His approach would have worked with me. One job I had, I used to have to filter calls from everyone trying to get through to my boss. Polite honest quick callers got the chance to mail details, or let me web-search their company. But the amount of pushy idiots! Some of them really gave "their" product a bad name. Scare quote around their because unlike the author in OP these sales people were just low-wage employees of some big company. 2) Some aspects of the job are easy. (Coding.) Some are going to appear really hard, but you just have to do them, and learn as you do them. (Selling, to real humans, face to face or over the phone.)

chops 15y ago

I have to express similar experiences with the blog post. While I have Adwords experience for 5 years now (with my MMO guild hosting system), with my newest offering (Plug: Sports League Management - http://www.bracketpal.com http://www.bracketpal.com), I knew that I'd be facing a much more established market with higher PPC and I'd be up against more established players with bigger budgets. So, I faced my fears[1] and began a sample of calling Volleyball leagues in the Milwaukee Area, expecting rejection after rejection. So far, it's proven to be well worth it. Not knowing how to structure these kind of things, I pretty awkwardly and directly opened with something like: Hi, My name is Jesse Gumm, I'm a software developer in the Milwaukee area and I'm in the process of getting a new product off the ground for running sports leagues, with a particular emphasis on volleyball leagues. It was used to run the leagues at Bradford Beach this summer, and I was wondering if you would be willing to sit down with me for a few minutes to try and see if maybe this would be a good fit for your company. That (terrible) pitch landed me around a 60-70% success rate for setting up meetings, and of those, the majority of them sound like they'll be buying from me this coming summer, and at the very least, has turned into referrals for other leagues and other sports (since I'm much more active in the Milwaukee volleyball scene, it helps getting those referrals for other sports for which I've very limited information). I'm gearing up for a massive cold-calling spree (just finishing a few critical features for a few Winter leagues I've got lined up), making an effort to call every volleyball league within 200 miles to see if they'll set up a personal meeting, before I start calling to try to sell the (what I think will be much harder to get) remote-desktop meeting. The article above and (the article linked in the comments: http://news.ycombinator.com/item?id=3234286 http://news.ycombinator.com/item?id=3234286) looks to be extremely valuable towards getting a better success rate, and is consistent with what I've been reading in sales and cold-calling books, regarding the success rate of setting up a conversation to find out the prospects pain points before pushing a product in their face. [1] And fears they are. I have to psyche myself out before every call, despite the fact that all of my calls have been pleasant, and most of them have produced meetings. And after the call, while I'm energized to launch my product and work, I still have to psyche myself out AGAIN for the next call. It's really a difficult thing for me. I'm definitely not the kind of guy that approaches someone at a party and strikes up a conversation.

15y ago

narag 15y ago

software for deer management Software for... what? Is this some kind of idiom or is it some kind of wild animals control? Please, could anybody drop a line of explanation?

rgraham 15y ago
Whitetail deer hunting is a 6+ billion dollar industry in the US. Many ranches sell hunts on enclosed ranches for trophy animals and you pay a sliding scale of how good a trophy you kill. This is so popular that many people are getting in the business of breeding deer to sell to other breeders and those ranchers. There is still a lot more demand than supply. On top of those segments, there are many hunting clubs and individuals with land that wish to manage the animals responsibly or in accordance with state guidelines in exchange for special privileges and tax breaks. All of these people need record keeping and analytics to measure what they are doing and report it to their state.
- narag 15y ago
  Thank you, very informative!

EponymousCoward 15y ago

He addresses scale but only scaling up. What he neglects to realize is that AdWords et al are elastic, if I want to get 10x impressions over the weekend I can do that. With cold calling, not so much...

jacquesm 15y ago
This is not true in all cases. Adwords has plenty of niches where the number of clicks per day is very limited, no matter how enticing your ad. If you already have a good idea of who your customers are the shortest path to those customers is likely a much more direct one than waiting until they happen to see your ad and click on it.
rgraham 15y ago
You can train a few people and pay them per conversion. It's easy to get a list of numbers from a service like Hoover's for free at your local library.

tptacek 15y ago

Scripting the cold call and iterating on it like it was a Google Adword ad is such a simple idea, but it had never occurred to me. This is a great, great post, one of the more useful things that's hit HN in the past few months. I don't know what it is about the Smart Bear blog, but man, it's one of the only things that hits HN regularly that I find myself sharing with non-HN people. I would love some more discussion about better cold-call call to actions. I feel like my particular market, while way better addressed by calls than Adword ads, already has its hackles raised on the prospect of being linked to a blog. What else has worked for people?

rgraham 15y ago
I've also tried whitepapers or ebooks with limited success. On the phone, people often assume they are marketing pamphelets and hold no value. I have had success with inviting people to educational lunches with catchy titles. Name dropping competitors you are speaking with is something you can try to pitch attendance. The effectiveness of that varies by market. I think educational marketing works...you just need to find the right vehicle. I highly recommend Chet Holmes's 'Ultimate Sales Machine.' Depending on your price point and geography I think simply setting up a meeting is a great first step. Most businesses are secretly relationship businesses. Taking an interest in a set of ideal customers and really building a relationship pays dividends in my experience. edit: Thanks for the kind words. I am happy to chat about it. I hope more people take something away from it. Forgive me for losing focus and not putting the thank you in the original comment.
JoachimSchipper 15y ago
I'm sure you know more about your business than I do, but the "enterprise" equivalent of blog links seems to be something like https://www.microsoft.com/casestudies/ https://www.microsoft.com/casestudies/. Of course, security is somewhat hard to capture in a catchy headline. "Widgets Inc.: Custom Fuzzers Catch 20% of Post-Release Bugs"?

Causification 15y ago

The revelation you're dancing around is that advertising, at least 98% of it, is based on a fundamentally broken concept: trying to sell something to someone who would probably be better off not buying it. Advertising currently works by slapping the largest number of random people and making them decide whether buying the product is a good decision. "Evil" advertisers try to deceive potential customers and be intrusive, while "good" advertisers try to selectively target and give potential customers tools and info to accurately judge the product. Those are steps, but the system is still broken. What Jason is hovering around is that the producer has as much theoretical responsibility in the customer-business interaction as the customer does. All human interaction must in principle be voluntary, and the winners are those businesses who take the basic interaction between two people and scale it upwards. YOU are just as responsible for finding the customers as the customers are for finding the product. That is the model the industry must adapt to, because people, especially intelligent people, are resistant to advertisements. And why shouldn't they be? Someone who tries to convince you to make a bad financial decision deserves an equal amount of scorn regardless of whether they know enough about you to judge whether you should buy it. If they do know, then they're malicious liars. If they don't, they're insulting you by saying their time is worth more than yours. Advertising is broken. You fix it by taking equal responsibility by only attempting to sell to people for whom you expect the sale to be mutually beneficial. It may be uncomfortable to think about, but looked at objectively, advertising as a whole is a long stream of invitations for people to screw themselves over and the unsaid assumption that it's the buyer's responsibility to make sure the raft they get on isn't the one going over the cliff. That is broken. Fix it.

edash 15y ago

This passage alone was worth the read: I decided I would offer to write them up on my customer-focused blog in return for a tour of their facility and a short interview. It gave me blog content, a personal chance to add customers, and a way to learn a lot about my prospects. It gave them some traffic, a relevant link, and a blog mention they could point to for social proof. He contacted people only after doing research and asked if they wanted to be featured on his blog. He gave value first and built connections. This isn't a story about cold calling so much as a story about how relationships, and by extension business, work.

tomkarlo 15y ago

One of the biggest problems here is that $150 is far too small an amount to test Adwords for a b2b situation (generally, low conversion / high value per customer.) If he's figuring on a $50 or so cost of acquisition when optimized, he's going to need to budget at least $1,000 or more (that's just _20_ conversions) to even start figuring out if Adwords will work for him. Cold calling makes sense, but he's comparing apples to oranges in saying he didn't get sales via adwords but he's getting leads via calling. He's spending an order of magnitude more at any reasonable conversion of time to money, and he doesn't know yet if these cold calls are going to convert, either. It's just that it's "cheaper" to do because he's not paying himself to do it, whereas AdWords is cash out of pocket (a valid issue but not one he's making.) If he tested Adwords and found a formula that worked to create conversions, he'd have a scalable solution. Even if he gets great at cold-calling, it's unlikely he'll have a scalable solution unless he intends to hire a raft of salespeople (who will probably not be as good as he is as selling the product, and who have to be paid.) It's entirely possible this is simply not a product that will do well on SEM, because people aren't actually out there searching for it, while potential leads are relatively easy to obtain and call. That's true of a lot of middleware products. But it might also just mean you haven't figured out what your target users are out there searching for (i.e. maybe not "Deer Management Software", but instead things like "Hunting Rifles.")

rgraham 15y ago
These are all good, valid points. For my specific situation spending $1000 to get 20 conversions didn't make mathematical sense. I spent several hours cold calling to get my first 10-15 conversions and if I paid myself for that activity it would certainly be far from 'free', but you are missing the main point of the calls. Personal attention creates relationships. These people talk to each other. Relationships matter to them. Those calls paid dividends beyond individual conversion. Besides that, there isn't a way to create an AdWords formula for every product X and market Y.
- tomkarlo 15y ago
  That's true, but it's not mutually exclusive. Lots of businesses use Adwords to generate leads that are then pursued using phone sales, and it also means you're no longer making "cold calls", because you're calling in response to a request. Adwords doesn't always have to funnel directly into a checkout. I'm also not sure how you're defining "conversions." Do you mean people being willing to meet with you, or are you saying you had 10-15 sales from the cold calling (cash in bank account.)?

danielhodgins 15y ago

Very useful follow up to your previous article on 100% conversion rate cold calls. Thanks! By the way, how did you hear about your deer management niche?

rgraham 15y ago
I grew up in Texas. I've been hunting and fishing since I can remember anything. When I couldn't walk through the marsh because I was too little for the sucking mud I'd float on top of a mesh bag filled with plastic duck decoys.

aresant 15y ago

"It won’t scale." That's not true. If cold-calling doesn't scale it's usually the underlying business that's not going to scale, not the method of marketing. Marc Benioff (Salesforce CEO) built his company around "inside sales" which is essentially cold-calling with a fancy wrapping. A recipe to scale cold calling for an entrepreneur is: a) Get very specific about who your customer is, and how you're finding them. For instance if you're selling small business websites to dentists maybe that's "go type in "dentists" on Google, and see who's advertising, and then click through and hit the "contact" button". b) At scale you can then pay somebody else to do the work for you, large list brokers like InfoUSA have millions of consumer and business records for you to reach out to. c) Get caffeinated, find your courage, and pick up the phone to start placing phone calls. d) Based on your interactions build yourself a script (or at very least bullet points) that gives you an outline of how to contact the customer including FAQ that you encounter. e) Build with the end in mind of bringing in your first "inside sales" person. You want to literally turn over a handbook of how you're working this process. Throw out a juicy commission on orders, and then rinse and repeat. This takes work, but it's an extremely efficient way of building your business particularly for B2B.

smartbear 15y ago
Great point, well made. To counter-point, for some businesses, the cost to acquire a customer even with the efficiencies you describe is still too much. For example a consumer product that's $99 per year with 50% gross margin needs acquisition costs lower than even your plan will provide. In that case -- which is common in high-tech startups -- cold-calling can still be an effective way to start, because the learning you get is more valuable than revenue at the start. Still, more companies could succeed with your strategy than who are willing to try, and you're right they're missing out.

johnohara 15y ago

Hi, I’m Robert ... I am looking for a few people to visit, tour your facilities, and talk with you about your business. I can then write up the experience and link you up on the blog. I'd be inclined to think you were stopping by to case the place which is why professional networking is so important. Not fool proof, but helpful nevertheless.

quanfucius 15y ago

Does cold calling produce better conversion rates than emailing? What are everyone's thoughts on this?

rgraham 15y ago
The answer to nearly any marketing question is 'it depends.' My experience in a couple of markets suggests that it does for me. You will have to test it for your context.
- HeyLaughingBoy 15y ago
  You also have to consider that emailing to non "opt-in" targets can run afoul of CAN-SPAM.

tnicola 15y ago

Like AdWords, cold calling has its place. I am sure that cold calling about deer hunting was more effect than Google AdWords, as (forgive the stereotype here), I am assuming, your audience preferred high touch and is not all that tech-oriented. I would like to see the effect of cold calling vs. AdWords when you are marketing an app for an urbanite and cold calling in a major city, like New York or Chicago. Your pitch may be carefully crafted, but between people like myself who'll hang up before you reach your first breath intake point and Do Not Call Lists (in Canada), I think that the success of your marketing campaign was a little circumstantial.

rgraham 15y ago
I think the success of (nearly) every marketing campaign is circumstantial, but your points are valid. Marketing is highly dependent on context.

mattmanser 15y ago

I was looking around your site trying to find your products: http://whitetailcensus.com/ http://whitetailcensus.com/ http://www.mywhitetailscout.com/ http://www.mywhitetailscout.com/ One of them doesn't even seem to have a stylesheet or a single picture or video of your product. Sounds a cool product but I have no idea how hard it is to use. Is it like facial recog software? The other, the scout product, the 'reasons to buy' are the worst I've ever seen. And I still don't know what you're selling! But it has rapid record retrieval. Wow. Marketing 101 man, that's not a reason to buy, customers don't care about that. I didn't want to be negative but on the other hand I honestly think you could do more harm than good with this article. Firstly it seems that online selling is not at all your forte. Let me be frank, you cannot write marketing copy. Worse you've presented yourself disingenously, as if you had some skill with adwords, I thought I understood AdWords pretty well. I even worked on the AdWords API team as an intern at Google. What has working on a technical product at Google got to do with writing marketing copy? Quite obviously nothing. Secondly, cold calling can be a very expensive way to acquire customers. And you've hand waved your way through it. You converted them because you drove out there and sold. At $29.95 a year, the price you're listing one of your products, you cannot buy a list of phone numbers, call the customer and then drive out and visit them and still make money. The premise behind the article seems a great way to validate your ideas, but that's not what adwords is for. Adwords is for selling. And you haven't mentioned any sales costs associated with the phone process in the article. The fuel? The time? Having worked in industries where we did buy leads, the mortgage industry, it was £75 a number. They weren't even cold and we still had a conversion ratio of 1 in 10. Could you make money paying £750 per customer? Our product sold for £2500 so it was worth it. And say you go b2b instead, companies give away their numbers on websites all the time. Can you get to the decision maker in a couple of minutes? Or are there barriers? Overall I just think this article is badly titled and you shouldn't have mentioned adwords at all. This is a great idea for getting to know your customers. For selling, I doubt its benefits. I want others to think, is cold calling really worth spending your time on? Can you actually afford to?

rgraham 15y ago
You're right. Something is wrong with the Census site, but there are images on the tour page. I'll take a look. The Census product uses Mechanical Turk to recognize deer in trail camera photos and determine herd statistics using capture-recapture. You upload images and get emailed results. That is it. I never managed to sell the Scout product online. It is incredibly bad marketing copy that I modified from some examples I found around the web. Any sales of that product required calls or in person handling. I did best at a trade show. There is no online audience I could reach for it. I underpriced the product and marketed it poorly. I found some success in higher-touch sales, but you are correct that the price point needs to support that effort level and you should target your market accordingly. That particular product also has an entrenched and highly likable competitor. Phone numbers (business listings) from a service like Hoover's are free at your public library. You're also correct that working on a technical product has nothing to do with writing marketing copy, but I'll bet that not everyone in this audience knows that. Hopefully my story lent them some perspective. I'm working on another product at the moment. I wrote the article about my experience developing those products hoping that people would think about what might work for them and be open to ideas that aren't commonplace. I'm glad to have your perspective as it may help everyone consider their options from every angle.

Timothee 15y ago

I'm planning on going "out of the building" very soon and go talk to some potential users, so the part about refining the opening phrase is very useful. It won't be cold-calling but going to talk to people on the street so I'll be interrupting them somehow, so I'll have to pay attention to what works and what doesn't… On the "this does not scale" part, this is a recurring theme: Alexis Ohanian commented with multiple accounts at the beginning of reddit, IIRC Facebook was getting the class schedules more or less manually, Airbnb's CEO slept at many people's homes to understand their needs, I believe the guys at Quora were answering questions themselves, etc. This doesn't scale but it gets things moving and you learn what really works.

dkokelley 15y ago

"At this point in my company it was far more valuable to land a dozen orders... This part doesn’t need to “scale,” it just [needs] to happen." A thousand times this. I think this is the biggest takeaway from the article. I think as entrepreneurs, we see something both scary and mundane like cold-calling and think "I don't want to do this. There's no way I'm going to make $1MM+ calling people from the phone book." I know I suffer from this frame of mind, and the above quote is a good dose of reality.

js2 15y ago

A successful entrepreneur I know impressed upon me once the importance of just picking up the damn phone. He wrote about it here: http://www.mcstartup.com/blog/2008/2/23/ive-got-an-idea-should-i-use-an-invention-submission-service.html http://www.mcstartup.com/blog/2008/2/23/ive-got-an-idea-shou... and here: http://www.mcstartup.com/blog/2011/8/13/where-do-i-start.html http://www.mcstartup.com/blog/2011/8/13/where-do-i-start.htm... You get the idea...

joelrunyon 15y ago

Couldn't there be a complementary article titled "How Adwords (used properly) works better than cold calling?