Cold Calling Excuses Measured

Sales pipeline management process for prospecting, lead generation, and cold calling.

A diagram illustrating aspects of sales prospecting to support an article about using a sales pipeline management process to drive lead generation.

A sales pipeline management process might seem like an odd way to improve prospecting and lead generation activities, yet it imposes just the kind of forward-thinking that is a fundamental part of maintaining a full pipeline of ripe sales opportunities.

When I meet or speak with telesales people who have a dual responsibility for lead generation and handling inbound enquiries, I often ask, “How many outbound calls to new sales prospects do you make each day?” The truthful respondents usually acknowledge a number less than ten.

Those who have no choice, whose role is to do nothing else, might laugh at this number. Salespeople in outbound call centres may be tasked with making 100 or more dials a day. Those on the end of auto dialling software, even more!

Field salespeople won’t make cold calls! I hear this statement or a variation of it from many managers. The reluctance seems to be universal. Even people, who have become experts at it, soon shrink from the duty if it ceases to be obligatory.

Sales Prospecting Excuses

Reasons given for avoiding the task include:

‘It is not the best use of my time.’ - Done badly, cold calling is certainly an easy way to waste time.
‘Decision makers don't take calls from salespeople.’ - True, except when they have a reason to.
‘It is not my job to generate leads.’ – If marketing isn't generating enough enquiries, this is as good as saying, “I cannot meet my target”.
‘I need to see people to be effective.’ – Many field salespeople are more effective in face-to-face situations than when using the telephone to speak with strangers. At the same time, versatility is a vital quality.
'I don't like making cold calls.’ – It is easy for a dislike to become a phobia, something that makes one fearful.

Sales Lead Generation Necessity

For most salespeople, achieving their target is necessary to support their family, standard of living, and career aspirations. If marketing is not producing enough leads to achieve the target, prospecting in some form, becomes a necessity. A sales pipeline management process can be used to guide and motivate action.

How many leads do you need each week, month, or quarter?

If you know how many leads turn into orders, it is easy to work out.

If you haven't done this before, here is a step-by-step explanation of how to arrive at the answer.

First calculate your conversion rate. Count the leads you have received each month for the last six months. If you have lost the information, ask marketing how many leads have been generated in the period and divide the total by six. Then divide the result by the number of salespeople the leads were distributed to. This will give you an average to work with.

Now divide the number of leads you received by the number of new business orders you won in the period. The number of leads it took, on average, to win each order is your lead conversion ratio. If your result was 10, your ratio would be 10:1 – indicating that it takes ten leads to get an order.

Now work out how many leads you need in a period. Divide your target by your average order value and multiply the result by your conversion ratio to reveal the number of leads that you need to achieve your sales target.

For example, if your average order value is £10,000 and your target for the period is also £10,000, you need one order in each measurement period. If your ratio is 10:1, on average, you need ten leads to achieve this result.

If you have a surplus of leads, you don’t need to make any cold calls. If you have a deficit, you have some time to do something about it before your lead shortage turns into an order shortage.

Sales Pipeline Management Process Applicability

Some people react to statements like this by pointing out that it is oversimplified or not applicable to them, because of high order values or long sales cycles.

Even if you sell aircraft to airlines, extending the measurement period will still yield useful information. High-value sales usually require a team effort. In such situations, it is appropriate to measure opportunity win rates for a team or the whole company, over a longer period.

The principal can always be adapted to the circumstances because the input (leads/enquiries/referrals etc) and the output (orders) are always measurable.

If you collect and monitor the data, it tells you what will happen in the future.

The alternative is to employ the hope strategy and trust your luck.

If the data indicates that you don’t have enough leads to work on, you have a few options. You can set about increasing lead generation through marketing, increasing referrals and introductions, or generating more opportunities by proactively approaching potential customers.

There is another alternative - adjust your earning expectations.

Maybe the situation isn't quite as stark. When is a cold call, not a cold call?

When it is a warm call!

Identifying people who have a need before calling and finding a way to communicate their opportunity effectively, offers a way to improve cold call conversion rates. Effective ‘Rifle Shot Prospecting’ rests on forethought, planning, and preparation. It is a numbers game after all.

The smart approach involves working out the numbers in advance and applying effort to keep the pipeline balanced so that you have a continuous flow of sales opportunities that are ready to close. This is the result of operating a sales pipeline management process.

Article by Clive Miller

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