Wednesday, September 17, 2008

Know your numbers

Many sales gurus say a customer is supposed to love you so much that they give you referrals just for the asking. Theoretically, your customers will call their friends, neighbors and the guy they haven’t talked to since high school, just to brag about how wonderful your company is. What the experts don’t mention is that it’s a lot easier to get a customer by referral if you already have a customer. It will take awhile to reach the point where a large share of your business comes via referral, unless your first customer knows everyone on the planet.

For now, you'll have to drum up businss among many prospecgts who’ve never heard of you or anyone you know. That may involve expensive outbound marketing, or ... cold calling. It’s called cold calling because there’s nothing warm and fuzzy about it. You won’t enjoy cold calling any more than the person on the other end of the phone.

There have been volumes written about how to do cold calling effectively. Go to any chain bookstore to find books offering plenty of advice. However, make sure if/when you make cold calls, you pay close attention to your results to determine if it’s worth the effort. Who knows? Maybe cold calling isn’t very effective for you. Maybe you can get customers faster and with less aggravation via other means of direct selling or marketing. You will discover advantages to either approach.

Before you decide to make cold (outbound) calls, consider the plusses and minuses of inbound efforts:

· Word of mouth, referrals, free publicity and other methods of generating a hot lead (the
opposite of a cold call) are a sweet way to start the sales process.
· You have legitimacy. You’re not just some schmuck wasting the prospect’s time with a
cold call.
· If she's contacting you, she's at least marginally interested in what you’re selling. She’s in
the market.
· You’ll uncover potential markets you might not have imagined otherwise.

· In many cases, the prospect is already aware of your competitors.
· By the time she contacts you, she may have already met with some of your competitors.
· It is even possible that she is using you as a measuring stick to see how good your rival
really is. She’s already made up her mind.
· If you decide to prime the pump with direct marketing and other paid advertising, your
cost per lead will be higher. Anything above a 2% response rate on a direct mail piece is
considered wildly successful. (Don’t spend a dime unless you’re going to commit to a long-
term campaign, and you can afford to pay for expert marketing help. The Internet, mail
and other venues are riddled with advertisers who are wasting their money on poor lists,
bad timing, inconsequential offers and pedestrian concepts.)

Next time, we'll look at the plusses and minuses of cold calling.

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