Call at Your Own Risk: The Pitfalls of Cold Calling

There’s a heated debate amongst the sales community that’s been growing louder for years. The question, in its most simple terms, is this:

Is cold calling dead? 

We asked that question and the results were, well… mixed. 49% of people gave a firm "No, it's not dead".

Then we asked which channel drove the most revenue for SDRs: 

And cold calling was the clear winner.

Even still, there are plenty who believe cold calling is on the decline.

The rise and fall of cold calling

The headwinds for cold calling are well known — all starting with the rise of caller ID in the early 2000s giving prospects an upper hand to avoid salespeople. 

Nowadays, though, it’s harder than ever. Less business is being done on the phone as the world has shifted to virtual conferencing. 

In B2B tech sales, office phone lines have become obsolete as less decision makers go to a physical office each day. 

In response, cold callers are more and more reliant on mobile numbers from LeadIQ, ZoomInfo, and a growing list of new providers. 

To no one’s surprise, connect rates are dropping as prospects have grown frustrated with the sheer volume of unknown calls they receive. 

So what is our new baseline? 

According to Cognism’s study, only 2% of cold calls convert into a warm lead. 

A Zippia poll found that nearly two thirds of salespeople say cold calling is what they dislike most about their role — and it’s no wonder. Since the time-consuming act of cold-calling accounts for under 20% of warm leads across businesses polled. 

Nevertheless, sales leaders across the globe still bang the drum for call blitzes (much to the chagrin of individual reps). And assure ourselves "cold calling isn't dead".

Is cold calling perhaps an artifact from a now bygone era? 

Or, more cynically, perhaps an admission that many leaders don’t know where else to turn to drive outbound pipeline?

What happens when you increase your cold call volume by 300%

A 300% increase in meetings booked? A 300% increase in outbound pipeline? 

Not quite.

Here was the situation: 

We were seeing a spike in meetings booked on the phone from warm calls (calling prospects that we’d already chatted with via email or LinkedIn). 

We also were seeing a low volume of cold calls.

Our hypothesis? More calls (at a stable/increasing quality) = more revenue. Therefore, we decided to turn up the heat on cold calls.

Over two months this year, we made a concerted effort to increase our call volume by 300%. 

From January/February to March/April, we went from 15 calls/rep/day to 60 calls/rep/day. 

We paired this, of course, with ramping up our already consistent call training and enablement at the beginning of this year to ensure the team was effective once connected with a prospect. 

The results: Cold calling is dead 

OK, OK… it’s not completely dead. But maybe it's on life support?

Nothing like a polarizing topic to add some drama to this story, though, am I right?

But it definitely wasn’t the right move for our business.

Here’s what we found:

• Our 8% connect rate decreased to around 5% 
• Our 5% meetings booked per connection rate decreased to 3%
• 50% increase in meetings booked on the phone
• Accounting for the decreased time we were able to spend on LinkedIn and email, our overall meetings booked/rep increased 20% over our baseline.

These shifts were consistent across our top converting callers and lower converting callers

“But wait, those number  show an increase in meetings booked-per-rep”, you might say. 

I would say you’re right — but that’s not the full story. 

While we initially felt great about our increased yields for booked meetings, we quickly found a startling leak in our funnel as we worked to convert those meetings into qualified opportunities. 

The meetings we booked on the phone had an alarming 50% show rate compared to our baseline of 95%.

In other words, the meetings we were booking from cold-calls were no-showing 10x more than meetings sourced via other methods. Prospects were caught off-balance and they agreed to a meeting so they could go on with their day and not break the heart of a well-intentioned SDR. 

Of course there are ways to combat no-shows, but talking to other sales leaders in our space reveals that alarmingly low conversion rates from cold-calling are more the norm than the exception. 

And take in mind that these are only sales leaders that reported even booking enough meetings on the phone to have a number.

OK, cold calling might not be COMPLETELY dead

But it didn’t convert highly for us.

For a bit of context, it’s worth knowing who we sell to and how we prospect. 

We sell to marketing, sales, and RevOps leaders. We’re email and social-heavy, but have always mixed in a fair amount of phone activity to ensure we’re covering our bases. 

If your org sells to industries or personas that haven’t been as disrupted by remote work (e.g. construction, education, healthcare) your mileage may vary on cold call efforts. 

So what’s next?

From our findings, the current status-quo of cold-calling is unsustainable. 

Catching prospects off-balance to have them accept a meeting that they won’t show up to is good for giving reps a short-term dopamine spike, but won’t drive revenue. 

Warm-calling, however, is still a great way to connect with prospects. Again, that’s when you call someone after you’ve already chatted with them via email or LinkedIn.

It adds a nice human touch to the sales process once you’ve already connected.

Our good friend Tom Slocum agrees with us:

While the skills needed to succeed in these calls can lead to booked meetings on cold-calls as well, it’s unlikely to be a worthwhile investment once you factor in show rates. 

For more information on how we drive our success on emails and LinkedIn, check out our SDR team achieved 172% of goal for SDR-sourced Closed Won in Q1.

Happy prospecting to you — wherever you do it best.