I was involved in a discussion about cold calls in one of my LinkedIn groups last year. Are cold calls effective for SMBs? It is a very interesting topic and one of the most in depth I have seen in the group. I think it is such a popular topic because it pits the “Old School” ideas vs. the neophyte zealots of the new “Inbound Marketing” school.
Don’t get me wrong, I am all in favor of Inbound Marketing and believe it is or will be the single most effective tool for lead generation for years to come. That being said, I still believe that there are traditional avenues of lead generation that are still relevant- Cold & Warm Calling being among of them.
Let’s start out by establishing some definitions. These are mine, but I think pretty much everyone follows this line of thinking:
Cold Call – When you call someone from a company who is not expecting your call and does not know you from Adam.
Warm Call – A call to someone who has been “Warmed” via another marketing channel such as email.
Inbound Marketing – Putting bait “Useful Content” on a hook and reeling in the fish “Lead Nurturing” and then figure out how to do it more effectively “Analysis”.
Looking at the calls…
Obviously, a warm call would be better than a cold call and really, in today’s day and age, no one should HAVE to make an actual Cold Call. For the purpose of this article, I am going to kind of lump the two together in the sense that they both have a Taboo reputation in the marketing mantra of Inbound.
While I have no scientific backing, I would say that the reason a LOT of cold calls are ineffective is because of the person making the call.
Target, Believe, Evangelize & Follow-up.
In the scheme of things, your target is the most important. If you are going elephant hunting and shoot a prairie dog, you are doing things wrong. If you are selling Refrigerators and are calling Whirlpool, you are doing something wrong. Learn who your target market is and generate a list based on who they are. The more accurate your list, the more leads you will get from it. An accurate list will save you tons of time and reduce your feelings of rejection during the whole cold call experience. For effective marketing in general, there is little that is more valuable than a solid targeted list.
Believing in what you are selling is more important to a cold caller than anyone else. To make a successful cold call you have to actually WANT to talk to the person on the other end of the phone AND believe you can HELP them and not waste their time. Believing in your product or service is critical. Without it, you will have little success in your calling efforts.
Once you have a target and you believe in your message, you can begin to evangelize. Transfer the believe in your product to your listener. You do this through interacting with your listener and matching your solutions to their problems.
Of course, once you begin to evangelize them, you need to follow-up. You won’t usually make a true believer on the first call or the first touch. Add them to your list so you can touch them through other marketing channels. This is a great time to also add them to your inbound lead nurturing strategy!
Conclusion, Are Cold Calls Effective?
Cold Calling is a tactic companies can use to get sales, nurture leads and build a successful list. It can be effective when done properly and is ideally suited to augment inbound marketing.
Special thanks to the folks who contributed to this topic, specifically:
Whether you are an industrial B2B company with a dedicated marketing team, or a small business managing your own marketing strategy, there are two important elements you must be aware of: your lead cost and your lead value. Your lead cost and lead value play a big role in managing a successful online industrial marketing budget. But, what exactly is lead cost and lead value? How do you identify them? And why are they important to a marketing budget? (more…)
Whether you are an industrial B2B company with a dedicated marketing team, or a small business managing your own marketing strategy, there are two important elements you must be aware of: your lead cost and your lead value. Your lead cost and lead value play a big role in managing a successful online industrial marketing budget. But, what exactly is lead cost and lead value? How do you identify them? And why are they important to a marketing budget?
Value of a Marketing Qualified Lead
Every transaction revolves around the value of a product. As a consumer, you make your purchasing decision based on your perception of the item’s value. The decision whether or not to buy a product or is generally based upon three factors: Brand, Price and Percieved Value.
- Is your brand viewed in the market as an economy brand or a premium brand?
- Is your consumer buying primarily on price?
- What aspects of your product or service are perceived as valuable to your market?
Likewise, sellers place a monetary value on their product or service based upon their perceived value. Unlike consumers, sellers must ask themselves several questions before placing a value on their product:
- What was the cost of making our product/providing our service?
- What is the value of our product/service to consumers?
- How does the value of our product/service compare to our competition?
As a business owner, once you determine the value of your product, it’s useful to determine the value of a lead. In other words, how much money would you spend on advertising your product to a single person in your target audience? For instance, if you own an industrial B2B company that sells branded paper products to the food service industry. What is a monetary value that you would place on signing a contract from a single business in your target audience?
Let’s say that you want to market your custom branded, paper cups to restaurants that sell hot beverages. You have a total campaign budget of $160,000 and of your target audience, you gain 320 leads from the campaign. You close about 11% of those leads and the average order totals $50,000 with an average profit margin of 20%. This leaves your lead value at $600.
Overall Marketing Campaign:
- Budget : $160,000
- Leads : 320
- Close Rate : 11%
- Lead Cost : $500
- Lead Value : $600
Since you are an industrial B2B company, it’s common that your customers remain loyal for a number of years. This would alter the lead value and the average sale amount to account for the lifetime of the business relationship without increasing the cost to market your product or services to that same lead.
Cost of a Marketing Qualified Lead
The cost of your lead should never be greater than your lead value. However, you also need to be cautious that the value is not outrageously higher than the cost you are willing to spend on an individual lead. It makes sense to narrow down your analysis into separate marketing channels within your campaigns to see the relative cost of each.
Perhaps, Pay Per Click Marketing leads were $125.00/lead whereas your Tradeshow leads came in at $300.00/lead. As you track this information over time, you will see what markets perform best in each marketing channel.
Using the same example as above, your revenue at the end of the campaign is $192,000. For an individual lead, you spent about $500 – about $100 less than the lead’s value.
Breaking the campaign by spending:
- Tradeshow : $35,000
- Pay Per Click Marketing : $30,000
- Call Center : $80,000
- Content Development : $15,000
This is Leads | Close Rate:
- Tradeshow : 35 | 25%
- Pay Per Click Marketing : 83 | 18%
- Call Center : 202 | 5%
- Content Development : For this example, content development is a conversion tool not a lead source.
Now lets look at lead cost | lead value
- Tradeshow : $1000 | $1500
- Pay Per Click Marketing : $361 | $1439
- Call Center : $396 | $104
With this information, we can start measuring marketing channels in comparison to products and markets so we know where our money is best spent.
When determining your budget, you need to account for the major marketing channels where your target audience goes for information and solutions to a problem. These particular lead conversion opportunities are important, and your marketing budget should account for those major channels at a minimum.
Formulas Used In Calculations:
- Campaign Return = Total Leads * Close Rate * Average Sale Amount * Average Margin – Campaign Budget
- Lead Cost = Campaign Budget / Total Leads
- Lead Value = Campaign Return / Total Leads
Your corporate website was designed maybe two years ago and you feel it’s time for an overhaul. It’s important to keep up with the times, implement new technology, and stay relevant. You shop around for a few website design companies and have seen some beautiful design work. It will be expensive, but based on what you see, it looks very impressive. These guys have got it going on. You finally decide on an agency and they promise to deliver an awesome new website in 12 to 18 weeks.
Website Development Labor Pains
In an ideal world, 12 to 18 weeks roll by and you are left with a very attractive website that everyone assumes will have leads rolling in left and right. Job well done.
Then this happens…
…What the #$/^&*
Now, what do you?
- Go back to the website developer and complain about the site you approved of and signed off on?
- Get a new firm to look at it?
- Get an SEO company to audit it?
Regardless of what you do, there will be a lot of scrambling, hard feelings, and sinking stomachs.
What about a new approach to your next website design?
Start out with a rapidly deployed foundation- a launch pad site. The goal is to get this thing out in thirty days. This is an actual site that provides all the core content. No bells and whistles. The site is launched and starts to gain exposure in the search engines and to your audience.
This site is:
- safe – “Do no harm approach”
- fully optimized for search engines
- launched correctly
- and the old site is appropriately redirected
From this point, you can organize a list of features you want* on the site and categorize them by how they will affect your KPI’s (key performance indicators). Write a hypothesis for each, explaining how it should affect your KPIs, a priority for each, and real data that is being analyzed on the launch pad site for each.
Rather than being a two to three-month love’em and leave’em event, the website development process is a month-to-month partnership between your company and the marketing/design agency. You are working together to optimize conversions and improve user experience through user signals and actual interactions on your website.
* Hallelujah! All the Features I Want!!
It is time for a come to Jesus discussion here. I realize I said all the features you want. What I should clarify is, after taking a careful look at user interactions on your website- take what you learned and see how you can adjust it to maximize impact on KPI. Determine the difficulty in implementing your change and create a prioritized list that you and your developer can use as a tool to improve overall ongoing site performance.
I have to warn you NOT to get hung up on details that will in no way affect the user conversion. If you are at all unsure about something, watch the user behavior and let that dictate your decisions.
Hit me up on Skype: robbluther.
One of the frustrating things I was having with WordPress was the blog not displaying within its own category below the root of the server. For example:
In this example, the blog-post-title is showing at the root level. What I want to do is contain all blog post content within the blog itself.
The great new is, its a super easy fix. Create a blog template in your child theme:
Template Name: Blog
// Which page of the blog are we on?
$paged = get_query_var('paged');
// make posts print only the first part with a link to rest of the post.
$more = 0;
//load index to show blog
load_template(TEMPLATEPATH . '/index.php');
Create a new page in WordPress called, Blog.
Change your permalink setting to match your new blog page.