The true cost of cold calling

There is a cost to cold calling. Lost productivity. Added sales expenses and salaries. And most importantly, wasted time hunting when your team could be selling. In a recent study, we sought to better understand the business impact of cold calling on sales efficiency, productivity, and ROI. Below are our findings.

Our Approach

To test our hypothesis that calling cold contacts has a higher cost, TechTarget's Director of Lead Development, Steve Hart, conducted an A/B test. In this test, he compared calling contacts with no recent research activity (Cold Contacts) to prospects who have shown recent and relevant technology research activity on the TechTarget network (Active Prospects). He created two identically sized lists of 6,000 prospects and had reps call on each list using an identical pitch. The lists were as follows:

  1. Active Prospect List: Individuals who have been recently researching relevant technology topics on TechTarget's network.
  2. Cold Contact List: Individuals with no known research activity on the same technology topics.

On each call, his team was instructed to ask the prospect what technology challenges they were currently facing and offer content aligned to their pain point. If they accepted the content, the prospect was counted as a lead. The lists were called through 3 times, and the reps did not know if they were calling active or cold prospects.

What We Learned

Active Prospects Convert at a Higher Rate vs. Cold Contacts

When calling on active prospects versus cold contacts, Steve's team saw a significant increase in conversion to lead. Active Prospects stayed on the phone longer and accepted relevant content 40% of the time compared to only 9% of cold contacts. In many cases, cold contacts would answer and hang up before we even had time to get to the pitch. By comparison, Active Prospects would frequently share their challenges and engage in longer conversations, and they were much more willing to say yes.

Takeaway: Sellers should prioritize their outreach to active prospects over cold contacts. Priority Engine users can utilize the Top Prospects list to quickly see a prioritized list of the most active prospects each week to call.

Expanding Reach to Include ALL Active Prospects Drives Pipeline

Most sellers tend to put their focus solely on a buyers' persona, job title, or seniority. In doing so, they spend their time on contacts who may never be interested in their solutions, and in turn, miss out on deals that are in motion. Instead of focusing on job title, expand your reach to include the active prospects who are researching solutions like yours right now.

It took Steve's team 29% fewer (25 vs. 35) dials to reach active Director+ prospects vs. cold Director+ contacts. Based on this improved connect rate, with 10,000 dials, your team would achieve 115 more conversations (400 connects to active prospects vs. 286 connects to cold contacts). Those additional conversations would generate:

  • 27 more meetings (based on a 23% average conversation-to-meeting rate*)
  • 10 more deals in the pipeline (based on a 38% average meeting-to-pipeline rate*)
  • At an average deal size of $150,000, you are adding $1.5 million in pipeline—just by calling active prospects instead of cold lists.

Now imagine if instead, you called all active prospects, regardless of their job title or seniority. As you can see below, this approach has the potential to double your pipeline with the exact same number of dials.

Priority Engine gives you access to all the active prospects on the buying team—more chances of getting noticed – and more at-bats. Don't limit yourself to just one person at an account because of a title or presumed decision-maker status – increase your chances of success by widening your net and grabbing the attention of everyone who is actively researching and engaging with topics you can sell into.

Additional Findings

Personalization and Research Lifts Results

With inboxes getting crowded and voicemails filling up, message personalization is one critical way to cut through the noise. While this test was specifically designed in a way that did not allow Steve's team to take advantage of behavioral insights, he did compare these results to internal benchmarks to see the impact of personalization on conversion and down-funnel results. In previous studies, Steve found that when his ISRs do their research and offer content that's directly aligned to an active prospect's recent research behavior, 75% convert to a lead. In contrast, without this level of personalization, his team saw a 47% decrease in lead conversion from active prospects and a staggering 88% decline from cold contacts.

Priority Engine gives you access to a wide range of insights that can be used to personalize emails and calls, including individual prospect's topic and vendor interests. Additionally, you can access account-level insights to get an understanding of the business, company revenue, and the relevant actions and interest of the buying team. We recommend you take a couple of minutes to review this information before calling or emailing to increase your chances of getting a response.

Pro Tip: Steve shares a great way to personalize your approach without taking too much time:  "Before anyone on my team calls a prospect, they're required to do a quick search in Priority Engine to understand the tech topics, vendors, and entry points the account (or prospect) is researching. They then reach out with a pitch and an offer that's customized to those interests. The key is they always take a consultative, needs-based sales approach".

Want More?
You can read much more about Steve's study here and see the additional data of calling active contacts versus cold ones.

Or watch this sales training video on best practices for selling with intent.

 

 

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