From the June 2014 issue of Research Magazine • Subscribe!

33 Cold Call Truths You Need to Know: Bill Good

Before picking up the phone to acquire prospects, read this list

In offering this list of cold calling truths, I am assuming you have a basic knowledge of lead classification and pipeline management. For more on those, I have posted a webinar “Patch Your Pipeline/Grow Your Business.” Anyone doing any kind of prospecting should watch this webinar. It's here: www.billgood.com/pipeline.

Some Basics

1. Skillful cold calling works today—in some markets, not all.

2. Sloppy, poorly conceived, badly scripted cold calling doesn't work in any market.

3. The markets in which it does not work are highly resistive. Spend an afternoon cold calling doctors. You’ll see what I mean.

4. There are many causes for failure. Toward the top of the list is “pit polishing.” You still continue to talk and talk and talk long after it's clear that the person is not interested.

5. It generally takes less than a minute to find out if someone might be a prospect.

6. If you are making long-winded calls, you are pit polishing.

7. In calling businesses today, you need to be making 50–70 calls per hour. There are not enough cherries out there to make less.

8. It should take fewer than 500 calls to determine if a campaign is not working. It can take some weeks to verify that the leads generated do in fact close.

9. “Working” is defined as 2–3 “red cherry” prospects per hour with a decent number of them opening accounts within three months.

10. The biggest mistake rookies make is get a bad idea and stick to it. For years, I have referred to this as “Basic Mistake No. 1.” I recently rescued a rookie who had been using the same tired scripts for a year. Yet he persisted. This mistake has destroyed more rookies in this industry than anything I know.

11. Basic Mistake No. 2: Get a good idea and change it.

12. The easier a list is to get, the more advisors have it, the less likely it is to be any good.

13. A good list is any list that will generate 2–3 red cherries an hour.

14. At least half of the success in cold calling depends on the list. Another 50% depends upon the script. And the remaining 50% is numbers, sound, time of day, pacing, momentum and energy. Yes, I know these don't add up, but you get the idea.

15. Very few people invest more than a phone call to a list broker to generate the list that will account for half of their success.

16. A list that you develop yourself will almost always out-produce a purchased list.

Bad to Worse

17. Of all the things that can go wrong with a campaign, a bad script is most common.

18. The “worst script award” always goes to: “I’m calling to introduce myself and let you know blah blah blah.”

19. The second worst script goes straight for the appointment, often apologizing first: “Mr. Loblaw, I hope I didn't catch you at a bad time. I specialize in helping my clients plan for retirement and other life events. I’m going to be in your area next Tuesday. I have a spot at 2 o’clock and another one at 4 o’clock in the afternoon. Which of those would be better for you?”

20. A terrible approach is “consultative cold calling.” In this approach, you are taught to probe for a need and then set the appointment. People who tell you they are successful with this approach are doing something else.

21. Handling objections when cold calling is a colossal waste of time. When you are cold calling, you are looking for one thing and one thing only: someone who is already interested.

Getting Interest

22. As a prospector, you are trying to find good prospects, not make them. The answer to: “I’m not interested, I already have an advisor, I’m all set, I’m busy,” is one word: “Thankyouverymuch.” Move on.

23. Every script has an offer. It's how you appeal to someone's self-interests. The worst offer is a service you can perform. Better is a strategy. Best is offering information on a product people will know something about. (I know the objection: What if the product isn't suitable? Response: We are not trying to sell on the first call. We’re trying to find someone who is interested in something.) Floating a product idea by someone is probably the least invasive offer you can make.

24. The more general a script, the more likely it will fail. “I would like to share a few ideas with you about investments” is a featherless turkey.

25. Where possible, select a list on which word of mouth can occur. Consider trade associations, employees at the same company, even people on the same block. Then, as you begin opening accounts on this list, you can ask for introductions to people you have already promoted to.

26. People are more likely to be interested in something they know. Suppose you get a list of highly compensated employees at the local branch of BIG, Inc. You have a client there and you are able to get the menu available for the 401(k). This script would have an excellent chance of success: “I have prepared a special report on the menu choices of the BIG 401(k) plan. Some of the choices are quite good. Others not so much. It would be sad if you are invested in the ‘not so much’ category. May I send you this report?”

Timing Matters

27. There is a momentum to cold calling. If you’re going to do it, set aside at least two hours a day, and don't do anything else. Granted, there will be exceptions. But a few months of cold calling will produce a wealth of leads—assuming you are not committing Basic Mistake No. 1.

28. A big challenge will rear its head when it starts to work. Now you have meetings, proposals, and investment plans. Naturally, the first thing you do is stop cold calling. Soon your pipeline is as dry as a bleached bone in the desert.

29. If you do not have a system in place to manage your leads, your pipeline will fill with pits. You will become so discouraged you will stop prospecting.

30. Your active pipeline consists of red cherries, hot prospects, active prospects and what I call “board.” These are names you have put on your mental whiteboard as “likely to close on a certain date.”

31. Your single biggest mistake in developing red cherries into hot prospects, and developing active leads into sales, is failure to set the next appointment. Asking for the appointment forces out the “false cherries”—pits disguised as cherries result in pipeline bloat. It will destroy your time and therefore your business.

32. Your active pipeline should not be too big. I have been researching this and am confident enough of my estimates to share them with you.

Red cherries: Around 25. Let's say you want two first appointments a week. You should be able to get that from 20–25 red cherries. If you have 50 red cherries, you cannot possibly follow up on them. They will grow cold. Or they are false cherries.

Don't let someone remain a red cherry more than two or three weeks. Move them on to hot prospect, or move them out.

Hot prospects: Fewer than 10. A “hot prospect” is someone who has set, but not yet kept, a first appointment. You might have two or three set for this week and next, and another few scattered out over the next several weeks.

Active prospects: Fewer than 10. Today, it takes 2–4 appointments to get an account closed. How many can you deal with?

Board: 2–5. These are people who should be closing in the next 2–3 weeks. You won't get them all. But if you can be opening 2–3 new accounts per month, you are hot. Survival is assured.

33. Keep statistics. By knowing what is working, and more importantly, what is not, you can avoid being impaled on Basic Mistake No. 1.

-- Check out more Bill Good columns:

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