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The Hidden Cost of Cold Calling

By Larry McGinnis 

Often sales managers in large dealerships like to require their salespeople to do a minimum amount of cold calling.  This is done despite the fact that cold calling has the lowest return of all prospecting methods.  Some mangers feel that cold calling should be done because it is done at the salesperson’s time and expense and not at the company’s expense.  In other words, if a salesperson is able to scrape up some business here and there on the salesperson’s time it would be enough to justify the cold calling requirement. 

What they fail to realize, however, is the very real hidden cost of cold calling. 

The most important aspect of cold calling is the effect that it has on salespeople. Please, don’t get confused.  Cold calling destroys the morale of a sales organization.  Companies that require cold calling have the highest turnover of all sales organizations, upwards of seventy-five percent. This is a fact; such high turnover is disastrous to a company's long-term profitability. Companies that run a solid marketing program and provide qualified leads to their sales forces have virtually no turnover. 

I hated cold calling, and I have personally quit jobs because of the requirement to cold call. On the contrary, I stayed with one company for a long time and did very well there because my manager was actually against cold calling and worked hard to make sure we always had a decent supply of incoming leads. Not surprisingly, we were the most rapidly expanding dealership in the area during the time that I worked for that company. 

Sales organizations that wish to attract and keep the desirable, most professional top producers out there need to start with the basics and implement a solid marketing plan that will generate a consistent supply of leads for the sales force. Anything else will lead to a lack of talent and high turnover on the sales staff. A requirement to cold call repels great talent and attracts inexperienced salespeople who won't bring in the big numbers every manager desires. A good marketing system, and the consistent stream of leads it generates, will attract and keep top sales talent. 

Rather than continually investing in recruiting, hiring and training salespeople, it makes good business sense to keep good salespeople by giving them the best possible opportunity to be successful.

Larry McGinnis brings over 30 years of experience to the office machine business. His Company TEC-AID markets a service department management program called ServiceTrak and a sales aid program called SalesPower Plus. He can be reached trough his web site at www.tec-aid.com

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