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Cold Calling Is Still Hot

by
Jeff Wood
Oct 14, 2013, 6:44 am ET

The key to making quantum leaps in one’s production is found in the psychological arena. –Dr. Aaron Hemlsley

In his ERE article The End of Sourcing Is Near … the Remaining Recruiting Challenge Is Selling, John Sullivan suggests that due to the LinkedIn factor, the biggest challenge facing recruiting today is the need to sell, and the fact that many recruiters dread doing so. That’s because they just might have to make cold calls.

It’s Called Cold for a Reason

When I get ready to make a cold call, I do this whole psyche up thing.

I imagine myself as tall, strong, and fearless; ready to crush the competition. I get out of my chair and walk around. I look and feel the part. I am a recruiting professional and I am prepared for action.

I pull the trigger (aka dial my phone). It goes straight to voice mail. I leave a message that is precisely 30 seconds in length; I know that because I timed myself reading my prepared script before making the call. I hang up.

I made a cold call to the VP of Sales.

Whew, that wasn’t hard at all.

A few minutes later I dial into my voice mail to check out the recording I just made to myself..

Oh crap. I sound like a pissed-off drill sergeant begging for food stamps. I would delete this joker’s message within the first three seconds if I were the recipient.

Why So Many Avoid Cold Calling

Is it fear, laziness, or procrastination? It has a lot more to do with the psychological barriers against higher performance that many of us build overtime.

According to performance expert, Dr. Aaron Hemlsley, “The key to making quantum leaps in one’s production is found in the psychological arena. If this area is ignored all change is at best, short term. All performance problems are psychological problems.”

It’s a Numbers Game, But …

A few years ago I attended an onsite training seminar by a well-know recruiter trainer. He talked about setting a daily schedule of 40 marketing and 40 recruiting calls. He inspired me to go back to the office and try to make 80 calls a day.

Before long I was finding other priorities to fill the time allotted and making only a few calls a day. I was avoiding cold calling and did not know why.

Goal Setting Is Not the Answer

According to Helmsley, “if goal setting generated change, then everyone would be a success, because everyone has set goals.”

I had stopped calling because I had inner barriers sabotaging my success, regardless of the goals I had set for myself. In other words, to stop avoiding making calls, I had to first look inside of me. Before I did that it would not matter how many sales coaches I listened to.

As time went on I realized that how I perceive the value I bring to the table has more to do with the way I feel about me than what I’m selling. If I didn’t believe in myself, the value proposition I offered didn’t matter. I needed to first master my inner demons before I could master the phone.

Gradually making calls began to feel easier, less intimidating, and even fun. I was on my way to getting my emotional recruiter house in order. I felt invigorated.

If Cold Calling Doesn’t Even Work

Now that I was spending more time on the phone, I began to question just how much time I should be devoting to it. What if the effectiveness of old-fashioned phone prospecting has been killed by the advent of social media and other modes of communication?

In the fall of 2011, Baylor University’s Keller Center for Research partnered with Keller Williams Realty International to conduct the first scientific study to quantify the effectiveness of cold calling.

Each of the 160 agents selected for the study was provided with a standardized, cold-calling script, (essential to effective cold calling), and committed to set aside an hour each day for seven days, over a two-week period, to make cold calls in his/her respective geographic region. Agents were asked to call a generic, random list of numbers from a region not previously marketed to.

Results of the study:

  • On average each call took five minutes with an agent making on average 209 calls over 7.5 hours.
  • 72 percent of calls went to voice mail or were a wrong number
  • 28 percent or 58 calls were answered
  • One qualified appointment, or referral, came from every 209 calls
  • 1 out of 58 answered calls resulted in an appointment or referral
  • The most productive time was 10 a.m. – 2 p.m.
  • The least effective time was after 5 p.m.
  • Maintaining motivation while cold calling in anticipation of unsuccessful outcomes is a challenge many are unwilling to face
  • The quality of the list is a major factor.
  • A key aspect to staying positive when making cold calls is to understand that it is a numbers game.

The reports of my death have been greatly exaggerated. –Mark Twain

Based on the evidence, it seems that cold calling is very much alive, like it or not. Overall, the researchers concluded, once contact was made (the call was answered) the results were encouraging with an overall relatively strong ROI. They summed up the findings in the following quote:

“Cold calling can be tedious (both mentally and physically), but can lead to potentially fruitful outcomes.”

Cold-call Dropouts Create Opportunity

Perhaps the most interesting result of all was that many agents said they have given up on the effectiveness of cold calling, while the ones willing to invest the time, energy, and resources into cold calling reap the benefits made available by other agents unwilling to do the same.

Recruiters are no different and many have forsaken cold calling in favor of social media as a primary contact mechanism.

You Change Lives — Now Change Your Own

As a recruiter you bring the prospect of real change and growth to any one you call. You can improve a career — or a company’s bottom line — if given the chance. Along with making a lot of calls, the depth of your resolve of the belief that as a recruiter you can make a positive impact is a real driver of cold calling success.

So before you give up on cold calling as a recruiting or marketing tool, feel inner goodness about the value you bring to the people you call and you’ll see the difference.

Having science prove that cold calling works, if you make sufficient calls, should make picking up your phone just a bit easier. Using proven phone scripts will help make your calls more effective and keep you on the straight and narrow call after call.

So should you spend a bunch of time making cold calls? That’s your call to make.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Maureen Sharib

    “That’s your call to make.” <- Loved this and loved your article, Jeff. You touch on something few want to think about; much less talk about – that inner needling doubt most of us have about our own competence. Thanks!

  2. Joshua Jones

    Excellent piece, Jeff!

  3. Keith Halperin

    Thanks, Jeff.
    “•The quality of the list is a major factor.
    One qualified appointment, or referral, came from every 209 calls”.
    There is no mention here of a good call or a bad call affecting the results appreciably. Consequently, I take this to mean that to succeed: you need to have a good and accurate list (Maureen can certainly help you with that), and crank out those calls.

    Speaking of which, last week I spoke with an outfit that does lead gen/appointment setting. They do an average of 1000 calls/week (similar to the 1045/week equivalent listed here), and charge $7.00/hr for a two week minimum. How much is YOUR time worth, Folks?

    Cheers,
    Keith

  4. Jacob Madsen

    Interesting article.
    Hmm first and foremost not sure what article is advocating, that cold calling is good, efficient and the way forward or… ?
    If we look at the numbers quoted in Baylor University study.
    Out of 7.5 hrs/209 calls resulted in a referral or qualified appointment, and 1 out of 58 calls resulted in referral or appointment.
    To me this is bad maths and show evidence of a significant amount of waste, and not terribly good use of time and/or efforts.
    What would have been interesting to know is what the referral or qualified appointment leading to, as still a long way from this to a fee and/or a hire that would result in a fee.
    How this stack up financially is beyond me, and I fail to see how there is truly any ROI in the efforts put in.
    Those that talk about the agency model say that fundamentally the entire set up and structure upon which built is flawed and not really not long term viable.
    With agency employee yearly turnover in many places at least 30% and with always substantial amount of open agency roles, evidence of a not particularly healthy business model, for certain more or less any other industry apart from those where B2C related would find such numbers shocking.
    Having on a Linkedin group just seen the sentiments expressed by in-house/corporate recruitment people’s annoyance, anger and frustrations with agents that cold-call and/or circumvent established PSL’s I can assure you that agents get no where when applying such methodologies and/or show disrespect of established structures, they simply get shunned and shot down instantly.
    For that reason I (and with that many of my in-house colleagues) cannot for a second understand why agents keep in 2013 applying same methods as those used in 1990. Conclusion must be that for those fees paid versus the amount of work/effort put in and considering the huge amount of waste that someone is charging too much and too dearly.

  5. Maureen Sharib

    Jacob asks an interesting question and those of us who cold call every day for a living in our industry are best suited to answer, I feel.

    For this we are fortunate.

    Calling that research “scientific” (although I respect the attempt!) probably wasn’t the best title they could have given the effort seeing that the “list” chosen was “generic, random” and not exactly a great medium for any kind of control you’d want to set to a “scientific study.”

    What was it? A phone book?

    Not marketed to? How’d they know that?
    Not marketed to by whom? Them?
    Exhausted by other callers?

    Oh! Maybe it was a “DoNotCall” list.
    I always suspected those were just “another list” to call…now I know I’m right!

    ;)

    Be that as it is I still give them credit for trying.

    Few do on this subject.

    Here are my numbers.

    Much depends on the industry and time of day I’m calling.

    If I’m calling rocket scientists 1-2 out of 10 might answer in the 8-10am timeframe and then again in the 3-5 hour slot before they go home. 1 in 50-75 MIGHT deign to listen to the “opportunity” my customer wants pitched to them before they inform me they’d have to go home and talk to their wives to see if it’d be okay to give up their $200k salaries and their benefits and pensions that are heavily weighted into them staying on and then they’d have to think about it some more and when it’s all said and done it’s a “Nah, I think I’ll stay put…”

    If I’m calling sales people about 1 in 2 will answer in the 7:30 – 9a.m. timeframe (sometimes this’ll push out to 9:30 or 10 or so but as they’re on the phone too (at least the successful ones are – it quiet downs pretty much after this) but then most of them leave their cell phones on their VoiceMails so I can chase after them on the road and most of them answer their cell phones too unless of course they’re with a customer but if I leave a VoiceMail they’re pretty good about calling me back – so when I do get them on the horn and pitch my customer’s “opportunity” to them pretty much close to about half of them are willing to listen to a next step call from my customer so those numbers are usually pretty good…

    As you can see and as you’ve heard it said (“There is terror in numbers,” writes Darrell Huff in How to Lie with Statistics) numbers can pretty much be twisted to say just about anything you want them to say so it’s pretty much in the mindset you have about cold calling that you’re going to find reason to do / or not do it.

    I choose to do it.

    I find it worth the while.

    I have nothing better to do with my time.

  6. Keith Halperin

    @ Everybody: I think we’re talking “apples and oranges” here.
    Jeff is discussing lead generation/appointment setting which is one kind of cold call, while Maureen is talking about a deep-sourcing cold call, which is a different kind entirely.
    Lots of folks “dial for dollars” and the calling ability is less important than the list quality and calls made, but very few can do what Maureen does, where the call quality is critical.

    Cheers,
    Keith

  7. Mitch Sullivan

    The major problem with cold-calling in recruitment is that for the most part, the service being sold isn’t very good.

    To keep the maths theme going, agencies only enjoy a success rate of 30% at best and 15% at worse. So if an agency is, on average, only filling around 1 in 5 of the jobs they secure from these cold calls, those future calls are going to get progressively tougher – especially if calling a company who previously have been among the 80%.

    Trying to sell any product or service that’s only going to work 20% of the time is always going to be very difficult.

  8. Jacob Madsen

    I have little doubt that your figures may be right Mitch,but it only leaves me the more baffled, how does this hang together financially? As for quality of calls, anyone at the receiving end of the majority of these can testify to them being so basic, so completely without an ounce of insight and understanding of business, subjects and/or industry that they mostly not worth spending 30 seconds on. All I can say is what a waste, a waste of time, effort and ultimately money. If agencies die out and become obsolete, it is because majority of them have brought it on themselves.

  9. Richard Araujo

    I see no issue with cold calling, it just needs to be used when necessary and appropriate. It is, in the end, the only way to reach some candidates. But it is also as pointed out here very time consuming. Fortunately it’s not an all or nothing proposition, although my guess is some people approach it as if it is. I’m doing a lot more of it now that I have a few higher level positions to fill, I’m not going to be doing it in the near future when all I have on my plate is mid to lower level position.

    The math in the article does not seem to add up. Even at 58% voicemails, say taking 30 seconds each, and the remaining of the 209 averaging 5 minutes a piece, you’re still well over 8 hours of work just in phone calls. If you can stay on the phone all day, I guess it could be worth it. I can’t, so I have to pick and choose where I use this tool.

  10. Edward Sussek

    I’m sorry, but I have found cold calling to be a waste of time. I know I hate to get these calls and I suspect candidates do as well.

    I usually contact people through email and invite them to respond if they are interested. From there I set up phone calls.

    I get about a 30% response rate but all are interested enough so as not to waste time

  11. Keith Halperin

    Once again, Folks:
    Are you referring to cold-calling to get new job orders or cold calling to reach candidates?

    @ Richard: you pointed out something important, the math seems in error-
    209 calls x 5 min/call = 1045 minutes devoted to calls = 17 h 25 min, not 7 h 30 min.

    450 minutes (7 h 30 min)/209 calls = 2 min 9 s/call.

    58 completed calls X 5 min/call= 290 min = 4 h 50 min

    160 min (2 hr 40 min remaining in the day)/151 uncompleted calls = 1 min 3.5 s/uncompleted call

    -kh

  12. Mitch Sullivan

    Jacob, it hangs together for a number of reasons, some of which include:

    How specialised the agency is.
    How desperate the hiring company is.
    How many cold calls the the non-specialised agency is prepared to make.
    Luck, or more kindly, laws of average.

    I think there are still a lot of businesses out there that accept they need to talk to several agencies about the same vacancy to increase their chances of filling it, and so just accept the 20% success rate each is likely to have.

    Unfortunately, that kind of behaviour/thinking just feed itself.

    It’s a behaviour that is massively reinforced by the recruitment training industry, whose best interests are served by recruiters always having to cold call, given that this topic forms the basis of most of their training.

    The best way of reducing the amount of cold-calling an agency does is for that agency to keep clients coming back. But they’re only going to come back willingly if they know their needs are going to be met.

    Most agencies don’t know how to sell or deliver ‘Definitely’. They only know how to sell and deliver ‘Maybe’.

    To paraphrase everything I’ve just said – what you’ve got today is a recruitment training industry that is selling shit to shut-ins.

  13. Jacob Madsen

    Back in the day of own agency recruitment I applied that 80% of my business came from 20% of my clients, why once I had bent over backwards to win my clients and obtained their trust, I could work for them on a continuous basis and only spend 20% of my time cold calling. I also walked away from 30% of assignments as I knew I could not fill the role. It was the o n l y way I could see the whole thing being viable.
    I would not last 10 minutes in the current agency market, I would crawl the walls in frustration as to amount of waste.

    20% (or optimistically 30%) success rate can at no point irrespective of fee be said to be a sustainable business model, why I simply cannot fathom how agencies are in business, how they can make any money yet alone keep a business going

    Anyone care to explain to me the maths of this, because I do not get it.

  14. Keith Halperin

    @ Jacob: “I simply cannot fathom how agencies are in business, how they can make any money yet alone keep a business going.”

    You hire newbies on straight commission or low-salary draw against commission. They get candidates off boards or from low-cost board-scraping RPOs with board access, etc. and dial for dollars to sell them at 15-20% to clients too ignorant to know there are much more effective and affordable alternatives, like going directly to the board scrapers for $225/week. Most of these newbies wash out, but a few succeed at some level, enough to keep the owners going. It’s the “Spaghetti Kitchen” Model- throw everything against a wall that you can (maximize send-outs) and hope something sticks. I started out in recruiting for a company like this many years ago, and they’re still around.

    No Cheers,
    Keith

  15. Jacob Madsen

    Thank you Keith, I am very familiar with the model you describe and have seen it in action and how set up and simply cannot believe my eyes, as it in at least 60 to 70% of time is a complete waste of time and effort (lack of understanding, misunderstanding, and zero value add client and candidate side) Here in UK agency recruiters usually have a 1/3 base salary and 2/3 commission and at times a 3 month guarantee (of commission) why I struggle to see even with the odd fee that is financially viable.
    I wonder what the bigger/longer term implications being, for one candidates of a certain level will run a mile when subject to junior recruiters than simply cannot answer the most basic questions. I have in excess of 100 agencies I will never ever touch on basis of having people with whom very challenging to lead a conversation as they apply 90% juniors to 10% middle to senior agents (middle to senior no guarantee of ability to have informed dialogue) As said before model and structure totally flawed.

  16. Keith Halperin

    @ Jacob: model and structure totally flawed” “…longer term implications “. Indeed they are, but in the long run, (as Keynes said) “we are all dead” and in the meantime (say many), there are clients to plunder, candidates to manipulate, and newbies to exploit, because I’m a “a hard-charging, self-starter who goes for the brass ring, and not just the low-hanging fruit. I boil my own ocean, eat my own dog food, and don’t get lost in the weeds. I have Positive Mental Attitude, say ‘Always Be Closing’ and will manifest my success through ‘Selling Greatness’!”

    -kh

  17. Conni LaDouceur

    Great discussion! We are passionate proponents of qualified, on-target lists which we develop for companies for hard-to-fill roles, supplementing secondary research (internet/database) with primary research (phone sourcing)and conducted simulataneoulsy to save time. Here is one example:

    Top 5 RPO Company: Fortune 100 Global Technology Manufacturer Client, Identifying Process, Production & Reliability Engineers

    Total target companies 10
    Total # of people identified 139
    Total on-target individuals 45
    UN-identifiable online 26
    Placements/Hires 2

    Of the 45 qualified/on-target identified, 26 or 58% could NOT be identified online. Additional placements/hires to be made from this research at no additional cost.

    Phone sourcing is not necessary for all recruiting but can be a secret weapon for those challenging, long-standing roles that require reeling-in the truly passive talent.

  18. Maureen Sharib

    What Conni just said.
    In spades.

  19. Keith Halperin

    @ Conni: I like how you include the unidentifiable.

    Cheers,

    Keith

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