This posts is specifically addressing the value of cold calls for ad agency new business.
My background in advertising, for the majority of my career, has been spent in the area of new business. I never had difficulty making cold calls. As a matter of fact I have a gift for it. A natural ability to be persistent without being a pest. Some of my best new business acquisitions came as a result of cold calling. That being said, as it was then and even more so today, cold calling for ad agency new business is not an efficient method.
A definition from Wikepedia:
Cold calling is the process of approaching prospective customers or clients, typically via telephone, who were not expecting such an interaction. The word “cold” is used because the person receiving the call is not expecting a call or has not specifically asked to be contacted by a sales person.
Many of those charged with the responsibility of new business are forced into a dependency upon cold calling as a new business tactic. Cold calling is only necessary if your agency principal(s) refuse to differentiate the agency from its competitors and create an appealing position for a specific target audience. Cold calling is often necessary if your agency doesn’t have a consistent new business program.
Tim Williams, founder of Ignition Consulting Group , and author of the book, “Take a Stand for Your Brand”, tells it like it is in his recent article, “The End of Cold Calling:”
“Ask any agency principal what he or she dislikes and avoids the most and the answer will almost always be the same: cold calling new business prospects. Not only is this the most dreaded activity among C-level agency executives, it’s also among the least effective.
Cold calling has always produced only modest results and today’s avoidance-enabling technology only makes it easier for prospects to hide from your phone calls and ignore your e-mails. I routinely hear from agency principals how traditional new business prospecting methods are becoming less and less effective.”
We are in an amazing paradigm shift in advertising and also in the way agencies acquire new business. Cold Calling has never been the best way to acquire new business. It generally only produces modest results from lots of effort and is even less effective today with the growth of social media. In my opinion, social media is the death nail to cold calling for new business.
The fundamental issue with agencies is that they think clients think about agencies. They don’t.
Clients think about business, marketing, messaging challenges. They think about deadlines, costs, roi. They think about job security, whether the product will work, what their clients think, and so on. Of course cold calling doesn’t work. But telemarketing can. The rub is that the content of the message is as important than the medium and what better way to express yourself than thorugh a well tuned voicemail message that is relevant and in context. So trying to eliminate cold calling rule number one: Agencies, stop talking about yourself.
The best telemarketing calls address that particular prospect’s top 3 issues. Such as: (Private Bank as role playing)
“Given the recent fiscal uncertainty and potential overall consumer mistrust of the investment banking industry, you may want to re-think your current ad campaign. It has your customer sleeping on a beach. I don’t think many affluent, and astute consumers are sleeping these days. In fact, according to research, xyz, they are typically are hard working, street-wise professionals that run a business. For the ones falling asleep, it may be too late. While I appreciate you are trying to convey peace of mind, there is little to none at this moment. Perhaps you’d be interested on how XYZ agency can help you quickly adjust the message.”
Now, I wonder if that is too cold?
Interesting post which I cannot fully agree with.
First, it is true that cold calling (for me as well) is the most annoying and least enjoyable thing to do when launching a business. This is what I did all summer when launching FreeFolder, with, I’ll agree, very mediocre results.
But unless you have a large business network then I do not see how else you’d want to acquire business.
What would you recommend? blogging?
Morgan, Thanks for your comments. I believe we have seen a paradigm shift in the way new business is acquired. Instead of pursuing new business it is about positioning your agency to be found by your best prospects. To do this effectively, and in a short period of time, an agency has to make some tough decisions. How to go to market, what is our best, and most desirable point of differentiation. For one agency, it was a expertise in marketing to women, their creative director is one of only 3% of female creative directors in the country. 85% of all brand purchases are made by women. This agency’s target audience was male advertisers, who were missing their best consumer group women. The agency developed a blog site called She-conomy (www.she-conomy.com) A Guys Guide to Marketing to Women. They are using new media tools to drive traffic to their blog and are increasing their agencies footprint. They are generating inbound leads from this effort with very little money, just time. It has given this small agency a regional reach. Prospective clients are calling on the agency in a way that has not taken place before. They also have a much stronger platform to pitch against other agencies. This is only one of many examples I can give in how emerging media is great for new business, particularly for small and mid-size ad agencies and PR firms. There are also personal benefits and professional benefits for participants that further enhance this method. As I mentioned, I’ve been good at cold calling. I’ve had success with it but I’ve never had any method work as well as new media for generating leads and providing a tool that compels agencies to do things they should have been doing all along. Differentiate! Identify their best targets, lead with benefits rather than capabilities.
Morgan,
I just received a forwarded email from one of my clients. It was from a prospect and the prospective client had this to say:
“Also, I just wanted to tell you that I like what you guys are doing over at Locomotion. You guys are starting to build some buzz. I rarely heard anything about Locomotion until the past year so I thought you guys might want to know that your efforts are making an impact.”
The buzz has been generated through the execution of a new media plan for the agencies new business. Another agency, Off Madison Ave is generating 5 inbound new business leads per day using new medial.
I agree that the power of social media isn’t debatable. Where I disagree is that social media replaces cold calling. It is not a zero sum game. Social media has increased the toolbox. In fact, social media combined with a solid outreach program makes the overall program much stronger. Relying on cold calling in the past meant actually getting in touch with a prospect. Today, a finely tuned message can point a potential prospect to your blog.A strong business development professional uses the phone as a way to reach prospects that may not be touched by your social media efforts. I think that the idea that cold calling is dead (this has been said many times before, everytime a new method comes out) is really wishful thinking because NOBODY (at least most professionals) LIKES TO COLD CALL. But stopping this highly personal outreach is probably a mistake.
Keith,
I always welcome a differing point of view and glad to that we can have discussions such as this. We’re all better for it.
I’ve made cold calls most of my professional life and have had a gift for it. It is not an efficient method to reach prospective clients for ad agencies. This is truer today than ever before. Social provides the best return on my time investment for the generation of leads than any tool I’ve ever used. I’m a strong believer and advocate because it works for me.
Agreed. Efficiency is low, but when you start to utilize tools like Twitter, LinkeIn, Jigsaw, etc, success rate goes dramatically higher. Also, ability to do research on prospects, looking at their social media activities, helps to make the initial call “almost warm”. I’d just hate to have people believe that their social media strategy can replace cold calling completely. And, maybe what I’m talking about isn’t really cold calling anymore. Thanks for the great content Michael!
Thanks again for your input Keith. Give me a call sometime and lets discuss further.
I have heard that cold calling has been “dead” for a while. I disagree. Couple of things:
1. Cold calling has to be seen as a marketing tool. It can’t be seen as a “results now” platform. It has to be viewed as a long-term approach. You are trying to build relationships and awareness for your agency and its experiences/capabilities.
2. Cold calling is part of the entire business development mix. PR, social media, regular email program with current clients and “influencers, etc.
3. Cold calling should not be “blind.” If you have done your work, researched your target, have “true connections” to the brand through previous work and have significant insight, you will do well. I hear that it takes 100 “cold calls” to make one acquisition, in our case that is not even close.
Basically, is it better to make cold calls part of your strategy or wait by the phone and pray that it rings during these tough economic times?
Jeremy,
For some ad agencies cold calling is a necessity because they refuse to identify their target audience, create an appealing point of differentiation. They choose to sound just like everybody else. If you try to appeal to everyone, you appeal to no one.
Hi Michael
So far, 3% respond positively ‘often’ to cold calls (say 66% of the time), 28% respond ‘sometimes’ (say 25% of the time) and 33% respond seldom (say 10% of the time).
Fair percentages do you feel? if so, then 12.3% of all cold calls will get a positive response. Let’s down that to 10% to make the maths easier. If 25% of these opportunities turn to a pitch (our stats) and agencies win one in three of these, then an agency would need 12 of these ‘positive responses’ to win a new client.
That, given a typical 100/10/1 sales ratio means that an agency new business person needs to make 12,000 cold calls to win a new client. THAT’S the problem, they simply don’t have the time. Never have. Of course, those 12,000 cold calls should be to a well defined target audience over decent time period. If the accounts won are big enough then it’s worthwhile. They just shouldn’t do it themselves!
I agree with Keith Bossey. Cold calling can’t be replaced, but it can certainly be enhanced.
Using social media to research your prospect makes the call much warmer for you, but by definition, the prospect still doesn’t know you, so it’s cold.
He will, however, appreciate that you know what you’re talking about.
I think cold calls, too, have a bad rap. I think when people think ‘cold calling’, they think of some call by some guy who knows nothing about them or their needs. This, unfortunately, is true much of the time.
If YOU come prepared, it’s still a cold call to YOU since you’ve never spoken to the prospect, but it’s already slightly warm to him since you’ve done your homework and have found a way to connect. He may not even realize it’s a cold call if you’ve done it right.
Beth
cold calling died about 10 years ago. 90% of c level execs dont even p/u the phone and the ones that might, dont want to talk to you. I know from experience. 🙂
For me it’s all about inbound marketing these days. Done right, highly qualified prospects come to you, rather than you trying to call them.
But I was surprised the other day when two BDMs from seperate creative agencies bot told me, independently, that they did cold calls every day. one quoted that he got one appt for every ten calls, not bad.
After years of cold calling techniques – some effective, some not – the reality of it is (for me) is that a prospect is always open to call if you make at the right time. Timing rules in cold calling.
The success ratio of calls/leads/wins has never been earth shattering – if you look at just those metrics.
The fact is, one call that generates $1M account is worth the 100’s of ineffective ones. No one calculates that in mix, though.
Peter,
Thanks for your thoughts. I was always a good “cold caller” but there are many other tactics that provide a greater return on the time invested. Plus I believe we are going through a paradigm shift that will make it even more difficult to have success with cold calling.