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Cold Calling vs. Outbound Calling - What's the Difference?

What is Cold Calling?

Cold calling is a technique used by salespeople to contact individuals who have not previously expressed interest in the offered products or services. Cold calling typically refers to solicitation by phone or telemarketing, but can also involve in-person visits, such as with door-to-door salespeople.



“Cold calling” and “outbound calling” are frequently used interchangeably. With both types of calling, you pick up the phone, contact a prospect, and hope they give you the go-ahead when it comes to your sales pitch.


However, while cold calling may be as quick and simple as grabbing a script and an industry phone list, doing a good job with outbound calling has a depth of thought and preparation behind it.


Let’s compare it to gardening.


Cold calling is tossing out a handful of seeds and hoping that a couple take root.


Outbound calling is doing your research on soil conditions, climate, and seeds, choosing the perfect combination, then planting, fertilizing, and cultivating.


Which one do you think produces the better harvest?


Continuing with the idea of gardening prospects through calling techniques, let’s take a look at how successful sales teams grow, nurture, and harvest their leads through outbound calling.


Your Market (Soil Conditions)


Making a cold call can sometimes happen in a vacuum. Instead of taking time to get to know your prospect, you just dig right in. That’s like heading out to your backyard, taking a glance at the ground, then regardless of whether it’s rocky, soggy, or full of grass, tossing in a handful of seeds and hoping for the best.


Outbound calling takes into consideration the soil conditions – that is, where your lead is going to grow. Data-driven research can make your calls smarter, which makes them more efficient and more likely to close the deal.


In an extremely simplified example, even the greeting used when making a call can have an impact on success.


For example, data reports show that saying, “Did I catch you at a bad time?” makes you 40% less likely to be successful with scoring a meeting. (Speaking of data and bad timing, morning isn’t a great time for calls; around lunchtime or at the end of the day is better.)


When you’re cold calling, the goal is volume, so you don’t necessarily have the privilege of using data and choosing to make calls in the most successful timeframe.


Working with an outsourced sales team gives you access to their data analysis and expertise, so you can incorporate it into your business goals – getting the right message to the right audience at the right time, as a way to increase their likelihood of conversion.


Your Communication (Seeds)


Cold calling is about volume.


It’s about finding 5,000 prospects, in hopes that 50 of them say yes to a pitch or a meeting, so that maybe five will decide to sign up for your product. Does that sound depressing?


It should. Cold calling typically leads to a 1% success rate when it comes to getting a meeting, and even fewer of those prospects actually end up signing a contract for your product/service at the end.


In sharp contrast, outbound calling using an account-based strategy is all about sowing your seeds when conditions are right, and finding the seed that fits your soil and climate.



Outbound calling vs cold calling-1



Technology makes cold calling harder and intelligent outbound calling easier. Buyers don’t always like being caught off-guard with a cold call on a product that they may or may not have expressed interest in.


By following up with an intelligent outbound call after a potential buyer shows interest through an online or chat interaction, you’re able to ensure your calls are going to people who have an affinity for your service. After all, they just took time to research you.


When you begin communicating and making your outbound calls in this manner, you’ve already built the foundation for your relationship. In the same way, showing you understand the prospect’s needs based on information gathered through research and the initial interaction can help you continue to move them toward a sale.


Even without an online interaction, your outsourced sales team members can take a deep dive into prospect lists, research them, and personalize their communications -- all to the benefit of your overall results.


Instead of calling with a generic message, your outsourced sales team can build their confidence through personalization, referencing company news or a LinkedIn post (social selling), and modifying their pitch to reflect this additional knowledge.


Your Timing (Planting)


An old nursery rhyme about planting says, “One for the rook, one for the crow, one to die, and one to grow.”


That seems like a lot of waste in hopes of getting one decent plant, doesn’t it? Cold calling without a data-driven, account-based understanding of your potential clients can yield similarly bleak results.


The High Cost of In-house Cold Calling


It’s not financially reasonable to expect your in-house team to focus on making cold calls. It’s not because your team can’t handle it; it’s simple economics.


Eighty percent of phone calls go straight to voicemail, and statistics suggest that sales reps spend a large portion of their time leaving those often-ignored messages.


If you’re dedicating an internal team member to making cold calls, you’re tying them up for countless hours every month when you could be using their skills for in-depth conversations, demos, and discussions with potential buyers once they’re farther down the sales funnel.


Working with an outsourced sales team in a strategic fashion can help you reduce that workload on your team, because you’ll be relying on them, and they’ll be relying on data to help them call smarter.


What Does Calling Smarter Mean?


Even if you have the perfect soil, you’ve researched your seed types, and prepared your garden bed, you’re still probably not going to have great success if you plant bell peppers outside in the middle of winter.


Timing matters when it comes to calling as well. You can dig into data analytics about the best time of day and best day of the week to call your prospects.



Best time to call



Somewhat humorously, research suggests that there’s no good time to make a cold call, based on the dismal ROI (remember, only 1% of cold calls actually lead to an appointment). Warm calling, or what we’re calling intelligent outbound calling, is a different story.


With outbound calling, the biggest statistic that matters is “how soon.”


Outbound calling can be used to follow up with prospects who interact with your content online (downloading a white paper, registering for a webinar, etc.) or who talk with a sales chat representative. In these cases, the sooner you make your call, the better.


Outbound call teams report the highest success rate when they make a call within an hour of the prospect’s interaction with the company. With an external sales team, you have the capability to capture a prospect’s initial interaction with your resources, then strike while the iron is hot by initiating an outbound call and capitalizing on their expressed interest to set up a discussion.


Follow-Up (Cultivation)


Even though intelligent outbound calling generates higher success rates than cold calling, it’s not always going to be enough to seal the deal on its own. It can move you forward to the next step, but like any good farmer, you’ll need to continue cultivating the relationship and feeding it.


Instead of dedicating time to cold calling a massive list, spend part of your time reaching out to targeted and well-researched prospects. Then, dedicate your other resources to following up, whether through email, social selling, or additional calls.


According to HubSpot, leads nurtured with targeted content see a 20% increase in sales opportunities.


When you’re working with an outside sales firm, the continued follow-up and nurturing they provide allows you to keep those seeds sprouting and growing. In fact, outsourcing sales is 43% more efficient than working with an internal team alone.


Nurtured leads both convert more and spend more, which means the additional time spent by your outsourced team to build the relationship isn’t an expense; it’s an investment focused on generating a higher ROI. That’s both because your outsourced team has high expertise in nurturing leads, and because of the resources they offer.


Dedicated quality assurance resources are the specialists that go in and nurture your seedlings by pulling the weeds from your garden bed. They observe sales team efforts, then work with the relationship manager to deal with issues that arise or to update communications if they see similar objections or concerns trending during conversations with prospects.


And, your outbound sales team’s dedicated training resources are like the Miracle-Gro® you can add to already-hearty plants to ensure they blossom and grow even more fulsomely.


When trainers work in tandem with the rest of your managed sales team, they’re able to see what works when engaging with prospects, then coach the rest of the team to ensure those successful behaviors continue to flourish.


In a nutshell, cold calling focuses on volume, while outbound calling focuses on depth. To complete our gardening analogy, would you rather have quickly-grown mealy tomatoes, or put a little additional effort into producing ripe, flavorful heirloom ones?


Intelligent outbound calling is about quality over quantity, and it only makes sense that higher quality, leads to more success.


Is your sales team in need of more success?

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