Before you begin cold calls to generate new business for your agency, you’ll definitely want to read our below study on the effectiveness of cold calls.
We tackle some of the biggest questions. How many cold calls does it take to get an appointment? How many appointments to get a sale? How many calls does that mean it takes to get a sale? We run the math. This is pulled from data of when we ran a cold call team of 3 here internally back in 2013-2015. We called on midsize/enterprise businesses initially before converting over to call on agencies for our white label services towards the end of 2015. Speaking of which if you need a white label SEO, social media, or PPC company we should be your first stop.
Expectations of Cold Calls:
1. How Many Cold Calls Does It Take to Set an Appointment?
That Company’s best cold callers set 1 appointment set for every 65 calls they made. An average cold caller set 1 appointment for every 100 calls they made. These are averages over 2 years from 2013 to 2015.
2. How Long is the Average Sales Cycle of Cold Calls Appointments to Close?
The average was ~85 days from appointment to close for deals we closed.
3. What is the Average Close Rate of Cold Appointment to Close That Company has Experienced?
6.93% of appointments turn into a deal. (40 closed deals from 577 set appointments.)
4. How Many Cold Calls to a Closed Deal?
An Average of ~1,444 cold calls were made per deal closed. (This uses the average 100 calls per appointment metric)
5. How Many Calls Can the Average Person Make?
We established a modest goal of 10 calls an hour / 80 calls a day. This is 100% achievable. You probably could make 15 calls an hour (if you’re getting all voicemails).
6. What is the Average Deal Size That Company closed When Cold Calling?
$1,942 a month in services.
7. How’s the Math Break Out if You Hire Someone to do Cold Calls for You’re Agency?
Let’s say you hire someone for $10/hour and they make 80 calls a day, and they are averaging 100 calls to 1 appointment and you close 6.93% of the appointments into an average $1900 retainer deal that retains for an industry standard of 12 months what’s your ROI? (P.S. Our average client retains for 4+ years)
1,444 cold calls to get one deal divided by 10 calls an hour = 144.4 hours.
144.4 hours x $10/hour = $1,444 paid to generate one deal.
You closed a $1,900 retainer deal x 12 months = $22,800
Let’s say you outsource that deal and make a modest 20% (most white labels make closer to 40%) = $380 a month / $4,560 a year.
It will take you 3.8 months to break even.
Total profit is ~$3,116 a deal.
Note: Due to the sales cycle for cold call deals please be prepared to invest for over 3 months before you start to see returns.
Answer: Cold Calling is still a profitable model.An average cold caller sets 1 appointment for every 100 calls they made. Click To Tweet
8. So, are Cold Calls Really Worth it?
Yes, but only if you are targeting the right customers.
Example: In 2013 That Company closed a software company on a $6,500 a month deal that turned into $30,000 a month by 2014 (We have retained this deal since 2013 and they are still a present client. Calculating the $30,000 a month from 2014 to 2020 (6 years) we have generated $2,160,000 in revenue from this one deal alone. As a strategic partner with That Company who gets a 15%/20% commission you would earn $54,000/$72,000 a year respectively from this deal alone.)
Conclusion: Cold calls are tough. It’s not for the faint of heart or those expecting quick wins/easy results. However big deals are out there. From our experience, the only possible way to truly make cold calling viable is to go after big-ticket customers. Calling on small businesses and winning a $1,000 a month retainer is not a successful cold calling model from our experience.
We share the above statistics to be transparent with our partners and prospective partners. Cold calls are generally a means to an end of winning your first few clients to start generating some income. For most, it is not what they do forever. To produce long-term success as an agency means using the first few customers you win to help you reinvest and evolve to an inbound marketing model (promoting case studies/testimonials of the first few clients you won), requesting referrals from current clients, and upselling current clients.
The above statistics include a lot of lessons learned (We had 0 experience when we started cold calling. We had poor performing scripts, and dealt with poor quality contact info providers, bad cold call hires, etc.) Detailed below are the lessons we’ve learned. We share them here to ensure you have the greatest potential for success.
Here Are Our Top Tips on Cold Calls:
1. Track Your Stats/KPIs
How many calls today, appointments set, appointments showed up? Calls to Appointment conversion rate, Appointment to sale conversion rate.
2. Set Goals and Have an Accountability Partner
How many calls a day do you want to make? How many calls to get one appointment?
3. Keep a Spreadsheet of Your Conversations
Who did you get a hold of, what happened, what could you have done better? (giving yourself regular feedback is important.)
4. Constantly Improve Your Messaging.
We have provided you voice mails/emails to use, but feel free to A/B test your messaging.
5. Call and Email Folks 5 Times.
Consistency of being in their voicemail earns you an email response. Cold email is often ignored. I recommend a call followed by an email approach. We find if you are contacting people more than 5 times, you’re wasting precious time on folks who won’t respond, and if you’re contacting less than 5 times and you’re throwing away expensive contact data that you’re acquiring.
6. Automate/Build Templated Emails
Look at sending out with a CRM like Zoho. Being able to send an email in 2 clicks makes you incredibly efficient and enables you to make more calls a day! Check them out here – ZOHO CRM
7. Research Click to Dial Solutions
Especially ones that automatically dial for you. Look at providers like Telephony. This will increase your efficiency as well. – https://www.zoho.com/crm/telephony.html
8. Target Market:
Don’t call without a contact name as that leads to very low conversion rates and poor meeting quality (you generally don’t get the actual decision-maker).
Go after marketing contacts like CMO (Chief Marketing Officer), VP of Marketing, and Director of Marketing.
We don’t recommend calling Marketing Managers as they’re generally not good quality decision-makers.
Also, we don’t recommend targeting Presidents, CEOs, or Owners, in larger companies. They are tougher to get a hold of and refer you to their marketing department anyway. If you are actually getting a hold of the owner who is taking your cold call then their company is likely too small to be a quality candidate for services. Owners of larger businesses generally get inundated with cold calls and don’t respond to any of them.
We suggest going after companies 5 million in revenue or more to ensure they can afford services and become a larger customer.
We recommend targeting industries that meet the following criteria:
- Companies that have Big Ticket offerings. Meaning that when they make a sale it’s a large multi-thousand dollar sale and we can easily cover marketing costs.
- Local / Repeatable if possible (Your case studies/testimonials will have a compounding effect and you won’t be calling on competitors of your existing clients)
Here are some examples:
- Roofing Companies
- Lawyers (look for larger firms)
- Construction Companies
- Paving Companies
- HVAC Companies
- Solar Installation Companies
- Plastic Surgeons
- Lasik Surgery Companies
In addition, while not local/repeatable we’ve had partners do well targeting the following:
- Ecommerce Companies
- Software Companies
9. We Recommend Picking a Niche.
Picking a niche enables you to better craft your messaging, and it enables your work to compound. For example, once we create a case study from 1 client and get a testimonial from them it allows us to more easily sell future clients in that same industry together (as long as they’re not directly competing thus the recommendation for local/repeatable type clients).
10. Contact Acquisition
We have a lot of partners share they’ve been successful using toolsets like Lead Leaper with Linkedin to create their contact lists inexpensively.
That Company’s most successful method of Contact information generation (after testing many poor-quality providers) was to buy a list of websites that were spending $2,500 or more on Google ads from SEMRUSH (They sell this as a custom report for ~$750)
We then took that list of domain names to ZoomInfo and paid ~$1.00 per contact (email/phone/name/title/etc). Their model has changed a bit since we last made a purchase from then, and as we understand it, they have a minimum of around $5,000. However, the number of direct dial numbers they have, and the accuracy of their information is worth every penny from our experience.
Cold Calls Conclusion:
Our hope is that the lessons we’ve learned prove useful to you. We are here to support you on your path to success. If you have any questions at all, please reach out.