What is Cold Calling?

What is Cold Calling?

What is Cold Calling? Cold calling, defined

When a sales agent places a call to a prospective customer or a lead with only the name and number to go on, it’s usually known in sales as “cold calling” the customer. The term is often attributed to the military, where “cold” is used to describe weak signals in the radar. This is not far off with regards to sales. Agents already have a weak foundation when calling due to knowing very little of their prospect.

When placing a cold call, sales representatives usually have a sales script handy to help them overcome initial hesitation from the side of the customer. However, not all cold calls are randomly made. Some follow a generated list of leads that are already pre-researched or acquired by other firms and sold to the sales agent’s firm.

For example, an event organizer might place a cold call to a prospect whose number is written down on a guestbook of a wedding exposition. In this regard, while the prospect is not necessarily a bride-to-be, the event organizer knows that the lead is already interested in weddings and might become a customer soon.

Limitations of Cold Calling

In the USA, cold calling is widely regarded as an annoying and frowned-upon practice. In June 27, 2003, when the Federal Trade Commission launched the National Do Not Call Registry, 13 million Americans signed up for the service on its first weekend. Numbers who ask to be included in this registry may not be called by any seller if the owner of that number doesn’t already have business with the seller already.

Due to this initiative, any customer who requests to be put on the list because of a sales pitch for a car may not be contacted a mere minutes later by a vacuum cleaner sales agent without committing a federal offense. This limits the effectiveness of cold calling to current subscribers or buyers already.

In some industries such as securities, there are even specific rules about time and place of contact, as mandated by the federal government. Securities sales agents are also required to identify themselves and their firm fully and to completely state the investment they are selling.

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Patrick Hogan

Patrick is a Co-Founder & Chief Executive Officer of Tenfold.