Cold Calling Success
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BUS642: Business Research Methods & Tools
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Date Submitted

Cold Calling Success
Many industries rely on cold calling in one form or another in order to secure new leads to potential customers. It is a relatively cheap way to introduce a product or service to those who are looking for a type of product, or those who may be in need of that service. It is critical that callers be upbeat and understand each person they contact should get the same enthusiasm and personal attention as the first call of the day. Cold calling is most often successful when the people making the calls have a solid understanding of the companies they represent, the products and services they are offering those they contact, and are well versed in adapting their scripts on a case by case basis.
Background Information Cold calling has always been an inexpensive way of reaching out to potential customers in order to persuade them to purchase a good or service from a business. Companies frequently buy lead lists, which include the contact information for potential customers and may be tailored to the needs of the company. For example, a pest control company may purchase a list of names and information about people who have just purchased a home. These people have been prescreened to potentially need such a service, so they are a god solid foundation for cold calling. A cold calling strategy is more than just picking up the phone and speaking to a person. A caller must realize that they need to have a well formed script and approach in order to be successful. Often, people feel as though these companies are interrupting them, so these companies need to have a good plan of action when discussing the company they represent and the products as well as their value to the potential customer (Blount, 2015). Without this, all calls are doomed to fail. A caller will need to capture the attention of the person they are calling, and treat each call as though it is a potential sale. Often callers feel as though they are frustrated or will never close a call, so they approach the call with fear and dread. These calls rarely result in any positive outcome for the company or the potential customer.
Management Dilemma Managers understand that only a fraction of the calls made will result in actual customers, but they are responsible for training people to make a sales pitch that is effective, offers a service or product that contains value, and presents the company in a positive light. This requires effort on all parties concerned, as a successful sales pitch will require many elements that are efficiently delivered by someone to a potential client. Cold calling is seen as telemarketing, no matter the business or what they offer, and reps are often uncertain during calls, creating a lack of understanding between the rep and the potential customer (Blount, 2015). Management is often concerned if it is their reps that are responsible for this lack of closing, or if the lists of potential clients they are receiving are outdated or oversold.
Ethical Concerns Whenever research is conducted, it is critical to identify the outcomes and the processes that the information were taken from as ethical. Technological innovation allows us to share information with anyone around the world fast. The primary advantage of internet research is the ability to obtain vast amounts of information at very little cost in comparison to previous methods (Williams, 2012). We have the ability to find all kinds of information that were not readily available in the past, or were cost prohibitive. Now, the internet has allowed us to find information, seek sources, and see what others have done in the way of research on a subject. This allows researchers to compare notes, see what has been done before, and look at the data in an objective manner, in order to try to determine if it was obtained in an ethical manner. The internet allows is to cheaply find all kinds of information on any subject. The ease of access and search capabilities make it a good place to begin any research. However, the problem lies when we are determining what types of information are reliable and the manner in which these studies have taken place. Tampered information can be both intentional and unintentional. While there is no real viable to determine if every piece of research we read or choose to utilize was obtained in an ethical manner, we need to use common sense and critical judgement when reviewing information. A study that falls well outside the typical results may seem like a great article for the opposition of the other studies, but these extreme results are typically a red flag that should result in further investigation. Another problem is the environment that study participants are asked to provide information. The environment research takes place in can have an effect on the outcome (McClaren, 2015). The same question worded differently can yield completely different results. This is why it is important to keep those giving answers as much information pertaining to the study as possible, and ensure they have a clear understanding of the questions and the responses that are given as options. Ethical concerns are a part of our daily lives, internet research allows us to gain quick access to an unmeasurable amount of information, and we need to do our best to ensure we are using material that is accurate.
Research Question and Hypothesis The broad research question seeks to identify the reason behind declining closing rates with cold calling. This seems to be occurring across the board, not just with one company or with one industry. Over the years, declining closing rates have led to frustrated companies who are seeking new ways to incorporate technology and people in order to rebuild closing rates. Hypothesis: Closing rates on cold calls have gone down significantly due to the ability of those making the call to remain upbeat and seek a connection with potential clients. Previous research has shown a closing rate decline over the last few years, and this hypothesis seeks to identify the main cause. Upbeat sales reps who know their product or service as well as their company will have a better chance of success than a person who approaches the call with fear or a defeated attitude.
Previous Research There have been many articles about cold calling in today’s business environment. Technology has allowed consumers to reach companies in a new way, allowing them to be exposed to new products and services all the time. Those responsible for making cold calls often feel as though they are interrupting the lives of those they are calling, so they try to be fast with their sales pitch, but there should be much more than just a pitch in order for a cold call to be successful (Gitomer, 2011). Establishing the company as a strong player in their industry that is trustworthy and worth the time and money of the potential customer is a strong point that is often being overlooked. Companies who choose to cold call often get a bad rap or are thought to be a part of a scam. This is where the reputation of the company plays a vital role in how successful a cold call will be. A company with a strong presence that is mostly positive will have a better overall result than a company that has a questionable reputation (Blount, 2015). Even with the perfect script, the perfect sales representative, and the perfect company reputation, cold calling general results in very few overall sales. This is why companies often purchase a vast amount of names and phone numbers, so that all the effort that is put forth will yield some results. Cold calling is selling, selling is an action that needs to be taken seriously. In order to successfully sell someone who knows nothing of the product, you must speak with them about the product (Sobczak, 2013). The fear that arises from interrupting people to speak about a product or service you are offering will only further kinder the results. A good marketer will know that they are the front line when presenting items to potential customers, and they need to back their products.
Secondary Data For this research study, I will be using some secondary data. I have data that has results, success rates, for different industries, and I will be comparing this against the information that my survey yields. While I will inquire as to what closing rates are per company, many may not offer this information so I will need some verifiable numbers to compare industry results to reasoning. It is critical that I source information that is both relevant and ethically collected, as using false or skewed results will not have a positive impact (Williams, 2012). The use of secondary data will allow me to pull my research against the verifiable work of others in order to indemnify potential reasons for declining closing rates.
Survey Plan I have created a list of 20 local businesses that will take the survey I have created. Ten of these businesses are small, under 50 employees, and the other ten are considered large, over 50 employees. As a prescreening measure, I have made contact with these companies, inquired about their use of cold calls, as a yes or no answer, and set up a time to spend 15 minutes with them to do an interview. In order for my survey to be effective, it must be presented to all companies in the same manner (McClaren, 2015). Each were contacted with the same question about cold calling, and only those companies that aid they used cold calling in their businesses were considered for an in person interview. I have also set up a phone survey, where I will call 100 businesses across the country, in an effort to obtain results from outside my home area, and record their results. The survey given to those on the phone will be identical to the one given to the local group, as the questions should be asked in the same way in order to ensure there is uniformity (Garrett, 2014). These phone interviews will also be cold calls, as I want to see how companies treat an incoming cold call, this could yield some results as to why cold calls are perceived to always be a negative thing. The survey will be given to each person that I make contact with that has the ability and power to speak on the subject, and all actual results will be used without company identifying information; in order to preserve the integrity of my survey, and also to obtain results that can be given freely, not just a part of company public relations.
Survey Inclusion The survey is designed to take about 15 minutes to complete. The purpose here is to get enough information to make an accurate analysis, but not take up too much of the company’s time, as to rush or push their answers. The first couple of questions deal with the industry the company is in and their overall number of employees. This allows me to break the results into two groups: larger businesses that have over 50 employees, and small businesses that contain less than 50 employees. After this, the survey asks the company to explain what cold calling means to them and whether they still use the tactic. From there the questions are about training those who make the cold calls, and finally some summary information about their success rates and whether they believe these numbers have dropped over the past year. He survey does have open ended questions, as I did not want to put words into their mouths, instead I wanted what they believed was an answer that was most relevant to their company. Overall, 200 surveys were attempted, and while some companies refused to do it at all, some asked that I email them the survey and they would complete it, so this provided a different avenue of data collection.
Analyzing Data In order to best analyze data, I will need to combine all the results from my in person surveys, my over the phone surveys, and those that opted to email their completed surveys to me. I have a total of 143 completed surveys. While each survey was the exact same, the results will be divided up into two main categories. Business size seems to be a large difference between the results, so results will be analyzed in two separate categories, small businesses who employ 50 or less employees and large businesses who employ 51 or more employees. Analysis will include comparing and contrasting the differences and similarities in these two groups. I will use statistical analysis when evaluating the quantitative data, as this will give me a good standing of whether companies still believe that cold calling is a viable method for reaching out to potential new customers. From there, I will compare the success rates between companies in relation to the training those who make the calls receive and determine if there is a correlation that can be deemed significant. In addition, I will explore what types of information callers have when marketing their company to potential customers, and their overall feedback regarding success and failure.
Results
Each survey, whether in person, over the phone, or email, was exactly the same. All questions were presented to each contact within the business, in an effort to reduce bias. In total, 143 surveys were completed. Because the overall results varied depending on business size, results were broken down into two main categories: large businesses and small businesses. For the purpose of this study, a business is defined as large when it employs 51 or more total employees. Based on this requirement, the following chart represents the total number of survey responses in each category.

Each company was asked to identify what industry they primarily do business in. The chart above displays the results for each category of business, with the majority of survey respondents identifying as belonging to the technology industry. I found it to be important to understand which industry each company belonged to, to identify if different industries had overall different success rates, or if these rates would be similar regardless of the industry. All surveys indicated that the company was familiar with cold calling, and they all contained similar definitions. The most common definition for cold calling was reaching out to people who had no previous experience with the company or their products and services, and attempting to get them to purchase a product or service from the company.
All organizations offered training to the employees that were responsible for cold calling, many with specific programs in place in order to prepare individuals to cold call successfully. When asked about the success rates in relation to cold calling, many businesses had different reactions to cold calling. The two charts below show the results of each business type in relation to their interpretation of success through cold calling.

These charts demonstrate the largest difference between large and small businesses. The largest percentage of responses for large companies demonstrated no results when cold calling. While small businesses reported large positive results overall. Most small businesses put more faith into cold calling than larger businesses. This is usually because these smaller businesses rely on cold calling to reach new streams of revenue. Whether they are reaching out to individual clients or potential new places to get their products into a location, cold calling is driven by the need to make sales to succeed (How three companies, 2013). Generally, larger businesses have the means to utilize other areas of marketing that small businesses do not have access too, or the money to secure. This means that small businesses rely heavily on cold calling to see their businesses grow successfully.
Success rates were heavily dependent on what each business hoped to achieve with their cold calls. Even those who made few sales considered cold calling a success when they reached out to potential clients and expressed the benefits of their good or service. Many companies shared that getting their name out there, even when a sale wasn’t made, encouraged those individuals to keep that business in mind when there came a need for their type of product or service, this was especially true for smaller businesses. All the businesses contacted said they give training to those making the cold calls, and most had a script in place for contacting people. When asked about their cold callers and their feelings towards making many of these calls, larger businesses said they hired marketers specifically to make cold calls, while small business cold callers had other tasks within the company. This meant that large businesses hire specifically for cold calling and smaller businesses generally include cold calling and other tasks for their employees. This led small business cold callers to have a deeper understanding of the business, and a connection that large business cold callers lacked.

This chart displays the reasons that were given for a lack of success. While most businesses did agree that there has been a decline in overall success rates over the last 10 years, not one company could explain exact reasoning as to why they though that gap had occurred. All companies said they would continue to use cold calling, but the advancement of technology has led to other areas where potential customers can be reached. Social media and the internet have allowed businesses to reach more people than ever, creating the potential to contact customers through these platforms without relying strictly on cold calling to get their products and services seen by others (Xie & Lee, 2015). While cold calling sales are dropping, most businesses still feel they are an integral part of their daily practices.
Results and the Hypothesis My original hypothesis stated that closing rates on cold calls have gone down significantly due to the ability of those making the call to remain upbeat and seek a connection with potential clients. After surveying 143 businesses, both large and small, the data collected rejects the null hypothesis. While most businesses have seen a decline in overall success rates when cold calling, the person making the initial call was ranked overall the third reason out of four, signifying that there is another cause for these declining rates that is not associated with the person making the call or their attitude to approaching the call. Most companies believe that the main reasons behind these decline rates are due to increasing technological use with better methods and the attitudes of those who are being called. This study can safely reject the null hypothesis, that cold call closing rates are significantly lower due to the attitude of those making the call and their connection with potential clients.

Conclusion Cold calling has always been an inexpensive way for businesses, both large and small, to reach out to individuals and present their product or service. Years ago, this was the best proven method of contacting people, because the internet was not as prevalent as it is today. While most companies still cold call, whether they believe it is a truly successful venture differs between large and small businesses. Larger businesses have less faith in cold calling, but still continue to use the process. They hire individuals strictly to make cold calls, and have detailed training programs and a script that these employees must follow. Small businesses who make cold calls usually do not hire specifically for cold calling, the employees that cold call are also responsible for other tasks, meaning they are more invested in the company and have a deeper connection. This could be a reason why cold calling seems to be more successful for small businesses who do not have as large of a marketing budget as larger businesses do. The reasoning behind declining success rates is still somewhat of a mystery, but most businesses still attribute this to better connection methods that technology has given us. The hypothesis, closing rates on cold calls have gone down significantly due to the ability of those making the call to remain upbeat and seek a connection with potential clients, has been rejected. The survey results do not show that the reason for the decline has anything to do with the individual employees who make the calls or their attitudes when they approach a cold call. This study included a strong point, of breaking businesses down into two main categories. This allowed differences between small and large businesses to be identified. A weak point would be the total number of respondents. In order to get an accurate account of reasoning and cold call methods across the country, future research should include many more surveys, allowing for a good overall assessment. While successful cold calling rates have gone down over the last ten years, most businesses still believe that cold calling is a critical piece to their overall success, and will continue to engage in these practices for years to come.

References
Blount, J. (2015). Fanatical Prospecting: The Ultimate Guide to Opening Sales Conversations and Filling the Pipeline by Leveraging Social Selling, Telephone, Email, Text, and Cold Calling. John Wiley & Sons.
Garrett, D. C. (2014). U.S. Patent Application No. 14/301,144.
Gitomer, J. (2011). The new cold call -- it's definitely not cookie cutter. Grand Rapids Business Journal, 29(49), 8.
How three companies make cold calling work. (2013). Business Journal Serving Fresno & the Central San Joaquin Valley, (324647), 26.
McClaren, N. (2015). The Methodology in Empirical Sales Ethics Research: 1980-2010. Journal of Business Ethics, 127(1), 121. doi:10.1007/s10551-013-1871-3
Sobczak, A. (2013). Smart Calling: Eliminate the Fear, Failure, and Rejection from Cold Calling. John Wiley & Sons.
Williams, S. G. (2012). The Ethics of Internet Research. Online Journal of Nursing Informatics, 16(2), 38-48 11p.
Xie, K., & Lee, Y. (2015). Social Media and Brand Purchase: Quantifying the Effects of Exposures to Earned and Owned Social Media Activities in a Two-Stage Decision Making Model. Journal of Management Information Systems, 32(2), 204-238. doi:10.1080/07421222.2015.1063297

Appendix
Cold Calling Survey
How many employees does your company have?
What industry is your company in?
What does cold calling mean to you?
Does your company use cold calling to contact potential new clients?
Who makes these calls?
How are those who make the calls trained?
Do those who make the calls have a script?
What are your closing success rates?
Do you think closing rates are different than what they were 10 years ago? If so, why?
Is cold calling an important part of business?
Has cold calling been replaced with other tactics? If so, how do you reach potential new clients?