Our Director of Marketing recently made a short video on how salespeople and small businesses can improve their cold calling conversion rate. The post sparked a lot of questions and conversations, so we thought it would be a great opportunity to discuss in greater detail what conversion rates for cold calls really mean.
There are three main factors that will influence your conversion rate:
- Industry & Country
- Qualifying the leads
- Whether it is B2B or B2C
Each factor influences the other two, as we will see.
Industry & Country. Conversion rates for cold calls are going to vary by industry, there is no way around it. It’s anecdotal, but we can share some rates for former KSW Solutions clients:
- Construction Industry SaaS: 20%.
- Medicinal Chemistry Software for Universities: 50%
- Call Center SaaS: 1%
As you can see, these numbers are all for software and are all over the place. Could you use any of these numbers to set benchmarks for your own similar company?
First of all, you don’t know what country(ies) these calls were made in. You don’t know what time of year they happened. You don’t know how well qualified the leads are.
We were doing sales for a client in Romania. As it happens to be, there were only 3 potential clients in the whole country (distributors who would be selling the products). Does that mean we could either have a 0, 33, 66 or 100% success rate?
Another time, we were selling medical devices in Belgium. There were only 10 distributors in the country who would buy what we were selling. If we set up calls with all of them, does that mean we had a 100% conversion success rate?
Let’s discuss this further.
Conversion rates for cold calls don’t always mean sales. Conversion rate could be measuring having the prospect to agree to a demo or just to come to a meeting. In that case, you could have a 100% conversion rate and still have 0 sales. But how can you work on increasing your chances of having the highest conversion rate possible? That brings us to our next point.
Qualifying your leads. You can have the best SDRs possible, but still not be able to set up a single meeting or demo – simply because you have bad leads.
Say you are offering unique presents for universities to give out as thank you gifts to important guests. Having a list of the chair of each department at a variety of universities isn’t helpful. You need to know who is in charge of purchasing. This could happen in the dean’s office in one college, or in the operations department in another. Qualifying your leads is the single most important step you can take to enhance your conversion rate.
But it goes further than that. Back to our university example – universities, like other institutions, have yearly budgets. If you find the right person, but they are 6 months away from doing their yearly spending, you haven’t done much to help your sale.
Also, make sure you aren’t aiming too high. We got a list of leads for software that was very useful in this particular industry. The leads were all CFO level. CFOs make big picture decisions, but they aren’t the ones fielding cold calls about buying such things. It’s easier to get a person lower on the totem pole to point you to the right person than to try and get a C-level executive to give you the time of day and tell you the right person to pitch to.
This brings us to our last point, which is who you are trying to pitch to.
B2B or B2C. If I had a choice of doing cold calls for a B2B business or B2C, I’d take B2B every time. Think about the difference in the types of calls you’ve gotten at work vs at home. B2B cold calls usually start off with a promise of saving your business time or money. B2C calls are trying to get you to agree to something – refinance your home or upgrade your internet package (these are the two most recent cold calls we received).
Businesses have a budget, and if they have proper business development they aren’t afraid to spend money to help them save resources down the road. When you approach a business with a great product or service that solves a pain point you know they have, you’ll have an easier time than hammering the phone trying to get a housewife to agree to a meeting where you’ll want her to purchase life insurance. Therefore, conversion rates for these harder to convince prospects are going to be much lower.
Again, the quality of the leads is going to make a big difference here. If you are calling to offer special rates for refinancing a loan, and you have a list of people who recently visited your bank’s site and submitted a form about refinancing, you’re going to have a much higher chance of getting them to come to the bank for a meeting, as opposed to just going down a list of all of your bank customers.
There you have it, next time you see promises of super high conversion rates, you understand why you should be skeptical about it and how you can ensure when you are doing cold calls, what factors to be aware of to enhance your success.