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.
When making cold calls, you need to know what you are offering, who it would benefit and how they would benefit from it. But the what, who and how really translate into the following 3 factors.
3 factors that influence your cold calling conversion rate:
- Your Pitch
- The Industry
- The Leads
1. Your Pitch
Your pitch is all about the ‘how’ in the what, who and how. If you want to boost your cold calling statistics you need to explain how the end user will benefit from your company’s product or service. And it must go beyond general platitudes of saving lots of time and money – you need to give them quantifiable numbers. For example, “Our solution has saved our customers on average $137 per hour” or “Our IoT device reduces loss of fresh food by 50%”. Give the listener a reason to want to hear more and not just hang up. Actual numbers (that you can back up) will catch their attention and get you to the next step of the sales process.
2. The Industry (and location)
Cold calling conversion rates are going to vary by industry, there is no way around it. It’s anecdotal, but we can share some statistics of 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 B2B SaaS software, but they 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.
When you are planning your Go To Market Strategy make sure that you are targeting countries/regions that have a demonstrated need for your product. Selling medicinal chemistry software is going to make more sense in a country that has a large number of universities. The client that we helped in this industry was based in Israel, which only has 5 or so major universities, so they knew that had to look internationally if they wanted to succeed.
How can you work on increasing your chances of having the highest conversion rate possible? That brings us to our next point.
3. The 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 or are targeting the wrong market.
Say you are offering unique presents for universities to give to important guests as thank-you gifts. Having a list of the chair of each department at various 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 answering cold calls. 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 let you pitch to them.
Not to confuse you, but depending on the solution it is the C-level executive that you want to talk to. You have an amazing solution to help protect servers and it’s exactly the type of solution CTOs that manage servers would want to use. But the CTO doesn’t have the budget for your solution, so you need to work with him on helping him sell the solution to the financial decision-maker in his company. This is not an issue as long as you understand the leads you are targeting, and have the right pitch for them.
Determining Cold Call Success Rates
Now that you understand how to improve your pitch, correctly target your sales efforts, and who to target – what’s to stop you from having a cold call conversion rate of 100%?
Nothing, in theory.
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). We got our clients meetings with all three of them – does that mean we had a 100% cold call 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?
Conversion rates for cold calls don’t always mean sales. A cold call success rate could be measured by the prospect agreeing to a demo or just coming to a meeting. In that case, you could have a 100% conversion rate and still have 0 sales.
This is why there needs to be a few KPIs when measuring your sales plan success. Cold calling conversion rates need to be quantified – does the conversion mean a sale or just getting the lead to the next step in the conversion funnel? Having the right KPIs will help you identify what you are doing right in the 3 factors mentioned above and what needs to be refined.
Interested in getting some help to improve your B2B business’ cold calling conversion rate? Talk to us, we can help.