A sales call is either cold or hot, and nobody wants to make a cold call. Fortunately, there is a way to make nothing but "hot calls," with a fantastic rate of return. The secret is referrals.
In the tough insurance climate we face, our challenge is to get in front of the right people -- the decision-makers -- as quickly as possible. In a highly competitive environment with demanding customers asking us to do more for less, we need to find a way for customers to value our services and knock out the competition.
It doesn't matter whether we're selling insurance to businesses or to individuals, whether we're selling annuities, life insurance, business succession, or health insurance, whether we're selling to corporations or public entities. The issues are the same.
Everyone loves to get a referral. We are pre-sold, the competition is either thrown out or diminishes, and our sales time collapses. We have trust and credibility, we can cross-sell more products and services, we will be referred to others, and we are no longer viewed as a commodity. If we ask for and get the kind of customer we want, the referred customer will be less price-sensitive and will focus on the relationship and services we provide. And we get a new customer over 50 percent of the time. Many producers report an 80 to 90 percent conversion rate from prospect to customer when working with a referral. No other prospecting strategy can claim these results.
When producers call prospects they've gotten from a list, they may convince themselves it's a "warm" call. Make no mistake: There's no such thing as a warm call. If the prospect doesn't know you and is not expecting your call, it's cold.
Consider the following situations:
o You call someone because you got the name came from a colleague or friend.
o You call someone and then follow up with a letter.
o The person's name came from a specific list.
These are all cold calls -- the person doesn't know you and is not expecting your call. Even though you think you've been able to avoid sounding like a telemarketer, this type of call is still cold. And cold calling is a numbers game. If we make 100 calls, we'll talk to about 20 people, schedule 10 appointments, and, if we're lucky, close one new deal. That's a 1 percent return on our time.
Not only does cold calling have a low-percentage return, those who make them and those who receive them rarely have a positive attitude about cold calls. Recent research by Huthwaite surveyed sellers and buyers about their attitudes on prospecting and found the following:
Sellers
o 63 percent of salespeople say cold calling is what they most dislike about their jobs.
o 88 percent of salespeople work for companies that think prospecting is important.
Buyers
o 91 percent of buyers never respond to an unsolicited inquiry.
o 71 percent of buyers find cold calls annoying.
o 88 percent of buyers will have nothing to do with cold callers.
o 94 percent of buyers couldn't remember a single prospector or message they had received during the last two years.
Obviously, cold calls aren't working. In fact, why would you settle for the illusion of a "warm call" when you can make genuine hot calls? Referrals are hot calls!
A call is hot when there's an introduction. The person knows who the caller is and is expecting the call. This is the kind of call that shortens the sales cycle, increases your credibility, results in qualified prospects, and means a new client more than 50 percent of the time. Why would you waste your time doing anything else?
Here's how to generate hot calls:
1. Make a list of everyone you know -- current clients, past clients, peers, neighbors, service providers, friends, past co-workers, volunteer groups, etc. You should have at least 100 names. Prioritize the list so that the people that you know the best are at the top.
2. Set a goal and decide how many people you will contact each week. Arrange in-person meetings if possible.
3. Tell your referral sources that you are building your business through referrals and would like their help. Describe your ideal client and ask for one or two people who meet your description.
4. When your referral source makes a suggestion, find out as much as you can about the person and his company.
5. Then ask your referral source to make the introduction. The introduction could be by phone, in person, or by email.
Start thinking about how you spend your time and the type of payoff you want. The more you ask, the more referrals you get. And the more referrals you get, the more your income increases.
Joanne S. Black is the author of "No More Cold Calling -- The Breakthrough System That Will Leave Your Competition in the Dust." Ms. Black is a sales strategist, business consultant, seminar leader, and the founder of No More Cold Calling(R) LLC. For more information visit www.nomorecoldcalling.com.
