Cold calling effectiveness in direct and indirect selling strategies

Cold Calling

Selling strategies continue to go through a rapid transformation away from being purely driven by the sheer volume of cold calls, opportunities and leads that a sales professional can manage to more focused series of strategies aimed at building and strengthening trusting relationships over time. Cold calling has often been associated with sales professionals who lack empathy and attempt to push their products or services on customers before fully understanding their needs or the context of their strategies (Nettleton, Pham, 2005). Cold calling is in fact a highly effective strategy for gaining greater insights into customers' needs and continually fine-tuning discovery-based selling strategies (Petru, 2009).Cold callings' effectiveness continues to be proven in both direct and indirect selling strategies, successfully moving prospects into sales pipelines (Hersch, 2014). Cold calling is pervasively used across direct and indirect channels, proving its effectiveness in service-based businesses as well (Wohl, 2003).

Direct vs. Indirect Selling Strategies

Direct selling strategies are based on a manufacturers' or service providers' direct selling strategies to customers and clients. Direct selling strategies have the advantage of providing an exceptional level of control over each phase of the selling process, from initial customer contact to closing a sale. Direct selling strategies are ideal for companies and service providers who have an exceptional level of complexity in their products and services. Typically the greater the complexity of a given product or service, the more likely companies will rely on a direct selling strategy. For all of these advantages however, there are the issues of scaling a direct selling strategy effectively on a regional, national or global level. This is especially the case in complex selling cycles for enterprise-level products including Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) and large-scale supply chain automation and management systems. Despite these drawback of scalability and intensive level of insight and intelligence needed to fuel direct selling success, gross contribution margin and profitability is often higher when selling using this strategy. Direct selling strategies are well-aligned with best practices in cold calling, especially in service industries (Wohl, 2003).

Indirect selling strategies rely on a network of distributors, dealers, value-added and volume-based resellers. As a result of their distributed nature, they can scale quickly across broad business, geographic and market segments. A well-orchestrated indirect selling strategy can exponentially increase sales and rapidly grow a customer base. Indirect channels are more capable of providing manufacturers and service providers with global footprint to further support sales, and set the foundation for long-term product and customer service as well. Cold calling quality varies drastically throughout indirect channels as many distributors, dealers, value-added and volume-based resellers have varying levels of sales training and resulting selling skills. Creating and sustaining an effective indirect selling strategy needs to concentrate on creating a highly effective approach to ensuring sales performance consistency and stability.

Analyzing Cold Calling's Effectiveness

Cold calling's reputation of being no longer relevant is unjustified and driven more by a fundamental misunderstanding of strategies that can deliver results. Clearly brute-force selling techniques are highly ineffective in that they are predicated on driving prospects through a selling cycle with little or no empathy (Hersch, 2014). Contrary to this popular misconception of cold calling techniques, they can be used effectively for listening to customer needs and building rapport with prospects. One of the most effective approaches to creating and sustaining this type of cold calling strategy needs to be based on a deliberate strategy of active listening and planned question scripts to get the most value out of every call (McLuhan, 1999). Cold calling in direct selling scenarios provides sales professionals with the ability to interact with prospects and deliverable value insights over attempting to coerce customers to buy more (Wohl, 2003).