Is Cold-Calling Really Dead?

A new survey of 700-plus leaders of service firms had some surprising results about generating sales leads

by Karen E. Klein

How do successful companies generate sales leads? How important is branding when it comes to getting new business? Is cold-calling really dead? Mike Schultz, principal of the Wellesley Hills Group in Framingham, Mass., posed these questions and more to readers of his marketing and sales Web site, blog, and newsletter.

The responses he received from more than 700 professional-service leaders compose a new report, What's Working in Lead Generation (a free summary is available at his Web site, www.raintoday.com). Smart Answers columnist Karen E. Klein spoke to Schultz recently about what he discovered through the survey. Edited excerpts of their conversation follow.

Your survey summation concludes that company branding is a big part of generating new business. Why?

Well, we asked these CEOs and VPs of marketing and sales whether their firm was "very well known" to their target audience, or "not very well known." The majority—70%—said they weren't very well known, while only 30% said they were very well known. We equate that kind of widespread reputation with being well branded in the marketplace.

And what's interesting is that there was a strong correlation between being well branded and reporting that your company is "good" or "excellent" at generating new leads. In fact, 66% of companies that said they're well known in their marketplace also say they're good or excellent at lead-generation, but only 44% of companies that aren't very well known checked off good or excellent when it comes to getting new sales leads.

Why do you think that is?

Well, the bigger and better your reputation in your industry, the better your lead-generation efforts will work. And this held true, in the survey results, no matter the size of the company. This was equally true for large and for small firms. If you're a player in your industry—writing, speaking at conferences, networking—you're going to be setting trends, you're going to be well respected, and your marketing efforts will be well received.

You saw something of a similar correlation between businesses that were positive about generating new leads and those that were very familiar with their target markets, right?

Yes. Most service firms aren't selling to 7.5 million boys between the ages of 17 and 27. They're selling in a much more narrowly defined, manageable, business-to-business market. So they may have identified 400 companies who would be potential buyers, and 77% could identify a general profile of those companies.

But when they were asked about getting more specific with their target markets, only 58% could give the titles of the decision-makers they needed to reach, 55% knew the names of the specific organizations they wanted to target, and only 30% knew the names of specific decision-makers they would target in generating new leads.

And again, there were strong correlations. Firms that rated themselves good or excellent at lead-generation scored much higher than average in knowing their target audience. More than half, 51%, of those firms knew the actual names of decision-makers at their target. But that figure dropped to 13% for companies that rated themselves poorly when it comes to generating sales leads.

What does that tell you?

Companies spend a lot of time trying to avoid cleaning up their databases, but if you have done this research and you have the information and it's clean and updated, it opens up a whole world of people you can target with your sales and marketing messages. That's eye-opening, or it should be, for CEOs who are arguing with their marketing staffs about where their priorities should be. Should you focus on whether your new brochures are teal or purple? Or should you be cleaning up your sales database and going after new business?