Operations

How to cold call a client effectively – the road-map to success

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Effective Cold Calling

Cold-calling a client is often regarded as the equivalent of clutching at straws in terms of generating business – and research has shown that out of all prospecting methods, cold-calling is the least effective. The perceived wisdom against cold-calling states that it’s effectiveness disappeared when society moved into the Information Age and many sales gurus will state that cold-calling has not only become obsolete, inefficient, and ineffective it is actually counter-productive. Generating high levels of sales resistance as it often offends qualified prospects who may have otherwise bought had they been approached in a more professional manner.

For sure cold-calling is not for every sales team or every product or service, but for certain services, cold-calling is very effective in finding prospects willing and able to purchase and is an extremely effective prospecting tool. Because cold-calling, making an unsolicited business approach, either door stepping or by phoning, just like spamming, is surprisingly successful if done well and above all is targeted and qualified.

The general principles of selling apply equally to cold-calling and as in a normal sales call it is about building a business relationship around a mutually defined need. A financial salesman once told me that when he called ten clients and closed a deal on the last one for one thousand dollars each one of those calls was actually worth to him a Texas penny. That’s the way he looked at it. Rather than nine rejections each call was regarded as a success and precursor to the successful last one where the deal was made. However even against this positive outlook such an approach that rationalises the process as a numbers game and reduces the sales engagement to the equivalent of junk mail in the end will lead no-where.

The following are my top tips for being successful in your prospecting

Homework:

Firstly identify your market for your product or services then target buyers in that market – first base is getting to know to whom you will be talking to. Narrow the search and get an up to date list of potential clients along with contacts phone numbers etc. Be aware that your current clients competitors are a good starting point for new engagements.

Invest time in research about your potential clients The sales team need to be encouraged to research companies they are going to ‘cold-call,’ so they know something about the company’s business, issues and as a result their potential needs.

Doing the Call:

  1. The objectives of the call is to get the 30 minute appointment or a ‘call to action’ – a follow-up.
  2. Warm up the cold call by sending out a message that you will be calling (but do not say when). A cold call is better used for when you want to make a sale or make an appointment today – ‘I am in your area today so’ .
  3. Craft a good script and more or less stick to it – set down your exit dialogue and leave the door open preferably with a ‘call-to-action’. However customise the delivery and be contingent – the prospect may cut in and go directly to ‘so what can you do for me…’
  4. When starting the call get to the point and be efficient never ask how they are today – it sets of invisible alarm bells and gives them time to think of a response to fob you off.
  5. Smile and be pleasant throughout and you will feel better (and have higher self-esteem) and your client will feel that you are smiling through the inflection in your voice.
  6. Be nice to the gatekeepers and develop standard scripts to the objections they will throw at you. If you meet a new one (objection that is) that you have not heard before write it down and develop a scripted response for the next time it comes up.
  7. When you get to the Principal acknowledge a time limit and stick to it – ‘I know you have only 30 seconds so …’ Ask for the appointment and ask her to write it down.
  8. Do not say you will call a day before to confirm – just turn up at the appointed time. If something really came up in the meantime and you turn up, and the appointment is cancelled, the balance of power shifts in your direction and you should get the return match. Don’t forget to ask for the new appointment.
  9. Get lot’s of practice and develop a thick skin – I am quite serious – practice cold calling on your colleagues and get them to give you a hard time (they will need little encouragement). They will be over the top but never-the-less this will be invaluable training.

Prospecting is the foundation of any company’s sales approach and enables you to hit targets and fill the pipeline – it is the lifeblood of your sales process. Sales prospecting using cold-calling just like fishing requires that you find the fun in the game. What prevents sales people cold calling is often the fear of rejection that an abruptly ended sales call engenders. We need to turn this around – just as when fishing we rue the ten that got away all that is forgotten when we land the big one. Besides what has happened is the client has not rejected you she has lost the chance of a great deal for the short term ego boost that chewing out a sales rep has given her.

Potentially cold-calling is a means of identifying potential prospects for your sales efforts and is the reconnaissance before any battle begins and is an excellent method of qualifying potential leads. Cold-calling is not where the sale happens its where the terrain is identified and the process begins. It must be said that cold-calling is hard work and not particularly effective compared to other techniques such as networking however although the most universally despised aspect of the sales job if done well will pay very rich dividends

What is a Statement of Work (SOW)

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What is a Statement of Work

A Statement of Work (SOW) is a companion document to the services agreement that consists of a narrative description of the products or services to be supplied. A statement of work is a necessity as it refines the understanding between the parties as to what must be delivered and the terms and conditions to be applied. A Statement of Work is in effect a contract between the parties for the service delivery or of a commercial understanding of how to work together in a joint activity with a client.

The typical objectives of the statement of work are to enable the contractor to clearly understand the requirements and needs of the customer organization. You wouldn’t enter into a contract with a builder to make over your house on a smile and a handshake (I hope) and neither should you enter into a commercial relations to delivery a multimillion dollar project for a website development contract either. To be clear on this don’t trust a handshake or a verbal promise always document your understanding – it is far better to spend time arguing about what must be done before the work has started. If you’ve taken the proper steps to write a thorough statement of work then no surprises should occur on delivery when what was ordered is actually seen for the first time.

The Statement of Work spells out the scope of work to be done, the deliverables, the responsibilities of each party, and any fees for services to be rendered. The SOW is created once a client feels comfortable and ready to proceed with the project or activity and documents the joint understanding of what must be achieved at each stage. The statement of work (SOW) is a management product that formally documents the products to be delivered and the associated work units to be performed under the contract.

Typical contents are:

  • Aim and objectives of the activity
  • The scope of the activity and any limitations
  • Assumptions and constraints
  • Project plan and approach
  • Governance and review points including the project management process to be used to report progress
  • Deliverables to be produced including any dependencies
  • Due dates for deliverables
  • How deliverables are approved and what quality procedures are in place.
  • The commercial considerations

Requirement of a good Statement of Work

Normally a statement of work is employed when a simpler needs requirement document cannot be used and it must describe what must be accomplished in terms of the client’s requirements. Stakeholder needs, wants, and expectations are also analyzed and evaluated before being converted into requirements. There may be items such as, reporting requirements, commercial restrictions, market research, anti-competition agreements, geographic scope etc. that must be included. It must outline all applicable quality systems including quality review processes and acceptance procedures to be used, as well as the definition of the type and extent of control that is to be exercised on subcontractors should these prove necessary. On this latter point a sub-contractor must sign up to the overall conditions and the party concerned must warrant that this is the case. Overall a SOW identifies the requirements to be satisfied not the way they must be achieved leaving the parties free to use their own expertise and skill to achieve the desired result.

Creating a statement of work is not an easy task and can be time consuming but is well worth the effort. Do not trust to partner rhetoric that suggests leaving the difficult points to later never rely on such terms ‘spirit of agreement’ – it always ends in trouble. If a statement of work is too ambiguous, it can lead to misinterpretation and future problems and a major falling out. The failure write down expectations and then to properly execute a SOW is often the reason parties end up in a dispute and the major reason why this process must be well thought through and executed.

Should we include service credits when we design a service level agreement?

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Service Credits in a SLA good or bad idea?

In terms of a general principle it is not recommended to build into an SLA a so-called ‘service credit’ process. In such schemes, when the service measure falls below the agreed levels, a form of credit to the buyer is given.

As an example, a payment schedule is defined for, say, a 98 per cent service level and, should service be 95 per cent, a lower price band becomes applicable – I have also seen SLAs with performance credits, with increased revenue for a supplier should the ‘standard’ performance be exceeded. There are several reasons why this is old-fashioned and bad practice.

* First, the point of a service level is to define the required levels needed to support the business and no more. Improvement levels over time can be defined but the service needed is what the business should pay for – if it is exceeded you may have to increase your targets, but certainly not pay more for just doing the job.
* Second, with a service credit clause you have no leverage over the supplier to fix the problem. The focus should be to restore the service to the agreed levels as soon as possible.

Rather than a service credit clause, it is far better to put in place governance that forces the supplier to act to fix the issue, perhaps to the extent of the customer being able to call in independent consulting advice at the supplier’s expense to support service resolution. This use of an ‘independent’ adviser can be useful in monitoring the overall value of the outsource deal as it matures through its stages. It is important to include this in the SLA and agree the principles and ground rules for such an ‘independent’ with the outsource partner.

Your staff will often see the problems much later down the line if you get it wrong, as one of our research participants said:

“Because the company have these people, they’ve got professionals who only write contracts, and they know how to work them, and the client haven’t got a clue, eventually they tried using some outside firm of solicitors, to read through the contract, but it’s too late then, and even they might not have been professional contract people. And they still got screwed in the end, and they still don’t understand, nobody, I haven’t met anybody who understands what the hell outsourcing is all about, has it saved them a lot of money, no it’s cost them more, have they got an improved service, no it’s much worse, why? Why have they done it? They say ‘oh well we are saving money on pensions’, you are not, you’ve transferred the pension money over, ‘we’re saving money on accommodation’ well you’re not really, ‘we’re saving money on pay’ well you might be saving money on some aspects of pay but look at how much money you are paying the outsourced companies to run these things, and of course the classic mistake they made is, they’re paying for a fixed sum of money, millions of pounds a year, for maintenance of the existing system, nobody mentioned, changes to the system, like, I don’t want the machine here any more I want it in the room next door or in the new building, ah that’s a change to the contract, it will cost you an extra x hundred thousand pounds, and I think the contract in the first six months was something like thirty million over the estimate because they are moving things all the time, closing buildings, building new ones, every time you get a change of hierarchy, it’s new broom, right we will change all this we’ll have the (Dept.) over here and that group over there, we’ll swap those two over, and they do it regularly and it all gets charged!”

Royston