The Financial Times on winning new business in a recession…

As many of you know I have been very busy speaking at sales conferences and sales seminars so I haven’t had chance to post this article before in which I was interviewed for the Financial Times of December 08. Virginia Matthews was exploring the need for small and large businesses to drum up more prospects and more opportunities in the current economic client and I think it is well worth reading her findings and conclusions.

There are many ways to gain new prospects and win new business and if your only way of winning new business is via cold calling then your business model is every bit as flawed as if you never cold call for new business at all… That said, professional cold calling skills and making legitimate new business calls, like the ones that I teach you how to make in my cold calling books, audios and programmes is an essential skill set for every sales professional and every business that wants to succeed.

In this article, James Caan, whom I have found to be a strong addition to Dragon’s Den, makes some interesting points not least that a sales person who cannot convert a cold call should probably not even be termed a sales professional and that he would not invest in a business which was incapable of cold calling...

A comeback for cold calling as chill sets in
By Virginia Matthews
Published: December 8 2008

When Robyn Jones was made redundant during the recession of 1991, she realised her future rested solely on her ability to cold call. Her confidence was then at a low ebb but she knew that, if she did not pick up the phone, her dream of setting up a catering company would never become reality.

Armed with a redundancy cheque of £2,500 but no clients, Ms Jones learnt that “getting through the gatekeepers” who protect decision-makers from unsolicited callers requires mental agility and charm. But the cold calls paid off and, today, Charlton House Catering has an annual turnover of £75m. “If I hadn’t gathered up my courage to phone strangers, which was quite tough, having just lost my job, I wouldn’t have created a business.”

As the recession bites, the practice of cold calling will become increasingly important, say Ms Jones. She believes that “having a good reputation in your industry is not enough when times are hard”. In order to make new contacts, generate leads and differentiate yourself from the competition, she says “all businesspeople need to forget their fear of cold calling and learn how to market themselves one-to-one, even when the person at the other end of the line is clearly skeptical”.

Serial entrepreneur James Caan, who appears on the British business television competition, Dragon’s Den , has a rather strict rule for start-ups. He will not invest in one if they are incapable of cold-calling. “If people don’t have the skills to convert a cold call into a face-to-face meeting or even a potential contract – and it’s particularly important to have these talents when you are generating sales in a recession – then I doubt whether they can even be termed sales professionals.”

He believes effective cold calling is a dying art among those more accustomed to the anonymity of the internet. But he argues that generating sales leads over the phone is far easier today than it was in the 1980s when he set up recruitment firm Alexander Mann from scratch.

Mr Caan says: “In the 1980s, there were literally hundreds of thousands of us using the Yellow Bible (Yellow Pages telephone directory) all day and it became fairly easy for personal assistants and other gatekeepers of the time to get rid of us before we were even halfway through our pitch.

“Today, cold calling is far rarer and the relatively small number of people who manage to talk their way past switchboard and into my office usually have something worth listening to.”

Mr Caan adds that the secret of cold calling may come down to the caller’s posture. “Too many so-called salespeople currently hide behind the internet when they should be getting on the phone and talking to people. I always encourage people to do it standing up because that way, you sound more in control and less like someone who has had the phone put down on you 20 times already that morning.”

The Institute of Sales and Marketing Management takes a less indulgent view.

“Cold calling can scare clients and make you look desperate and we believe it is even less appropriate in a recession,” says director of training William Pedley.

“We want people to be invited in to see their clients because they already have a good relationship with them, not because they’ve been rushing round like headless chickens trying to get appointments. We hope there won’t be a resurgence in either cold calling or doorstepping.”

Gavin Ingham, who coaches sales staff, trained 5,000 people in recruitment, IT and telecoms to cold call last year and says that, to judge by his order book for 2009, both the numbers and the sectors willing to get on the phone are rising.

“Aside from business start-ups, I’m getting requests from solicitors, accountants and even fire and rescue services looking to build their businesses and brands with a campaign of cold calling.”

Mr. Ingham has three rules however. “The WIIFM (what’s in it for me?) rule is there to remind you that it’s the person being cold called, not you, that’s the really important one, and the 10 second rule is all about making your pitch relevant and different right from the word go.”

And the third? “If you’re following up an e-mail, call your target within 24 hours or you’ll have to start all over again.”

©The Financial Times Limited 2008.

p.s. For more strategies and techniques for selling in a downturn market make sure that you read my free special report on selling in a recession.

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