Cold calling is the process of contacting sales leads without any prior interaction. It is contrasted with warm calling, where a line of communication has already been established in one way or another. It’s important to note that cold calling isn’t solely limited to phone calls—other channels like email, SMS, and door-to-door sales can also be used for cold contact methods.
Cold calling limitations
Cold calling is one of the more limited means of marketing or selling a product. Many government agencies in countries around the world have restrictions around when cold callers may attempt to call prospects, the information they must provide when calling, and the actions they must take depending on the prospect’s response.
For example, if a prospect in the United States says they want to be put on a “Do Not Call” list, the cold caller will be prohibited from contacting them again. Otherwise, the caller may face legal consequences with the U.S. Securities and Exchange Commission (SEC) and/or the Federal Trade Commission (FTC).
Aside from the legal ramifications of cold calling, there are many other limitations that make it a less effective marketing channel. Most significantly, cold calling often has poor returns. This practice has a 2 percent success rate, compared to 20 percent for solid leads and 50 percent for referrals. Sales people who make cold calls often spend countless hours attempting to reach prospective customers, and the proportion of leads who turn into customers is usually relatively low. There is no prioritization of prospects, so a lot of time is wasted. Additionally, cold calling is a very time-consuming process. Other marketing efforts like email automation and digital advertising are more hands-off once the campaigns have been configured, so marketers can spend more time working on other projects.