Why are sales managers so insistent on cold calling? Why do some companies avoid marketing budgets entirely, mandating cold calling as a job requirement, even threatening termination for non-compliance? It seems counterintuitive to pay talented individuals a salary primarily to collect business cards or make endless phone calls. The reason lies in the often-overlooked dark side of cold calling, revealing the real motivations behind companies forcing salespeople to engage in this outdated practice.
Firstly, cold calling doesn’t cost the company money; it costs you. They avoid marketing expenses, shifting the burden of prospecting onto you. This occurs despite cold calling’s notoriously low return on investment, which ultimately leads to a smaller paycheck for the salesperson.
Secondly, cold calling saves the company time. Developing a marketing plan requires hiring additional employees, reassigning current staff, or outsourcing to a specialized firm. By making you cold call, they bypass these requirements, saving manpower and eliminating the need for external consultants. This forces you to waste valuable time on a low-percentage activity instead of focusing on more productive endeavors.
The irony is that attempting to save time and money through mandatory cold calling often ends up costing the company far more in the long run. It’s simply not profitable to have salespeople dedicated to an activity with consistently low returns. However, some companies persist, believing it’s a clever cost-cutting measure. In reality, relying heavily on cold calling is penny-wise but pound-foolish. It may offer short-term savings, but it carries significant long-term consequences. When cold calling is the primary source of new business, it can lead to lost profits, downsizing, and even bankruptcy.
Successful companies today avoid cold calling altogether. They implement marketing plans that generate qualified leads and provide those leads to their sales teams, who then focus on closing deals. This is the only sensible and profitable approach to sales in the 21st century.