Starboard Commercial Real Estate

Hans Hansson | July 18, 2006

Is cold calling a lost art? Why do even the most successful salespeople fail to schedule cold calling as a daily top priority? The desire to skip cold calling is even reflected in book sales: a popular business book is called Give up Cold Calling for Networking. Salespeople today seem to find every way possible to develop new business except to cold call. Do they think cold calling is beneath them? Do they hold themselves to a higher standard than what cold calling requires?

We all know why we should cold call, yet we simply do not do it. Instead, we decide that a "warm call" is the better approach.

Cold calling takes patience, the ability to accept rejection, and a daily commitment of time in order to be successful. Because younger generations want immediate satisfaction and don't accept rejection well, cold calling seems to be thing of the past.

Things have changed since I started in the business in 1984. Today voice mail can either prevent a true cold call from happening or enhance the prospect of a warm return call if the right message is left.

Fewer and fewer firms have live receptionists, which again can be positive or negative. Known as the gatekeeper, a live receptionist can be the best friend or the worst nightmare for a cold caller. In the past, learning how to get through the gatekeeper was a training lesson in itself. The automated attendant has changed all that. Now with proper research, a salesperson may identify the correct decision maker and connect directly to his or her voice mail.

One of the best salespeople I know believes that salespeople are peddlers, and that as soon as salespeople understand that that's who they really are, they will break through the barriers that prevent them for being the best salespeople they can be. But most people today would be embarrassed to admit that they are peddlers. In fact, they are embarrassed to be called salespeople. Calling ourselves consultants or advisors is much more rewarding. As consultants and advisors, we cannot be expected to cold call, can we?
Posted 13 years, 4 months ago on July 18, 2006
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Comments on this post:

Re: Why Is Cold Calling so Difficult?
I think having a "sophisticated" title other than just a salesperson or peddler helps in cold calling. The good sounding title can take you to the "upper" chamber, the decisionmaker. A company president, for instance, would want to talk to somebody his level, or close. It also gives the salesperson a sense of confidence -- it's always good to introduce oneself as "Hi, I'm an Account Manager for Starboard."

I experienced this in my previous work. When my company president moved me to a newly launched magazine she decided I should carry the title Advertising Director instead of Advertising Manager. She did not even put sales in the title as in Advertising Sales Director even if I was in charge of sales. That worked -- I could cold call the top company officers and agency managers without difficulty. In a way they also felt a sense of importance that a high-ranking employee of the company they are dealing with would have the time to go and visit them -- not just the Account Executives.

I think this situation would apply a lot in real estate especially in commercial sales .

2006/07/22 by Alda • • Reply
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Re: Why Is Cold Calling so Difficult?
That's fine but again it takes away from what we do which is sales. Somewhere along the line Salesperson got a bad name we need to focus our attention on stressing that sales is a good thing that includes serving the client.

2006/07/24 by Anonymous • • Reply
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Re: Why Is Cold Calling so Difficult?
Its all about attitude, belief in ones self and the desire to make the deal happen.

2006/07/25 by David Wattell • • Reply
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Re: Why Is Cold Calling so Difficult?
Peddlers are people who sell from house to house. Real estate sales is a different process. Cold calling? "The anticipation is always worse than the reality, so just pick up the phone like your best friend will answer. That best friend just may have a problem you can solve for him."

2006/07/27 by Elizabeth wwwReply
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Re: Why Is Cold Calling so Difficult?
Yes you are right peddlers went door to door but thats what a commercial real estate agent used to do to get business it was part of our cold calling. Phone calls were considered not personal enough.

2006/08/29 by Anonymous • • Reply
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Re: Why Is Cold Calling so Difficult?
Cold calling is amazing, you will know what you are going to find out by just cold calling. For the most part, I find that people are nice. In many cases, people just thank you for calling on them and they actually mean it, especially when you have brought something of value to them.

Today, I was in Santa Clara cold calling. It was 90 degree weather and believe me, it was hot! My first call when I went it, I met with a guy who said he always helps sales people who get out of their cars on a day like this. He referred me to his CEO in a different building who I met with later, had a really good meeting, he didnt need my services, but he referred me to his previous company!

No doubt cold calling is one of the hardest parts of being a professional sales person. Added to that is the fact some days you feel great, since you have had great conversations with potential customers and you feel great about prospective business. Other days, life sucks!! You might have met 20 people that day, not one prospect worth following up!!??

This is the way I handle this and have come to grips with the situation: I try not to worry about whether I had a "great" or a "bad" day. I have a daily goal to call on new customers, as long as I have reached that goal, I just go home! Next day, repeat the process and stick to your goal, call on the same number of people, when I am done, go to Starbucks, have a cup of coffee, then go home! I am done! Of course, I cant help being happier when I have had a more productive day.

It all even itselfs out!

I think what we can do to make cold calling is easier by having the right attitude towards it. This is what I tell myself: Today I am going to have some great conversations with people, I am not selling anything today, I am just on a fact-finding mission. I am going to find out about some of these customers today, what do they need, who do they currently work with, do they really need my services, etc., Plus I am going to have fun just talking to people and getting to know them better as people, not just potential business prospects

It all even itselfs out!

Nice Guy

2006/07/25 by Just a Nice Guy • • Reply
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Re: Why Is Cold Calling so Difficult?
My goal in cold calling (commercial real estate) is always two-fold. 1. Since I know not every business or property owner I call on will have an immediate need, I want to make contact with the decision maker. This will result in a few outcomes. A. He or she will have a need; B. He or she will refer me to someone who has a need; C. He or she will have a future need, and I've made good face time for future follow-up.
2. To obtain as much information about the immediate market, i.e. who are the neighbors, who's building across the street, who just moved in 3 doors down, etc. Market knowledge like that has opened the doors to sales that would have never been possible otherwise.

With this kind of motivation, most cold calls do not end in rejection, but end in some form of valuable information that can be used to enhance my success as a salesperson!

2006/07/27 by Cory Spanko wwwReply
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Re: Why Is Cold Calling so Difficult?
Cold Calls are like going to the gym everyday. We all know we should but some days we just don't go. The bottom line is guys that cold call every day make more money and guys that go to the gym everyday are in better shape. It is really simple. Now why don't I cold call and work out everyday? I don't know.

2006/07/27 by Will Beaubien • • Reply
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Re: Why Is Cold Calling so Difficult?
I'm one of the "new thinkers" that believe cold calling is a thing of the past. However, I do think that cold-calling can be useful in certain situations (i.e. as a follow-up device). As real estate professionals, we have to be aware of the changes occurring in our industry and business in general. One of the most significant changes took place during the 1980's when the courts decided that real estate agents had a legal fiduciary duty to their clients.

Having a legal duty to look out for the best interests of your clients, is contrary to the sales approach or procedures that have been traditionally encouraged and utilized in the real estate industry. Additionally, real estate is getting more and more complex requiring real estate professionals to be knowledgeable in the fundamentals of real estate (which has absolutely nothing to do with sales). This is especially true in commercial, but applies to all areas of real estate brokerage.

Today's consumers are tired of being "sold" and demand that their real estate "advisors" treat them with dignity and respect and not as a "commoditized" source of commissions. Real estate professionals trade their knowledge, skills, abilities, and access to information in exchange for a contingency fee. However, real estate professionals can be compensated in other more conventional ways too (e.g flat fees, hourly fees, etc). This is no different than how many other service professionals are now compensated (e.g lawyers, consultants, accountants, etc.). Many service professionals are "salespersons" too even though they won't admit. Sales is just a part of doing business. So, it is correct to refer to real estate "salespersons" as "advisors" because truly that's what they are.

Real estate "salespersons" are often compared to other corporate salespeople, but there's a distinction that must be recognized. Thanks to the effortless lobbying by real estate industry groups, congress has recognized real estate "salespersons" as the only service professionals in the country to be legally classified as "nonemployees" or statutory independent contractors. This, too, is significant because it makes most real estate agents to be business owners of their own sole proprietorship or "real estate practice" even when affiliated with a broker. So, not only are many real estate agents "advisors" but they are business owners as well.

We must keep up with the changes and trends that are happening in our business environment and change accordingly. And cold-calling can, to a degree, diminish the real estate professionals' status as a true "professional."

2006/07/27 by anonymous • • Reply
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Re: Why Is Cold Calling so Difficult?
We are calling to make a sale. The company we are calling also has people out calling to make a sale. The fundamnetal axiom is - NOTHING HAPPENS IN BUSINESS UNTIL SOMEONE SELLS SOMETHING.
Given this unalterable fact then what we are doing by cold calling is making the world go round for everyone.

2006/07/29 by Harry McKeague • • Reply
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Re: Why Is Cold Calling so Difficult?
I have interviewed hundreds of successful commercial brokers regarding cold calling and I have concluded that the large majority do not "cold call" in the pure sense of the term. I have have tried to identify what they do do to be successful and in doing so I have identified 15 habits of top performers (audio CD available). Clearly, they all do business development on a regular basis. I have also concluded, after interviewing these successful practitioners, that there are many more effective techniques for generating business than pure cold calling and that the most successful veterans use these techniques. I have a workshop, "Growing Your "R" Factor" that reinforces these techniques for anyone in the business more than 3 years.

2006/08/03 by Ralph Spencer, CCIM, SIOR, Nat'l Consultant wwwReply
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Re: Why Is Cold Calling so Difficult?
I work with a Hosted CRM application provider the focuses on the inside sales space (InsideSales.com). Our entire application is build and designed to help sales reps (not necessarily telemarketers) effectively sell over the phone. This includes cold calling. I agree with the masses, cold calling is not fun. If done effectively, it can generate effective and somewhat cost effective leads. However, I have found that leads generated by cold calling are on average between 2x to 4x more expensive that a company or sales rep can generate via the web (if also done effectively). This is not the whole story though.

An example:

We have a customer that uses our system to power dial a list to generate leads. They were able to generate around 1 lead every 1.5 hours. Considering the cost of employees, systems and overhead, they were paying around $100/lead. From the web (using PPC, SEO, and lead providers) they were paying around $20/lead.

This seems pretty straight forward, go with the web leads. What’s more, the cold call leads seemed to be less qualified than the web leads. The web leads generated actual buyers. The leads generated from cold calling identified companies that were at the beginning of the interest cycle. Thus, in the short term the web leads closed better and seemed more effective.

However, they saw an unexpected reversal of value in lead sources. Even though the web leads were smaller opportunities and they closed faster and more often. The leads generated from cold calling we very targeted to the industry and size that that worked for this customer. This customer began to close deals greater than the sum of the smaller deals that came from the web from the same time frame. So in the end, cold calling generated more revenue and held its own compared to web leads.

2006/08/04 by David Elkington wwwReply
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Re: Why Is Cold Calling so Difficult?
I am a newbie in the real estate business and my experience has shown me that cold calling is positive action towards success. The process begins with finding a property you think can be sold. Then, find the owner of that property and a phone number to call. By this time you will have found out a lot of information regarding the property and the owner. Now comes the cold call. Now you are prepared for any outcome from the call. Whatever the outcome of the call, you are working as a realtor or as a salesman or as a peddler and with time you are perfecting yourself. The numbers show that this, in addition to marketing, is a money making system that works.

2006/09/29 by lorenzo mion • • Reply
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Re: Why Is Cold Calling so Difficult?
I agree that Cold Calling is difficult, but at the same time its very beneficial as well co no matter you generate the leads from the web but ultimately you have to call to the prospect.

I'm working for a company which creates marketing software for commercial real estate and it's really difficult to get the leads from searching the net and getting the right party contact..but yes it's makes you sound more confident in reagsrd to the companies information and what kind of company is that is also very important for the caller to make sure before calling the prospect ...
so cold calling has it's own advantages ....

2006/10/18 by Viktor • • Reply
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