Which is more painful and provides endless agony, a dentist's drill or cold call selling? The never-ending misery is caused by the pressure of repeatedly making cold calls. This is a one by one career ending defeat mechanism of insurance representatives. Find out why cold calling pressure to set up insurance leads has such an emotional and torture impact on millions of insurance representatives.
Yes, millions is correct. There are over 70 million health and life insurance representatives departing from selling yearly. A high portion is directly attributed to the torturous emotional toll inflicted by cold call pressure. Despite this, without any doubt insurance cold calling to set up sales leads is the overwhelming lead generation mode in use today. It has been the "authorized" practiced method 100 years ago, and cold calling will still be in existence for the next 20 years.
Why? You cannot beat cheap!
How it all starts
Truthfully, an insurance rep is told that leads are the name of the game. In addition, it is stressed that you need plentiful leads to make appointments, which lead to sales. Now it all changes. You are given the truth and nothing but the truth information where your instructor come close to passing a lie detector test. The info preached is that a special cold calling selling formula will direct the way to a financially rewarding career. You blindly follow this emblazed commandment because you want to follow your leader's commands, as he is the leader so it must be true. Alternatively, you are a natural born follower. Everyone else in the insurance office is cold calling so you think it must be a highly effective system. You are lectured the virtues of insurance cold calling so frequently you become truly brain washed.
The Magic Cold Call Formula
Not only are you brain washed but you are poked by a chart board pointer to stay awake and memorize the illustrated formula. This is custom designed for insurance representatives. Custom my butt. This cold call selling recipe is used by hundreds of industries hiring sales reps. Revealed here are mystery ingredients in the recipe for "guaranteed success".
1. Determine the money (commissions) you are going to earn. Take this amount and divide this by the average amount of commissions each insurance sale will bring. This will provide the answer to how many sales must be achieved each and every month.
2. The next step is to multiply your answer above by the quantity of sales presentations it will take you to accomplish an average sized commission on one sale.
3. Now it gets trickier. Multiply this new number by the number of cold calling attempts it takes you so an appointment is set up.
4. This is the actual number of cold call selling calls you must make every month.
5. Now you get a bonus break. Instead of dividing the cold call number by 30 days, you are so proficient, so you are allowed to divide it by 20. That is it. Now you know the minimum number of times you need to complete a phone call every work day.
Einstein was a genius that developed formulas that worked. This formula was developed by a college doctorate math major that never sold an insurance policy!
Here is why cold calling formulas do not work
There is no sales trainer or a team of mathematicians could never accurately determine what the answer for #5 above actually is. Therefore, your sales manager might develop in his head a cold call selling formula of making 50 cold calls a day. If your results are subpar, you are given two ego-pumping choices. Either complete sixty cold calls every work day or add Saturday to you schedule as another day to heat up the telephone. True studies show that in an hours time period, you will successfully complete a phone conversation with 10 people. If you complete 50 calls, you might say two to tell you they have an interest in your product. Since direct mailing is costly and returns a two percent reply rate at best, that would equate to only one lead, but you have two.
In the meanwhile, you have over 100 cold shoulders from complete strangers where the names were probably plucked straight from a white page directory. For every person that you completed a cal with, more than one cut your call short by hanging up on you. Getting rejected 100 or more times daily can make a superhero feel vulnerable, and at risk on developing telephonenitis (fearing of dialing a telephone). Uncomfortable turns to downright unnerving and distressing. Your brain starts working on your rational mentality. As you need at least two leads daily, you start confusing prospects with misleading suspects. To keep your mind from insanity, you also record these deluded suspects as leads for your file box.
What is a Lead?
A new agent, and many longer term insurance representatives learn what a true lead is. This is because using cold call selling and prospecting methods rarely turn out a true lead. In my definition, a lead is a request from a person, who without pressure, is interesting in finding out more about how insurance can fill an emotion need they have. More over the prospect has the financial means to make a purchase, and is in a receptive state to filling a gap.
Cold call pressure causes you to consider a prospect without all these qualities to be a bona fide potential client. Sadly, two leads daily rarely turn into two appointments each day. The calling sales rep is frequently stuck with cancellations and the misfortune no shows after driving all the way to the prospect's house. Whenever not all the lead requirements are met, this is when all the objections and "want to think it over" time stalls come about. A newer insurance representatives average 100 life insurance sales a year. Two sales a week will not keep you in the business.
Do you really think that overcoming telephone objections is important in cold calling? Cold calls lead to cold appointments. You can become the agency's best cold calling pro and never beat the production of more experienced agents that have learned their lesson.
"Prospecting is uncomfortable. Let's face it, we're all swamped by telemarketers who cold call on everything. We hate being on the receiving end, so we don't want to do it," he says. It's dread that thwarts cold calling -- a fear of not being perfect, of being yelled at, of making a fool of yourself. Some barriers are psychological, and there are people whose emotional makeup simply doesn't lend itself to the special stresses and strains of selling.
Cold calling destroys your status as a business equal
One of the things I've learned along the way is that in order to be supremely successful in the world of selling and to maintain a very high closing ratio, you need to project a very strong image that you do not need that particular customer's business and are ready and willing to walk away at any time. However, does making a cold call present the perception that you don't need their business? Of course not! When a prospect receives a cold call from you, it's VERY CLEAR that you need their business. To make matters worse, the perception out there is that important people with busy schedules don't cold call and don't have the time to cold call because they have more important things to do.
Is it due to arrogance? No! They do it because prospects see it, recognize this person as someone who is not desperate and does not need their business, and they automatically WANT TO BUY FROM THEM! This is the same reason why so many prospects will call into an office and immediately ask to speak with a sales manager or with the top salesperson in the office.
Cold calling creates the perception that you have nothing better to do at that particular moment than to try and scrape up business. It comes off as needy and desperate.
Cold calling limits production and wastes valuable time
One of the key differences between successful people and organizations back in the "Industrial Age" and the successful ones in today's "Information Age" is that the successful people and companies today are using the power of leverage to their advantage.
Although leverage is a topic that will be covered later in this book, understand that cold calling allows you to be in only one place at one time. In other words, you are only one person and can make only one phone call or walk into only one door at a time. The results you can produce are strictly finite and are severely limited by your time and how well you are able to manage that time. On the other hand, leveraging the power of systems to work in your favor allows you to virtually be in many places at one time. While cold calling gets your message to only one person at a time (if you're lucky enough to get through to someone in the first place), the proper use of leveraged systems gets your message out to a tremendous number of people at one time with little or no effort on your part. You create the system, put it into place, put it to work, and it then runs itself and automatically generates leads for you.
Here's the classic example of the non-leveraged, non-systematic method of activity planning usually taught to salespeople, even in this day and age:
Although this method contains a number of fatal flaws that will be covered later, the main and most obvious one is that it limits your production. If the total number of cold calls required exceeds the amount of free time available for cold calling, you're screwed. There are only so many selling hours in a day. Although you can't add time, you can exponentially increase your lead-generation efforts through the power of leverage, thereby beating old Father Time at his own game.
Cold calling fails to find the pre-qualified, quality leads we all want
Have you ever noticed how the conversion and closing rate for leads generated as a result of cold calling is always, without exception, drastically lower than the closing rate for leads from every other source? Call-ins, company-generated leads, responses from mailers, referrals, introductions via networking, etc. etc., ALWAYS prove to be far more valuable than leads found via cold calling. Here are some reasons why this is so:
- A large percentage of qualified buyers don't take cold calls and don't meet with salespeople unless they requested the meeting themselves. Who does this leave for the cold-call generated appointments? That's right - the time wasters who stroke you and tell you how great everything sounds, then never make a decision, never buy, or worst case, promise you the world then never return another phone call.
- When you uncover a prospect who is in a buying cycle for your product via cold calling, chances are they already have three or four competitive quotes and you're way too late in the game. To make matters worse, remember the concept of how cold calling destroys your status as a business equal? Chances are, the prospect called your competitors for quotes, not the other way around, and you're seen as the desperate one who needs the business to survive.
I'd like to touch on something that I've learned recently, and that I think is extremely important to understand in order to fully accept the fact that cold calling fails to find the really great, qualified, ready-to-buy prospects that most of us would kill for, and why it usually results in lots of flaky prospects who tell us everything we want to hear but don't buy anything in the end.
This realization came to me while I was reading an article about social dynamics, written by someone who has studied human social interaction for years. The writer was trying to explain why those who appear very cold and unapproachable in social settings do so. He explained that the standoffish personality was nothing more than a social "mask" put forth by the person for protection. Protection against what? Protection against being seduced, falling in love, etc. The writer went on to explain that those who put on a cold, unapproachable social mask are really afraid of the fact that they are extremely vulnerable to getting too close to others too fast.
The kicker came when the writer used an analogy to help explain his point. He made the following statement which was a real eye-opener for me:
"Most experienced salespeople have learned that those prospects who won't take cold calls and have giant NO SOLICITING signs plastered all over their doors are usually the easiest to sell to once you get in front of them. The reason for this is because they are actually afraid of salespeople. They know that their ability to resist a sales pitch is very low, and as a result, they usually buy whenever they're confronted with salespeople. On the other hand, those who willingly take cold calls on a regular basis can do so because they have a very high level of resistance to sales pitches. They know very well they're not going to buy, and so they have no fear of salespeople."
Did you get the message there? If not, read it again! This is EXACTLY why cold calling does a terrible job of getting us in front of those prime, willing, ready-to-buy prospects. They're terrified of us, and as a result they won't take our cold calls!
As time goes on I get more and more letters and emails from salespeople asking for help with flaky prospects. What I keep hearing is that prospects are getting flakier as time goes on. It's because most salespeople cold call, and those are the prospects you'll get as a result of cold calling. They're notorious for readily accepting an appointment, telling you, "Wow, that sounds great," then never returning another phone call or email again. It's because they never had any real need or intent to buy. The only way to get to those prime prospects who are easily sold is to avoid cold calling and to use other, more creative ways to get your message across to them.
Cold calling automatically puts you in a negative light
If there's one thing that infuriates a busy, successful person, it's wasting or otherwise being disrespectful of that person's time. Guess what? There's no better way of doing this than a cold call.
Imagine you're a busy executive with a to-do list a mile long and four meetings that day. As you're juggling tasks and trying to imagine how you'll ever get out of there before 8pm, you pick up your phone to hear this: "Hi, this is Frank Rumbauskas with FJR Advisors, and I'd like to get together with you. How about Wednesday morning or Thursday afternoon? Which would be the better time for you?" Or let's say you're a consumer who just got home from a long day at work and you're sitting down to eat dinner. The phone rings, you answer it, and hear this: "Hi, this is Frank, how are you doing this evening? Is this a good time to talk for a few minutes? If not, I'll call back. What I'd really like to do is set a time we could get together and chat about your selling and what we can do to help."
Obviously, that's extremely annoying and disrespectful, and that's exactly what cold calling will accomplish better than all other methods combined. Why get on the bad side of someone who otherwise might have actually bought from you?
Salespeople detest cold calling!
Personally, I think this is the most significant reason why cold calling doesn't work. It's a known fact of human psychology that almost no one can have any hope of succeeding at a job they hate. Why, then, would you choose to doom yourself to failure by doing something you hate? Even the most goofy, rah-rah, new-age sales trainers and managers will readily admit that all salespeople hate calling and anyone who claims otherwise is probably lying.
Buying vs. Selling: Why they aren't the same "Buy: To acquire in exchange for money or its equivalent; purchase. Sell: To exchange or deliver for money or its equivalent." - The Dictionary
Now that the dictionary definitions of the words "buy" and "sell" have been shown to you, let me share with you MY definitions of buying and selling:
Buying: The act of willingly acquiring for money something that you want or need. The buyer generally leaves the transaction feeling happy and satisfied. Selling: Attempting to convince another that they want or need your product or service despite the fact that they may not. The purchaser typically leaves the transaction with a strong feeling of "buyer's remorse."
Can you see where I'm going with this? Let's take it a step further. In my experience, I've come to the conclusion that cold calling definitely equates to my definition of selling. On the other hand, using leveraged systems to attract qualified prospects to you causes my definition of buying to take place. Can you see why buying and selling can never possibly take place in the same transaction and are in fact opposites of each other? Do you also understand the meaning of the words "causes to take place?" It means that the proper circumstances were presented to the buyer, which induced the buyer to buy from you. That concept flies directly in the face of selling as I define it and its synonym cold calling.
Salespeople habitually do things that immediately and unequivocally hand ALL of their power over to prospects and customers, who then hold all the cards and have the sole ability to cause the salesperson to either fail or succeed. Talk about power. The ability to cause someone to succeed or to fail. Think about that for a moment. It's like playing god with someone. That's exactly what it felt like in my early days of selling when prospects wouldn't buy and I had no power to do anything about it, despite the fact that the consequence was being fired from my job. The worst part about this is the fact that salespeople think they're doing the right thing and that they're SUPPOSED to take these actions that give all their power away. So many times I've heard salespeople say things like: "I'm willing to do whatever it takes to earn your business." "If you become my customer, I'll be at your beck and call." "I'm all about service after the sale. I'll be available to you anytime after installation if you need help." "I'll even give you my home number. I want to be available to you anytime for any reason at all."
The salespeople who say these things get themselves into all kinds of bad situations. For starters, entirely too many customers are out to get whatever they can for free and will start acting amazingly sadistic toward salespeople who really are at their beck and call and are willing to do anything at the drop of a hat for the remote possibility that they might get a sale. In order to gain the respect of anyone, regardless of whether it's in sales situations, personal relationships, etc., you MUST NOT give your power away like that! You must KEEP your power and communicate, very clearly, that YOU are the person who's respect and admiration must be earned. You must present yourself as an equal at the very minimum, and preferably as a superior. Then, and only then, will you receive the level of respect from customers necessary to make them fall into a frame of mind that THEY must prove themselves to YOU and EARN a place as your customer.
It's a game of wits and a game of psychological positioning. As for presenting yourself as a superior, well, if you can do that then the game is over before it even begins.
How many times have you heard those dreaded words, "You need to increase your activity?" Or perhaps, "The activity isn't there." The universal solution to lagging sales seems to be "more activity." More, more, more. IMPORTANT NOTE: The definition of insanity is trying the same thing over and over again with the same end results. Here's a novel concept: If your activity isn't getting you the results you want, why do more of the same activity? Why not change your activity?
The bottom line is if what you're doing isn't working for you, don't do more of it. Change it. Do something different. Remember, most of the world's successful people got there by working smarter than the rest, not necessarily harder.
The point here is that you must not waste your valuable, productive selling time on anyone who isn't likely to buy. Remember my definitions of buying and selling? If someone is going to buy, they're going to buy. That's that. If you're trying to sell, you're already facing an uphill battle. Isn't it better to take the time you're spending on selling, as I define it, and instead devote that time to the people who want to buy?
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