If your sales funnel is primarily made up of warm leads and referrals, then selling to cold prospects will represent a new challenge. However, there are advantages to focusing on cold leads. For one thing, it greatly increases your pool of potential customers. You and your sales team just have to understand that the process will take more time and resources. Let’s explore what makes cold leads different and how you can get the best results selling to them.
The Difference Between Cold and Warm Leads
When prospecting, it’s important to understand the kind of prospects you’re dealing with. There aren’t simply warm and cold leads, but a spectrum on which you can place prospects. To simplify, we can break them down into three main categories.
- Cold leads. These are people who’ve had no contact with you before. These are the most challenging leads to foster as you’re starting from scratch.
- Warm leads. These prospects have shown some interest in you or your products. They may have signed up for your email list, followed you on social media, called you for a consultation, or taken some other action that indicates interest.
- Hot leads. While warm leads have shown some indication of interest, hot leads have an immediate need and are well-qualified for your product or service.
There are various ways to break down warm and hot leads. For now, however, we’re mainly concerned with cold leads and how to convert them into opportunities.
How to Sell to a Cold Lead
A cold lead is a special type of challenge. Here are some guidelines to keep in mind.
There are a variety of methods that can be used to connect with either cold or warm leads. These include:
- Email marketing. Email remains one of the best ways to connect with prospects. Cold leads can be warmed up by drip campaigns, an informative newsletter, and links to other content.
- Paid advertising. You can use pay-per-click and other types of advertising to reach prospects. This often works well when combined with email marketing, as people who respond to ads are more likely to seek further information rather than become customers right away.
- LinkedIn. Connecting with targeted prospects on LinkedIn gives you the ability to send them messages, known as InMails. A Sales Navigator account on LinkedIn gives you the most credits for sending InMails.
- Cold calling. Despite the myth that cold calling is dead, it’s still widely practice and can be very effective when done properly.
There are fairly strict rules about cold calling and other types of cold prospecting. As laws change and vary based on your location, you need to keep track of applicable restrictions. For example, the Can-Spam Act and GDPR have increased regulations on email marketing. Breaking the rules can result in huge fines and repercussions; stay informed to stay compliant.
Reaching out to cold prospects expands your reach. You need several things to get started.
- A trained sales team. Sales reps need solid knowledge about what they’re selling and who they’re selling to in order to be effective.
- A strategic nurture campaign. Even the best sales reps seldom convert prospects on the first try.
- Qualified leads. Prospecting cold leads doesn’t mean you just call people at random. A qualified lead is someone who’s a good match for what you’re selling.
- Informative content that helps prospects move forward on their buying journey. This may include white papers, blog posts, guidebooks, videos, or other material.
- A script. With a cold call script, you can make sure sales reps are providing the right information and not say anything off-putting. Scripts can be flexible, based on responses. You should constantly test the elements of your scripts and make changes as appropriate.
How to Qualify Your Leads
As noted, it’s best to contact qualified leads if you want to improve your conversions. What qualifiers should you look for?
- You can actually help them. You want to call people who have a genuine need for what you’re selling. For example, if you’re selling homeowner’s insurance, you don’t want to waste your time calling renters. Some products and services, such as in hospitality, recreation, and entertainment industries may not fill literal needs, but they do provide benefits.
- They can afford your product or service. If you’re contacting people who aren’t in the right revenue bracket, they won’t be able to buy anything even if they’d like to.
- Authority to buy. When speaking with businesses, it’s important to talk to someone who has the authority to make a purchasing decision.
When you’ve set your targeting parameters, you can create lists of prospects who are a close match for your ideal buyers.
Cold Prospecting Tips
Assuming that you have trained sales reps and qualified leads, here are some ways to get the best possible results from cold prospecting.
Education is Primary
The main difference between cold and warm leads is knowledge. In the beginning stages of connecting with a prospect, education should be your primary goal. You can’t assume that the prospect knows anything about you, your business, or your products. Having informative content that propsects can review, including a professional website, white papers, videos, webinars, articles, etc., can be a huge advantage when building trust with new prospects.
Why Cold Leads Take Longer to Close
It generally takes longer to close a cold lead than a warm one. You need to introduce prospects to your offer, educate them, and answer their questions and objections. This can also be true for warm leads, but they will have at least some familiarity with your product or service. With a cold prospect, you need to plan for a longer process. You can look at the closing process in relation to the three main stages of the buyer’s journey:
- Awareness — When customers first realize that they need or desire something.
- Consideration —Alternative solutions are considered.
- Decision — A final decision is made and the customer buys a particular product or service.
With warmer leads, the customer is already further along this journey. You need to allow for more time to nurture cold leads. Of course, the amount of time it takes also depends on your sales cycle.
Selling to Cold Leads Helps Your Business Grow
Although it can be more challenging, it’s worthwhile to develop a strategy for selling to cold leads. You can expand your base of prospects, reaching people who you were previously overlooking. With the right nurture strategy, cold prospects are just warm leads waiting to convert. Take your time with cold leads and reap the rewards of a sustainable pipeline.
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