Let’s start with some honesty – I have not made a cold call in years. God, that feels good to say!
Do you find yourself still making cold calls? Do you enjoy it? If you do… you are in the minority. The rest of us would rather have our chests waxed at the local beauty college than make another cold call. So, why is it that most bankers, especially younger bankers, are still being told to go make them?
Let’s just be real for a moment.
Cold calling sucks.
So, stop doing it – now!
Depending on which source you read, cold calling’s success rate for getting an initial appointment is somewhere between 1% and 3%. Let’s assume a 2% success rate. With a 2% success rate, you have to make 50 calls just to get an initial appointment. If your close-rate is 25%, that means you have to make 200 cold calls just to generate ONE sale!
Chamber coffees also suck.
My apologies to all local chambers of commerce. However, this is what a chamber of commerce coffee looks like – 15 bankers, 10 realtors, 8 insurance agents, 3 people from the City, 1 local economic development director, and 2 new business owners with their backs against the wall, terrified as they enjoy their day-old donut… and cup of coffee brewed from dirt. If a successful business owner is actually there, they’re either giving a presentation, receiving an award, or they’re on the chamber “welcome wagon.” Whatever the reason, they’re not there to meet people, and they’re certainly not interested in your “competitive rates, fast response time, and local decision-making.”
Get on the list or you’ll never make past the front door.
If you have never seen the movie A Night at the Roxbury, go watch it! In the movie, the two Butabi brothers try to get into the fabled Los Angeles nightclub, the Roxbury. They are continually denied entry by the nightclub bouncer. One night on their way to the club, they get into an accident with Richard Grieco. Without spoiling the movie for you, Grieco agrees to take the Butabi brothers to the club. As they approach the velvet ropes, both Grieco and the Butabi brothers stroll past the bouncer and enter the Roxbury together while the crowd behind the ropes watches in amazement.
That’s how you meet successful business owners! Find someone who has the power to get you past the bouncer at the door, or get in line with the rest of the plebs.
Bacon’s Law is a real thing.
Bacon’s Law. Six Degrees to Kevin Bacon. Whatever you call it, it’s a real thing! If you want to meet successful business owners, you need to develop a referral network that will help you make it past the front door.
Successful business owners are constantly talking with other successful people, learning what’s going on in their market, exchanging what they know – constantly gathering information. Additionally, successful people have a network of trusted advisors who they talk to about their challenges and “rocks” they need to overcome.
If you want in the “Roxbury,” you need to find their “Richard Grieco” to help you get in.
Referrals beat cold calls all day long.
Remember the 1% to 3% success rate of a cold call? Referrals will get you in the front door 40% to 75% of the time, again, depending on which source you trust. Let’s assume a 50% success rate from a referral and the same 25% close rate. That means you only need EIGHT referrals to make one sale!
So, where would you like to spend your time? Making 200 cold calls to generate one sale, or generating 8 referrals to make the same sale? As I stated, I haven’t made a cold call in years!
Final Thoughts
Referral networks are hard to establish. It takes a lot of time doing the right things and meeting the right people. It also requires you to conduct yourself like a successful businessperson and know who they know. But, put in the effort… and you will never make a cold call again.
