A lot of people want to get to the bottom of cold calling vs. warm calling. How are they similar, where do they differ, and what does this mean for you or your sales team? We’ll get to all that in this guide.
But first, here’s a fun sales fact: Cold calling is SO effective that it was around five years before the telephone was invented. It’s true.
How is that even possible, you ask? I won’t bore you with patent rights and early prototype telephones and all. Just know that the first cold call happened in 1873, and the telephone wasn’t even invented until 1876.
And before that…
Well, imagine schlepping your briefcase from town to town, physically knocking on doors, pitching your product, and getting rejected over and over in the heat of summer… with no A/C in your buggy, uphill both ways. That was sales in the 1800’s.
Thankfully it’s not the 1800’s anymore, and thankfully we now have telephones, smartphones, auto-dialers, sales tracking software, and good ol’ air conditioning.
But back to cold calling.
If cold calling was so effective, and is still effective today in the 2020’s, then how much more effective is warm calling and hot calling? And how can you leverage these outbound calls in your company?
The answers might surprise you. But before we get into which is better and why, let’s run through some basic definitions of these different sales disciplines (this is sport, after all) so we have a good foundation to build from.
What is Cold Calling
Cold calling is when a salesperson picks up the phone and dials a number of someone who a) doesn’t know them, b) probably has never heard of their company, and c) isn’t expecting their call.
Now I should preface this by saying that 95% of sales teams get cold calling completely wrong. So it only makes sense that out of 100 dials, the salesperson will only have 10-20 conversations, book two meetings, and turn one of those into a deal if they’re lucky.
But even so, cold calling still works, 150 years later. Especially if you’re cold calling the right way. The biggest advantages of cold calling include:
- It’s affordable
- It’s easy to scale
- No barriers to entry
- Quick to test and pivot
The disadvantages of cold calling include:
- It can be demoralizing when done incorrectly
- Conversion rates can be low
- Can have “scorched earth” effect on smaller industries
What is Warm Calling
Warm calling is when a salesperson picks up the phone and calls on a prospect who has previously expressed interest in their product or service. This expressed interest can come in many different forms, like:
Personal LinkedIn connections – When someone connects with you on LinkedIn, they will look at your profile and have an idea of what you do for a living. If they fit your target prospect demographic, they are fair game to warm call.
Newsletter subscribers to your company – When someone subscribes to your company newsletter, it means they have interest in the solution(s) you offer. These people are also fair game for a warm call. It won’t be jarring to hear from you. And in fact, you’re probably striking when the iron is hot.
Thoughtful social media comments – Some sales leaders would put this in the cold call bucket, but I consider it a bonafide warm call. If a prospect engages with you on social media, you should absolutely get in touch with them on a more personal level (phone call preferably, or at least DM).
Opened emails – If you’re running an outbound cold email campaign, and a prospect opens your email, they are 100% a warm dial. They have already been introduced to you, your company, and your offering via email. And just like that, they have become a warm prospect. How do you know if they’ve opened your email? It’s easy to tell with Mailshake, Yesware, and other cold email tracking software.
For warm calling, there needs to be a baseline level of trust established. These are often your marketing qualified leads (MQLs), who are ready and willing to go further down your funnel. Also, you and your sales team need to adopt the right mindset before calling these leads. Understand that you are not bothering warm leads when you call them; rather, they are probably excited to hear from you. That’s the mindset to have.
The advantages of warm calling include:
- You can customize your call better
- More likely to book a sales appointment
- Easier on the psyche knowing they’re interested
- Timely, reaches prospect when your offer is top-of-mind
The disadvantages of warm calling include:
- Limited in number / smaller lists (compared to cold calling)
- Some prospects could see a phone call as too forward/pushy
- Immediate contact is imperative
The Main Difference Between Cold Calling and Warm Calling
The biggest difference between cold calling vs. warm calling is the level of awareness and interest your prospect has for you, your company, and your offer. The more awareness they have, the better. The more interest they have, the more likely you are to get ink on paper.
Of course, there’s a sliding scale to all this, and the lines aren’t always easy to draw. That’s why you have to use your best judgment here. But remember, the more engaged your prospect is with your company, the easier it’ll be to get an appointment on the calendar. Which brings me to my next and final point … HOT calling!
Hot Calling for the Win!
Ok – now you know what cold calling and warm calling are, and where they are similar and different. So I’d like to introduce you to hot calling. Yes, HOT calling. Scorching hot calling.
It’s hot because your prospect is burning for your product or service. Alright, that may be an exaggeration, but these leads are primed to slide right down to the bottom of the funnel and become your buyers. Hot calls come in the following forms:
Decision makers who request information – Anytime someone requests information about your product or service, you should immediately send the information. And while the stamp is still wet, you will call them on the phone personally. These buyers are ready as can be.
Referrals – This is when one of your existing customers refers you to a decision maker who will benefit from your service. Referrals are one of the best in-roads to done deals. This is a hot call, as the conversion rate on referrals can be upwards of 60%!
Personal meeting – Think face-to-face communication, like you’d have at a conference or mixxer. If there’s the slightest bit of expressed interest, these people are hot leads. They have already spoken to you and gotten to know you, and presumably your product. Trust is the deciding factor here. If there’s mutual trust, you will hit it out of the park.
Social Media DM – If a prospect direct messages (DMs) you, chat back right away and pick up the phone to dial them. These are hot calls, not only for the expressed interest, but also because they are timely. The prospect is on the market for your service at that very moment. So get in touch same day, or same hour if you can! Wait too long and the hot prospect turns ice cold.
Cold calling was a brilliant development in sales over 100 years ago. And it’s still effective today. That said, it’s not as effective as warm calling or hot calling. But thankfully, you can turn just about any cold prospect into a warm prospect if you do some research, learn about their role in the company, try to qualify them before getting on the phone, and leverage smart sales strategies and tactics.
Another thing you can do is throw that yawn-inducing cold call script in the trash. You need to engage your prospects with high emotion, creative tonality, and draw them into your orbit. Another thing that is hugely important, especially when it comes to warm and hot calling, is timing the call. If you snooze, you lose. The early bird gets the worm. You know those sayings. But those axioms are true in sales and in all of business.
So there you have it, the differences between cold calling vs. warm calling, with a little hot calling thrown into the mix. Now take this knowledge and be empowered to sign more deals and crush your sales numbers.
Until next time…