SMU Data and Models

The Truth About Selling Steel: Cold Calling

Written by John Packard

There are a number of ways to connect with new potential customers (prospects). The most effective is when customers come to you either through a marketing effort you and your company or, better yet came from a recommendation from one of your customers. Another way you can also reach new potential customers is by conducting a prospecting or “cold call,” reaching out directly to a company believed to use your products and seeking the proper contact in order to hawk your wares.

Today we want to discuss the cold call process and provide some ideas as to what is the most effective way to conduct a cold call.

It has been a time honored tradition within the steel industry that salespeople, especially new salespeople, research their territories and conduct searches to identify new potential customers. Many times these searches begin by taking a known existing customer and expanding the search to include others within that industry.

Why does this happen this way? Because the existing customer and the industry they are in represents a known success story for your company. You know the industry utilizes your product or services (or has the ability to utilize your product or services) and you want to be able to leverage what your company has learned from the existing customer, using that knowledge to attract similar companies and then repeat the process over and over again.

A good simple example is the HVAC industry where there are mechanical contractors who manufacture galvanized duct work which is used in residential and commercial buildings. Large contractors use 60” wide galvanized coils in their duct machines. So, the steel distributors who service at least one of these companies have a base of knowledge about the industry, what it needs and how to service it, which can then be repeated with other mechanical contractors.

There are two keys to cold calling that I would like to share with those of you who are new to sales. The first is how to deal with your fear of the unknown. The second is about what you need to accomplish in order to have a successful cold call.

Overcoming Your Fears

It is normal to feel a sense of dread when you first begin the process of contacting someone you do not know and soliciting them for business. You think about the countless calls you receive on your home phone from unwanted companies wanting to sell you stocks, insurance, donations, etc. You may reflect on how those unwanted calls were treated by you or someone else at your residence. Now it is your turn to contact someone at a business and you cannot help but think about those calls coming into your home.

Purchasing agents get calls all day long from existing suppliers, operations and all kinds of companies looking to become a new supplier. Most buyers do not remember the first time they spoke to a salesperson making a cold call. Especially if they do not have a specific plan of attack as to how they are going to generate interest in themselves and their company.

So, if you are new and worried about fumbling the first few cold calls and making a fool of yourself, don’t worry.  More than likely your first contact will be forgotten and life will go on as you know it.

That doesn’t mean you should begin making cold calls without having the basic knowledge needed. You need to understand the product you are selling, the value your company brings to the industry and the basics about the industry (including who the competition is and what they are good at doing and their potential weaknesses).

The Successful Cold Call

So, what calls do purchasing people tend to remember? To answer that question you need to understand what makes a typical purchasing manager tick?

You need to remember when making a cold call that the individual on the other end has a business responsibility to purchase products and services which will help his/her company to grow and be profitable. The individual also is looking for ways to make his job easier and more productive so that he can be rewarded with internal recognition, more money or more free time.

When you make a cold call you will be more successful if you address one of those needs/desires.

If you begin by asking what steel do they use, or, can I please have a shot at your business because you have good prices, you may be brushed off very quickly. The last thing a PA wants to hear from is another unknown company trying to sell him something where he/she already has a steady supplier.  

So, what should you do in order to increase your odds of success?

Leverage what you and your company already know about the industry and present a case study that addresses how your company can assist the PA in performing his/her daily tasks. Purchasing agents want to speak with people and companies who have a value proposal for them to consider. You want the call to contain a value proposal which will allow for a follow up call, or even perhaps a personal contact, in order to move the proposal forward.

This value proposal is done by taking what your company has learned about the industry and then using the knowledge to receive maximum attention. Part of that process of maximization is to speak to your existing customers who can best explain why they are doing business with your company. By asking the right questions of your existing customers, and being aware of what motivates the typical steel buyer, you can then expand your value proposal to include a case study.

Next time we will discuss voice mail and how a salesperson should handle getting voice mail on the initial cold call.

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