David Cummings on Startups

How Much Does a Single Cold Call Cost?

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David Cummings

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Cold calling is one those things that many people think is dead but is actually thriving in the B2B world. Now, there’s an entire industry built up about the Sales Development Rep and the Predictable Revenue methodology. One popular question that comes up is “how much does a cold call cost?”

Let’s take a look:

  • Assume a full-time cold caller makes $36,000 per year ($3k/month) then add 20% for taxes and benefits for a fully burdened total of $43,200 per year
  • 40 hours of work per week and 50 weeks of work per year equals 2,000 hours per year
  • For a pure cold calling position that doesn’t include sending emails, doing demos, etc., assume 100 calls per day or 12.5 calls per hour (this is on the high side of things)
  • $43,200 spread out over 2,000 hours is $21.60 per hour divided by 12.5 calls is $1.72 per call

Cold calling, at $1.72 per call, isn’t cheap but in certain industries, is very effective, especially for the appointment setting team. Here are 7 Ideas for More Effective Cold Calling, Cold Call Ratios, and Ideas to Test if Cold Calling Makes Sense.

What else? What are some more thoughts on the cost and value of cold calling?

Comments

4 responses to “How Much Does a Single Cold Call Cost?”

  1. Dave Williams Avatar
    Dave Williams

    I shut down our cold calling team at 360i as it was killing our brand. I think it is good for volume sales but tragic for up channel selling.

    Reply
  2. JonnyBird Avatar
    JonnyBird

    Just go to the metrics tab in Rivalry and run a cross object comparison, waterfall metric report for that particular company, role, or rep, and you’ll know in no time.

    Reply
  3. Nathan Settembrini (@natebrini) Avatar
    Nathan Settembrini (@natebrini)

    Great thoughts, David. At Lendercast we’ve made thousands of cold calls this year and set hundreds of meetings for our clients. In our primary vertical of commercial lenders, we have found it takes us 50-100 calls to set one meeting.

    Assessing the value/ROI of cold calling is similar to other customer acquisition channels. Once you know your cost-per-call, the question is how many calls does it take to generate a sale?

    With so many conversion steps between dial and deal, incremental improvements at any point in the process can make a huge difference in overall effectiveness (similar to landing page optimization to improve cost per converted click). The cold call conversion funnel goes something like this:

    – Get decision maker on the phone (10%)
    – Appointment set (20%)
    – Appointment held (60%) — live transfers can help big time!
    – Accepted lead / Positive next steps
    – Closed sale

    Implementing pre-call research can help make each call more effective, but reduces total calls. Investing in a dialer and other sales tech can enable the reps to do minimal research and still make 100 calls per day. No research, and a motivated cold caller can make 200+ calls per day! We try to focus our reps on results, not call activity, which helps them balance pre-call research with blind “dialing for dollars.” 🙂

    Reply
  4. smillerrampedup Avatar
    smillerrampedup

    I wonder if it would fly if you told BDR’s that they would not get a base salary but would get $1.75 every time they picked up the phone.

    Reply

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