I just finished reading No More Cold Calling(TM): The Breakthrough System That Will Leave Your Competition in the Dust by Joanne Black. In the book, the author discusses how salespeople can ditch cold calling and turn their sales pipeline into one that is almost entirely or perhaps entirely made up of referrals. This would certainly come as welcome news to anyone who has ever picked up the phone to make a cold call or who colds calls on a regular basis.

Certainly cold calling can be one of the hardest sales skills to perfect. For starters, many people are simply scared of picking up the phone and calling someone cold. The thought of speaking with someone who doesn’t know you and isn’t expecting your call isn’t the most pleasant thing in the world to do. From a numbers perspective it tends not to be the most productive or high yield way to pick up customers. The author suggests that cold calling often yields around a 2% conversion rate. I’ve read stats that suggest that direct mail is around 0.5% by comparison. The author suggests that referrals on the other hand can often yield up to a 50% conversion rate.

The book walks you through a strategy to start immediately whereby you begin to change the way you work as a salesperson and only start working with prospects, people who have been referred to you. The author discusses how to set up a referral system by tapping into former and current contacts and also by buddying up with another salesperson perhaps in a different field to share referrals, share ideas and provide motivation for each other.

She also gets you in the mode of offering up referrals too. Throughout the book she mentions various companies she has dealt with successfully including an insurance company and a stationary company and she gives you their URL so that you can contact them if you need their help. In other words, she doesn’t just ask for referrals, she gives them too.

I can certainly see how this strategy might work for many sorts of salespeople such as real estate agents and financial planners for example. These people can presumably deal with anyone they like and aren’t necessarily constrained by sales territories, protected accounts and things of that nature.

In that regard, this is one area where I think a salesperson might have difficulty employing this strategy. If you work in a sales environment that operates with a strict territory system or where you are handed leads and aren’t allowed to contact leads that are “owned” by one of your colleagues, I suspect this referral strategy could be a hard one to enact. If you work in a wide open sales environment and can contact anyone you choose, then the system could certainly help you immensely.

The book does provide some good ammunition at a minimum of why asking for referrals consistently should help to build your business and make you less likely to have to rely on cold calling – if at all – for new and repeat business.

Upon finishing the book I did think of all the major items I’ve purchased or arranged through someone in the last few years – life insurance, mortgage, financial investments to name a few – and I can’t think of one occasion where the person called me up at any time asking for referrals. I plan on doing a better job of asking for referrals in my own life, and offering up referrals when appropriate too.

Actually I used the Internet and the phone and I also used a bit of networking but all told, that’s essentially how I became a recruiter.

The good news is that you can also use the same tactics I did to find a job too and the better part is that most other people you’re probably competing with for various jobs won’t do the same thing.

I’d been laid off from a sales job in early 2000 when the company I was working for had gone out of business. I’d already been thinking about looking for a new job just before the company closed so I was already in the job search mode to a certain extent.

I’d already thought about becoming a recruiter so my first thought was to do a bit of research and figure out exactly what recruiters do. I did some online searches – this was 2000 so the the Internet was good but not as good as it is today – and I did get some good information.

My next step was to find some actual recruiters to speak with. I did some checking in the Yellow Pages and located a few local IT recruiters (IT interested me the most so I targeted IT recruitment firms), cold called the the companies, asked to speak with the person who hired their staff and essentially told them I was looking for a job and asked if I could speak with them in this regard.

I was able to speak for a few minutes with each company’s hiring manager, got to answer their questions, tell them a bit about myself and then got invited into their respective office to meet them in person.

I ended up interviewing with 4 different companies and got offers from 2 of them.

Now in the recruitment business like some other sales jobs, it’s certainly easier to cold call a company and essentially invite yourself in for an interview. Companies like this often look for new staff regularly so it isn’t uncommon. Still, not everyone picks up the phone and makes that call so if you haven’t done it, you might try it.

If you’d like to read about how I cold-called my way to another job later in my career, check out this post from a few months ago.