The most gobsmacking aspect of “The Big Short”, Michael Lewis’ brilliant book and the resulting (and highly recommended) movie detailing the 2007-2008 collapse of the world financial markets, is how many supposedly brilliant people were totally blindsided.
Literally hundreds of billions of dollars were traded, and lost, because the “experts” didn’t understand the complexity and risks of the various financial instruments they were trading – and only a tiny handful of people bothered to go and look at the source data.
Almost a trillion dollars just disappeared, huge Wall Street firms went broke or had to be bailed out, more than a million people in the USA lost their homes, world unemployment rocketed, economic activity ground to a halt. Taxpayers around the globe were slugged to pay for the criminal stupidity of a self-obsessed financial industry that took statistics on trust and ignored the facts – and we’re still feeling the effects.
A similar situation is building within B2B sales and although the consequences won’t be nearly as catastrophic the causes are the same – accepting spurious statistics without question, treating them as facts and drawing misleading conclusions from them.
The ether is awash with “experts” loudly proclaiming statistics purporting to show cold calling is dead, outbound marketing is for losers and the way to sales and marketing success entirely lies with marketing automation, social selling, content and inbound sales.
Strangely enough, just like the banks, hedge funds and traders loudly defended the strength of the economy, the housing market and the Collateralised Debt Obligations (CDOs) through naked self-interest, many of the people who are quoting these statistics are vendors of marketing automation, social selling, content marketing and digital services.
I’m not for a moment saying that those things (marketing automation, social selling, etc.) aren’t valuable additions to our sales and marketing kitbag.
But anyone postulating that all a company has to do is get their online marketing engine firing and then sit back and wait for the leads is as mistaken as Ben Bernanke was when he said in March 2007 “The impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”
Here are just two examples of spurious statistics;
1. 90% of decision makers won’t respond to cold calls – Harvard Business Review
Well, if a Harvard Business Review survey says it, then it must be true mustn’t it? And if that statistic is accurate then cold calling must be dead, surely.
So have a look at the source of the statistic.
In reality this is a false conclusion being drawn from an incorrect statistic – or to be more exact a non-existent statistic. Because the Harvard Business Review never did such a survey.
They do, however mention – in an article in July 2012 titled “Tweet Me, Friend Me, Make me Buy” that 90% of “C” level executives said they never respond to cold calls or email blasts based on a “recent survey by InsideView”.
But InsideView is still a reputable organisation and many people quote them as the source so that makes no difference – does it?
In fact, this “statistic” comes from an article dated March 18th 2011 titled – “The End of Cold Calling – Ending the Debate”.
In the article, it states; ““There’s the old adage that 90 percent of people hate cold-calling and the other 10 percent are lying,” says Brian Carroll, CEO of InTouch Inc., and author of the book, Lead Generation for the Complex Sale.”
That’s the source of this “statistic”.
So instead of it being based on a HBR survey of “decision makers” or “C level executives”, it’s;
- based on an old, unsubstantiated adage from a guy who wrote a book about lead generation
- a throw away quote from a much longer article
- it’s about “people”, not “C” level executives or “decision makers”
- it missed out the second part of the quote from the same guy, Brian Carroll, who goes on to say; “However, even in today’s business world, picking up the phone remains one of the best ways to reach an organization’s senior executives. A 2007 survey by MarketingSherpa, a research firm that tracks what works in the marketing profession, found that only 11 to 17 percent of business prospects were annoyed by getting an unsolicited cold call. On the other hand, 45 to 53 percent of the executives interviewed said that a cold call they received had helped vendors leapfrog onto the consideration shortlist for purchases. – INC.com”
So not only is the source of the statistic three degrees removed from the organisation (HBR) that many attribute it to, not only is it based on an adage, not a survey, not only do “people” become “decision makers” and then “C” level executives – but the actual quote goes on to directly contradict is. Talk about selective reading!
The bottom line
Not only is this entire statistic patently wrong, it leads (not surprisingly) to a false conclusion – that cold calling is dead. (And that doesn’t even take into consideration what you mean by “cold calling” and by “decision makers”).
If cold calling means picking the phone up and calling people at random with a sales script and a fast talking shyster on the line – like Jason Belforth’s boiler room callers in “The Wolf of Wall Street” – then it should have been dead, buried and had a steak slammed through its heart decades ago. Sadly that’s not the case – there are still lots of boiler rooms working away.
But if “cold calling” means targeting a senior executive where you know they have a business problem you can solve, where you’ve done your research, where you are looking to open a conversation about how you can help them solve a pressing business issue and where you have a methodology to get the right message to the right person then it’s very much alive – and kicking butt.
2. Buyers complete 67% of their decision making before they contact a sales rep – Sirius Decisions
This one has been so misquoted, misconstrued and has led to so many articles and blogs proclaiming the death of cold calling and the supremacy of inside sales that I hardly know where to begin.
Luckily I don’t need to, because Megan Heuer, VP & Group Director, Data Driven Marketing at Sirius Decisions has done it for me very nicely in this article titled “Three Myths of the “67 Percent” Statistic”
Myth 1; Sales doesn’t get involved until more than halfway through the buying cycle. The 67 percent statistic in no way says that no one talks to a salesperson before getting halfway through the buying cycle, but this is how some have interpreted it.
Myth 2: It’s best to let buyers find you when they’re ready. Just because buyers look for information online when they’re ready to act doesn’t mean you have to wait for them.
Myth 3: Your current inbound marketing strategy doesn’t need updating.
Thank you Megan Heuer, you’ve saved me the bother of looking for the source of this statistic and pointing out that not all buyers are the same and they don’t all follow the same journey.
A steel mill buying iron ore, a manufacturer buying steel, an assembler buying components, a farmer buying seed, a CIO buying IT infrastructure, a business unit manager buying software and a procurement person buying stationery all follow very different processes.
That’s the problem with statistics – they are generalisations that never actually apply to one specific situation. Very few people earn the average wage and, reducing it to the absurd, hardly anyone has exactly one testicle and one ovary even though statistically speaking more or less everyone does.
The bottom line
Even if this statistic applied to every single one of your prospects – and it obviously doesn’t– the conclusion shouldn’t be to focus only on digital marketing and developing content and give up on approaching prospects.
The conclusion should be get to them proactively as early in the process as possible so you can help them on their journey, so you can provide advice and guidance, so they go on the journey you want them to rather than one that leads them away from your door.
It’s an argument for effective outbound sales and marketing, not against it.
Digital marketing, social selling, content marketing and so on are invaluable tools for building credibility, developing relationships and yes, generating leads. But they are only one part of the picture.
Without proactive prospecting and finding a way to get to decision makers and “C” level executives early you’ll never know how many potential customers didn’t call you. (And the ones that do call you will probably have developed misconceptions about you).
They say ignorance is bliss – tell that to the people who lost their houses, their jobs, their investments and sometimes their lives because of the events depicted in “The Big Short”. And if you haven’t done so, read the book and see the movie – it’s an eye-opener.
This article was originally published on LinkedIn here The Big (Sales) Short published on LinkedIn
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Steve Hall is an executive coach and a sales coach. He helps his senior executive clients to be more productive, more focused and to have more time for the things that really matter.
And he helps sales executives to sell more and to build relationships at a higher level.
He is a member of Sales Masterminds Australasia and this article is taken from the recent eBook published by the SMA. If you’d like a copy drop him a line.
He can be contacted on LinkedIn at https://au.linkedin.com/in/stevehallsydney onTwitter at @stevehallsydney,or by phone on 0410 481 960. He’s based in Sydney, Australia.