In geometry, the shortest distance between two points is a straight line. But what’s the shortest distance between a salesperson and a new customer? According to a recent survey of sales professionals, it is not cold calling.
The survey, conducted jointly by the New York-based Nierenberg Group and NYU’s Management Institute, asked salespeople to rate the best methods for finding new customers on a scale of one to five, with five being the best.
For anyone familiar with the sales process, the results were less than surprising. Topping the list with an average rating of 4.8 was referrals, followed by one-to-one marketing at 4.5, direct mail at 3.8, trade shows at 3.2 and cold calling well down the scale at 1.5.
Participants also rated business-related functions as the best locales for drumming up new business, followed closely by social events at trade shows and civic or public service events. Andrea Nierenberg, the consultant who coordinated the survey, defines a business-related function as any gathering or event where members of a salesperson’s target market are likely to be. She describes social events at trade shows as the breakfasts, luncheons or other informal get-togethers where opportunities for interactions with prospective customers are frequent. Civic or public service events are the type typically sponsored by a chamber of commerce or such community organizations as Rotary or Kiwanis.
Based on these results, Nierenberg believes that salespeople eager to develop new business relationships should immerse themselves in those venues where target customers are likely to congregate. She also suggests that companies use compensation plans and rewards to spur salespeople to chase referral business. “Your best clients can be advocates since they already know your work,” she says. “They’re like a partner already. Companies should encourage salespeople to find out from clients who else they might know. In many cases they’re friends with other suppliers who aren’t their direct competitors. This is much better than a cold call – it really works.”