Referral vs Cold calling. Which one is better?

hi,vkram i am also agree with u.

I completely agree with Shailender.. Well the process has to start some where.. and more often than not it starts with cold calling a prospective client.

Its true that referrals always is the better of the two for it carries higher conversion probability. But to get the referrals, you need to get started with the clients first. And I guess, here only cold calling can come to help.

More over, an aggressive rate of increase of the customer base may not be supported by referrals alone.

The best option should be cold call <obviously not to anybody, but only potential customers> and then back it up with past performances.

p.s. - the connotation that the term "Cold Calling" carries may change from industry to industry.. 

e.g. for a consumer sales it can be sales boy making calls and giving demo..

for a high technology product its' more likely to be organising seminars and inviting prospective clients to start networking.

Please correct me if I am wrong.

After 2 decades in sales, I have seen that cold calling - as what is referred to here, is a mandatory step to sales. It is like establishing the first contact.

References help, but cannot be considered as an alternative or replacement to cold calling. If someone refers you to somebody, and you call him - it is a cold call for you. The reference is just a lead; you have not established trust in the reference - as as such it is still cold.

On the other hand, consider cold calling - getting names and numbers is not difficult! You  pick up your suspect and cold call - any method, phone or face 2 face - establishing trust and authority is foremost. You always use "reference" from your previous work, other customers - "I am from xyz, and we have helped customers similar to you increase their profits over 6 months by helping them reduce operation inefficiencies. ABC (your previous customer) realised a savings of 38% by using our processes.

Any cold call made using any type of reference would result in a far better yield on sales than not cold calling (and thus skipping an inportant sales step) and working only with references.

Guys, Cold Calling cannot be done away with. People who sell only with references, fail to realize that they are cold calling. The only difference is that they use a reference too early. Noone would buy if they do not have a need, even if you get a good reference to them. Use of references should be restricted to generation of the need/pain.

Now let us sell something!

As I said in my previous comment that cold calling is like going to gym, I also believe that cold calling is the start for creating your own data base. And from my experience when I used to do cold calling and ask for referral from the clients... Its cold calling which generated me more leads than referral.

Well, cold calling is basic of sales / marketing. We generate data base, feedback and relation / rapo building through cold calling, and once you do this and develop the rapo with the client you get referral, but again there are hurdles as how well your client is satisfied with you and your products / sevices. where as in cold calling whether you have a rapo or not you get to know the need and mood of the client then rest all depends how fast and how hard you push him, then rest every thing depends on you I mean the company to encash it by providing better services and convert it to referral.     

In my openion best sourse of lead generation is not the method (Cold Call, Telecall etc.-) But the message which gets communicated.

 I still support cold call just because wise salesmen will do it to proper place. Referal is given by customer may not be to right prospect(and cold call might open door to a future referal) .   But referal is a winner in a long run. Because world is very small if you have time.  E.g.- Maruti car is easy to maintain.

Bhuvaneshwar, agree with you. Sales can't rely on all customers and prospects being satisfied and refering to others. The reach will be very limited. Cold calling opens access to much larger prospect pool

Hi All,

 In my Idea cold calling is better than reference bcoz in my 4 years of career i look that we will get more leads than references. If we are getting 3 leads in a week by reference and if we are doing 10 cold calls pre day or 50 calls per week than we will get minimum 7 leads calls in a week. So we can the see ratio and can understand the deference.

Thanks & Regard's

 Narpal Singh

As a consumer of goods and services, I find cold-calling has a greater chance of acceptance with me. With referrals, there is always the likelihood of the referrer pushing thier own agenda, and I always need to give the politically right questions and answers. With cold calls, I have seen the freedom to ask the tough questions, and get the right answers.

Cold Calling might be intrusion, but it works well when you know how to hold a conversation. This is a sure way to reach whom you want rather who you are referred to. Hitting on Key Decisio Makers pretty early on makes all the difference. You can choose your targets.

Dear Bhanwar, no point in posting what you got from net. Please post from your experiences and people will appreciate you for that. I know in cold calling there is lot of rejection because each interaction is like a chess move where one needs to maneuver their moves to crack it. I feel the way cold calling is done decides the actual winner as most often people do mistakes in terms of putting up a right framework in their very first step. The most common way to screw up a cold call is to not know anything about your prospect's business. I think the key is to understand 'who' you are targeting, why you are targeting 'them' in particular and being clear concise and brief in the purpose of your call. After that take things in step by step manner and try to get close to the deal. For many businesses, cold calling is unavoidable so we should focus more on how to get it better.

" Patience is virtue my friend "

Dear Bhanwar and others, You ppl have make some great points, but I think you need to specify your claims further. Cold calling still works if you are calling qualified prospects, you need to do research about your prospects first, and the internet provides that: Google, websites, and even this TooStep platform.

I beleive sales is all about cold calling.

Cheers

Anshuman 

Dear Mr. Singh,

be frank and tel us how many references you have and how many projects you got through the referance. for even getting the reference you shold get in touch with some one. so i beleive 70% cold calling and 30% reference will make som sence. If you want to purely depend on reference i'm not sure about you, but it never worked for me.