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In my previous article, Cold Calling in the Age of AI and Multichannel Selling, I defined cold calling as approaching a potential customer with whom the salesperson has had no previous contact.

I also argued that calling potential customers on the phone can still be an efficient part of the revenue-generation process. However, whether it works depends on the target audience, the value proposition, the preparation, the support given to salespeople, the design of the sales process, and the way the activity is managed.

This article examines a company that put those principles into practice.

I will call the company Tangeryne. It no longer exists as an independent business because it was acquired by a major player in its industry. One of the main reasons for Tangeryne’s success was a revenue-generation process built almost entirely around cold-calling prospects by phone.

The situation

Tangeryne offered an IT security service that filtered incoming email for spam and malware. The product was delivered as software-as-a-service and sold on a subscription basis.

Initially, Tangeryne targeted large companies. The logic was straightforward: large companies had many email users, so winning just one customer could generate substantial revenue.

The problem was the sales process.

Large companies recognised the need for better email security, but buying decisions were hampered by corporate bureaucracy, multiple stakeholders, and formal procurement procedures. Sales cycles became long and expensive. At the same time, large customers negotiated hard on price, which reduced Tangeryne’s gross margins.

The combination of high sales costs, long sales cycles and relatively low gross margins made the strategy unsustainable.

A call centre that was booking sales appointments for Tangeryne suggested a different approach: instead of pursuing large corporate accounts, why not sell directly by telephone to small and medium-sized businesses?

The idea rested on four assumptions:

1. IT managers in SMBs could be reached by telephone.
2. They would quickly understand the solution and its value.
3. They would have sufficient authority to make a purchasing decision without seeking approval from several other people.
4. They would negotiate less aggressively than large corporate customers, resulting in better gross margins.

If those assumptions were correct, Tangeryne might be able to replace a slow, expensive enterprise sales process with a faster, more scalable telephone-based model.

Testing the approach

The first tests assumed that a salesperson could sell a subscription during the initial call.

That proved unrealistic.

Prospects were willing to talk and could understand both the problem and the proposed solution, but they were not prepared to buy immediately. Closing the sale remained difficult on the second and third calls as well.

In other words, the original four assumptions appeared to be correct. What did not hold was an implicit fifth assumption: that an IT manager who understood the value proposition would be willing to buy a subscription based on a telephone conversation.

Tangeryne therefore tested a different proposition.

Instead of asking the prospect to buy, the salesperson asked the IT manager to accept a free trial.

This changed the nature of the decision. The prospect no longer had to decide whether Tangeryne’s claims justified spending money. They only had to decide whether it was worth testing the service.

To start the trial, the potential customer had to redirect the MX record for their email domain to Tangeryne’s service. Once activated, Tangeryne filtered the company’s incoming email for 14 days.

During that period, the solution collected sufficient data to demonstrate its behaviour in the prospect’s environment. The follow-up sales call could therefore be based on actual results rather than a sales pitch or a standard demonstration.

Instead of saying, “This is what our product can do,” the salesperson could say, “This is what our product has done for you during the past two weeks.”

That made a substantial difference. Over the course of a month, a salesperson would typically reach about half of the IT managers on their prospect list. Of those reached, roughly half were willing to have a conversation.

Among the prospects willing to talk, around 14 per cent agreed to a free trial.

Agreement, however, was not the same as action.

Only about 7 per cent actually activated the trial. In other words, approximately half of those who said yes never got started. The reasons were usually mundane. Some forgot. Some became occupied with other priorities. Others had apparently agreed simply to get rid of the salesperson. But once a prospect activated the trial, the probability of a sale changed dramatically. Approximately 67 per cent of activated trials converted into paid subscriptions.

That was the crucial insight.

The cold call itself did not have to sell the subscription. Its job was to move the prospect into a process in which Tangeryne could demonstrate value using the customer’s own data.

The weakest points in the funnel were not at the final close. They were earlier: first in reaching the prospect, and then in getting someone who had agreed to a trial to actually activate it.

The experience illustrates an important point from my previous article: cold calling does not necessarily have to complete the sale. Its role may simply be to initiate a process in which follow-up, nurturing and evidence gradually move the prospect towards a positive purchasing decision.

Bringing the sales process in-house

Once Tangeryne had demonstrated that the model worked, the next challenge was scaling it.

The founders established an in-house call centre and began recruiting salespeople. They also hired an operational sales manager to run the activity.

Revenue grew rapidly.

However, another pattern soon became apparent: some people were much better at telephone sales than others.

Tangeryne brought in external sales coaches to improve the team’s performance. Coaching significantly increased overall productivity, but large differences among individual salespeople persisted.

The top-performing 10 per cent of the sales team shared several characteristics:

• They made more calls than the average salesperson.
• They quickly disqualified prospects who were unlikely to accept a free trial, allowing them to spend more time on promising opportunities.
• They were good at making prospects feel comfortable and willing to discuss their situation and the solution’s potential benefits.
• They were better at moving prospects from one stage of the process to the next, although it was difficult to identify precisely what they did differently.

That last point mattered.

Tangeryne could teach the process, provide coaching and measure activity, but it could not easily turn an average telephone salesperson into a top performer.

That became a constraint on further growth.

The recruitment challenge

To continue scaling, Tangeryne had to recruit salespeople continuously.

That proved difficult for two reasons.

The first challenge was attracting enough applicants. Tangeryne therefore worked with temporary staffing agencies and recruitment firms, which supplied hundreds of candidates each month.

The second challenge was harder: predicting which candidates would become productive salespeople after product and sales training.

Interviews and CVs were poor predictors of actual performance on the phone.

Tangeryne therefore introduced a two-day assessment for applicants. Candidates were paid to participate. They received a brief introduction to the product and the sales process, then were given a telephone and a list of prospects to call.

Coaches and the sales manager listened to the calls and observed how the candidates performed in a situation close to the job they would actually be doing. The coaching also revealed how well each candidate responded to criticism and recommendations — and, more importantly, whether they could translate that feedback into changed behaviour on subsequent calls.

The assessment substantially improved Tangeryne’s ability to predict which applicants were likely to succeed.

It created another problem, however.

Many candidates were reluctant to devote two full days to an assessment process, even though Tangeryne paid them for their time. Unemployed candidates were generally willing to participate, whereas people who already had jobs often found it difficult to take two days off work.

Tangeryne had improved the quality of its recruitment decisions, but at the cost of reducing the pool of people willing to go through the process.

Measuring where the time went

As Tangeryne continued to scale, we began measuring the sales time required to generate one subscription.

The result was revealing.

For each sale, the team on average spent approximately:

• 170 minutes trying to establish contact with prospects.
• 170 minutes pitching and conducting sales conversations.
• 15 minutes getting the trial activated.
• 15 minutes converting an activated trial into a paid subscription.

In total, one sale required approximately 370 minutes of sales time.

That meant that about 46 per cent of the time was spent simply trying to get hold of someone.

Another 46 per cent was spent on conversations with prospects.

Only around 8 per cent was spent on activation and final conversion combined.

This distinction was important.

The 170 minutes spent pitching were not necessarily wasted. Those conversations were the sales process. They were where prospects were qualified, the problem was discussed, and agreement to a trial was secured.

The 170 minutes spent trying to establish contact were different. Much of that time consisted of dialling, waiting, reaching voicemail, calling back and trying again.

The salesperson’s skill had relatively little influence on whether someone answered the phone.

That made the contact stage an obvious target for productivity improvement.

Breaking up the sales process

Because Tangeryne struggled to recruit enough high-performing salespeople, management began looking at the problem differently.

Instead of asking, “How can we find more people who are excellent at the entire sales process?” the question became, “Does every salesperson need to be excellent at every part of the process?”

The answer was no.

The process could be divided into four main stages:

1. Reaching an IT manager by phone.
2. Securing agreement to a free trial.
3. Ensuring that the prospect actually activated and completed the trial.
4. Converting the completed trial into a paid subscription.

Renewals and upselling were also part of the wider revenue-generation process, but they are outside the scope of this article.

The four stages did not require the same level of skill.

New recruits and lower-performing salespeople handled the first three stages. The top performers were concentrated on the final stage, where their ability to close made the greatest economic difference.

This division of labour improved the productivity of the sales organisation as a whole.

It also reduced Tangeryne’s dependence on finding large numbers of salespeople who could perform every part of the process equally well.

Looking for the next productivity gain

Once we had measured the process, another question emerged.

Could we remove some of the time salespeople spent simply trying to reach prospects?

I proposed testing a predictive calling system.

The idea was straightforward. Instead of having a salesperson manually dial one prospect after another and wait to see whether anyone answered, a system would automatically call prospects. Only when someone answered would the call be assigned to an available salesperson.

In principle, this could reduce a large part of the 170 minutes per sale spent on dialling, waiting and unanswered calls.

That did not mean the entire 46 per cent could be eliminated. Some effort would still be required to identify the right person, deal with gatekeepers and make repeated attempts. But the measurement showed that contact creation was among the largest areas where technology could improve productivity without requiring the salesperson to become better at selling.

Unfortunately, the test was never carried out.

We therefore do not know how much productivity a predictive calling system would actually have added, or what other benefits and drawbacks it might have introduced, such as changes in call quality, customer experience, salesperson utilisation or the number of abandoned calls.

That is an important qualification. The data identified the bottleneck. The proposed solution remained a hypothesis.

Retention remained difficult

Even with a more specialised sales process, recruitment and retention remained difficult.

Tangeryne found it particularly hard to retain people working in the early stages of the process, despite paying them well. The work involved a large number of outbound calls and frequent rejections.

Retention was a challenge across the sales organisation more generally. Few people regarded outbound telephone sales as a long-term career, and the average tenure was approximately 18 months.

That meant the company had to keep recruiting, assessing, training and coaching new salespeople simply to maintain capacity.

The cost of cold calling was therefore not just the minutes spent on each sale. It also included the organisational effort required to keep the sales machine staffed and productive.

What the Tangeryne case tells us

Cold calling should not be judged in isolation. It should be judged by the role it plays in the complete revenue-generation process for a specific product, market and target audience.

The Tangeryne funnel makes that clear.

A salesperson typically reached about half of the IT managers on their prospect list in a month. Roughly half of those reached were willing to engage in a conversation. Around 14 per cent of those conversations resulted in agreement to a trial, but only about half of those prospects actually activated it.

Once the trial was activated, however, 67 per cent bought a subscription.

The closer Tangeryne got to demonstrating the product’s value in the customer’s own environment, the higher the probability of a sale became.

Several conditions made telephone-based selling work for Tangeryne.

First, Tangeryne offered a relatively simple solution to a well-recognised problem: spam and malware.

Second, IT managers in Nordic SMBs were generally accessible by telephone and typically had sufficient authority to purchase the service without involving a lengthy internal approval process. Tangeryne discovered that this was not necessarily the case in other countries.

Third, almost all prospective customers already had some form of email-security solution. They were therefore reluctant to replace it simply because a salesperson made a convincing pitch or showed them a standard product demonstration.

The free trial solved that problem.

It gave the prospect a low-risk and low-effort way to evaluate the service using their own email traffic. Rather than asking the customer to trust Tangeryne’s claims, the trial produced evidence from the customer’s own environment.

At the same time, the funnel exposed two very different kinds of friction.

The first was contact friction. A large share of sales capacity was consumed simply trying to reach the right person.

The second was activation friction. Saying yes to a trial was easy. Actually making the technical change required to start it was another matter.

The first problem suggested automation. The second suggested better follow-up and assistance after the prospect had agreed to the trial.

Could another sales approach have produced the same or better results?

Possibly. Tangeryne never tested one at comparable scale, so the case does not demonstrate that cold calling was the only viable model.

Nor was the model easy to operate.

It required substantial and continuous investment in recruitment, training, coaching and management. Maintaining motivation and productivity was demanding. Salespeople experienced frequent rejection, and rejection during a telephone conversation can feel considerably more personal than an unopened email or an unread white paper.

Nevertheless, the economics worked.

The value proposition was relatively easy to understand. The target audience could be reached by telephone. The initial commitment — accepting a free trial — was small. The trial reduced the customer’s perceived risk and generated evidence of value. And the sales process could be divided into specialised stages, allowing Tangeryne to use its best salespeople where they created the most value.

Perhaps the most important lesson is that improving cold-calling performance does not necessarily require better salespeople.

Tangeryne improved performance by changing what prospects were asked to agree to, measuring where time was actually spent, and breaking the sales process into specialised stages. This made it possible to identify the behaviours and skills associated with the best conversion rates at each stage, and then train and coach the employees best suited to that particular task. Improving productivity in this way was faster and easier to measure than relying primarily on recruiting supposedly better salespeople.

The measurements also suggested that some of the largest gains might have come from removing work from the salesperson altogether.

The lesson from Tangeryne is more specific than simply saying that cold calling can work.

B2B sales over the phone are most likely to succeed when the product is easy to explain, the customer already recognises the problem, the benefit of switching is clear, and the purchasing decision is relatively small.

Tangeryne had an additional advantage. It could offer a trial that required limited effort from the customer and demonstrated the product’s value using the customer’s own data. That reduced the risk of switching and gave the salesperson something more convincing than a pitch: evidence.

But finding a model that works is only the beginning. Scaling it requires substantial management effort and a willingness to keep measuring and improving each stage of the process.

The broader objective is to make performance less dependent on exceptional individual salespeople. The process should be designed so that ordinary people can be recruited, trained and coached to perform the part of the sales process they are most comfortable with and best suited to. That requires identifying what drives conversion at each stage, specialising the work accordingly, and continually reducing reliance on individual judgement, talent and effort.

In that sense, the real challenge is not to build a sales organisation full of stars. It is to build a sales system that consistently produces good results with ordinary people. If you can turn ordinary people into stars by giving them the right role, training, and coaching, scaling becomes far easier than if growth depends on finding people who have already been stars elsewhere. The pool of ordinary people will always be much larger than the pool of proven stars.