How cold calling (properly) works better than AdWords

This is a guest post from Robert Graham — a solo bootstrapper who blogs about the experience. Robert has been working in software since 2005. He is a Ph.D. dropout who spent time working for Google. Someday he’d like to work for himself.

When I started marketing my first webapp almost two years ago, I started the way I imagine most people do: online. My mom recently started publishing online courses and my eighty-one year-old grandmother has an iPhone.

SEO is extremely powerful, but it takes time. I didn’t know much about marketing and I hadn’t prepared for the kind of lead time necessary to be effective. Search Engine Marketing and online ads on the other hand can be set up in minutes. Anyone can sign up and unleash an AdWords campaign.

So, AdWords… How’s that working for ya?

I thought I understood AdWords pretty well. I even worked on the AdWords API team as an intern at Google. I logged on, created an account, pumped out a few ads, and began awaiting approval. It was great. I didn’t have to leave the building or make messy pitches to humans. Google could tell me how many people would see the ad in a day. Even with my small niche and low traffic keywords, I’d have plenty to get started. I figured the real problem now was scaling my web application with the influx of new users and handling the overwhelming number of requests to pay me.

It turns out that AdWords is not as simple as it sounds. You need clever, carefully crafted copy and well-designed landing pages. You can’t sell anything without significant traffic, especially since 80% of it is crap even with a good campaign, and it is preferable that some of that traffic is not costing you dollars per click.

On top of that, the cost has escalated tremendously over time. Those higher costs make learning to write ads, manage campaigns, A/B test, and design landing pages a very expensive activity for an early stage, bootstrapping startup. Each of those pieces merits its own book alone. Writing the ads is an extremely valuable skill set. Those ads must be perfectly tuned and targeted text missiles that leave potential customers with a thunderstruck need to open their wallets. I found that my product was difficult to express succinctly within the constraints of a small text ad. I paid good money to get people to click, but if they didn’t buy I was left wondering why. You can add surveys, but online text ads are just not a high-fidelity connection with a customer. Additional interactions or elements on a landing page will often curb your conversion rate.

Some niches are perfect for AdWords, but many are not. These two types of niches usually look pretty similar to the uninitiated. After some dismal results and a $150 spend I had nothing to show for it. No new customers and no understanding of what went wrong after they hit my page. This was a low point for me. Failing fast is only useful when you learn something. Of course, I had spoken with people in developing the product. I had a lot of positive feedback and interested prospects, but pushing beyond my contacts was a new challenge. I killed the campaign and decided to try something new. I wanted to exhaust my options. After a few experiments, I decided to try cold calling.

Phone, Robert. Robert, Phone.

No one likes cold calls and they don’t work, but I didn’t want to give up. I searched around and came up with a list of a couple dozen numbers. This is secretly a big win. I had a good idea what my customers should look like. I could pick out the best candidates from magazines, directories, and webpages. Say what you will about the power of targeting on Facebook or AdWords, I manually collected contact information for 20+ ideal customers without too much effort.

I’d like to tell you it was smooth sailing from there, but the truth is that calling people I didn’t know to pitch a product or set up a meeting was terrifying. I didn’t fear the social aspect of rejection as much as learning that my idea was bad, unworkable, and I had wasted my time. When I finally made a call or two and found myself hanging up on a voicemail prompt, I congratulated myself on overcoming my fears and called it a successful day.

After another week of self-congratulation and bad excuses, I actually made contact with several prospects on the phone. They were all happy to speak with me for a few minutes, but only when I didn’t try to sell them anything up front. When I reviewed my notes from the early calls, I found I usually forgot to ask certain questions or I failed to collect information I really wanted to get. I know that I have reservations about sounding like a salesman. In my earliest calls that really hurt me because I used that as an excuse to avoid planning for objections and preparing for the calls.

To fix this, I began to script all of my interactions on the phone. I kept notes on objections and the success of my responses. At first, I started my calls with a two to three sentence monologue about who I was and what I was doing. It usually went something like:

“Hi. I’m Robert Graham and I’m an internet entrepreneur working on software for deer management. I thought you might be interested in this project and I’d love to chat with you about it for fifteen minutes.”

This is broken because I’m leading with too much information about myself and I identify myself upfront as trying to sell them something even if it is a bit subtle. I reformed the script a bit over a few calls:

“Hi I’m Robert Graham. I’m really interested in learning more about deer management. I noticed you guys on the [location] and was impressed by your work on [thing]. I was hoping you could chat with me for a few minutes about it.”

This is an improvement because I start talking about them almost right away and I show that I’ve done my homework on them. No one tries this hard. It really connects with people, but beware of sounding like you’ve done more homework than you have. It can come back on you. This script got people talking. It’s a good way to open a cold relationship to a followup, but it limits where you can take the conversation.

Each of these small insights increased my comfort and success in closing calls. The biggest realization was that direct rejection or passive deflecting rejection didn’t mean a lot by itself. Those scenarios usually provided me with information about a technique I could add, a customer need I had missed, or gave a clearer picture of who my customer really was. One call I made turned into a pleasant chat with a gentleman who lived nearby and had a soft spot for entrepreneurs. He had studied business at Harvard and was an executive in the startup that built the first railroad from Brazil’s agricultural heartland to Sao Paulo. His connection to deer management was as a retirement hobby. This turned into a theme across several prospects. Many were former entrepreneurs starting a business in the whitetail deer industry as a hobby. This allowed me to connect as a young guy starting a new business and it played into what language I used and questions I asked. Mentioning that I was ‘starting something on the side’, ‘trying to understand the market’, or ‘filling a need I saw in the market’ would often add to rapport. At some point I realized that I could improve closing if my approach was incremental, but I had to avoid sounding like a salesman, and I needed a reason for them to talk to me again.

I decided I would offer to write them up on my customer-focused blog in return for a tour of their facility and a short interview. It gave me blog content, a personal chance to add customers, and a way to learn a lot about my prospects. It gave them some traffic, a relevant link, and a blog mention they could point to for social proof. This was clearly a win-win. I had a reason for them to continue talking to me.

“Hi, I’m Robert and I run a blog focused on deer management. I am looking for a few people to visit, tour your facilities, and talk with you about your business. I can then write up the experience and link you up on the blog.”

This is a huge improvement because it opens the relationship, has a focused call to action, offers them something instantly, and keeps the initial call very short. I can bring up anything when we speak in person and it’s easier to gauge what to say when you can read body language. I usually brought a battery of questions with a blog article in mind, but I also sprinkled in questions about what they used to solve the problems I was working on and tried to understand if I could help them. If I could, I would dive in there.

One guy was extremely skeptical on the phone and told me so. He was on full sales alert. He asked exactly what I was getting out of all this. I just explained the truth.

“I’m working on an online software product for deer management and I’m looking to learn from people in the industry and make some connections. I think the blog is a win-win way to do that. Low risk for everyone.”

Sure enough, each and every prospect, skeptical or not, I used this pitch on agreed to have me out. I booked a week of appointments in a handful of calls. I was so successful, I was forced to start telling people I would contact them the following month to set a date. I had too many appointments and too many blog posts to write. Making the pitch a true win for both of us was the magic that generated the 100% conversion to the next step, but each small piece of experience and learning contributed to that success. I learned a lot about my business from each visit. I didn’t close 100% to sales, but those relationships have yielded a lot more than a simple close. Many people have contacted me weeks or months after our first conversation and ask if I’m still solving the problems we talked about.

But…

I didn’t execute AdWords very well. Isn’t that the source of my failure?

I am sure this hurt me, but I think I managed the campaign as well as most engineers in my position would. I didn’t start with any expertise in telemarketing either, but it has fewer elements and more direct feedback loops.

Isn’t it better to use marketing methods like AdWords consistently? Wasn’t my spend too small?

Yes and no. It’s better to use AdWords when you understand your customers and their language. It also helps to have data on what you can spend and stay profitable. Consistency is only great in AdWords when you are consistently making money. Other marketing vehicles are a little different. If anything, my spend was 100% too large.

It won’t scale.

Not every activity should. No one buys products because they scale well. People like a personal touch.

At this point in my company it was far more valuable to land a dozen orders, learn a ton about what my customers really think, how they speak about their own problems and my product, and therefore figure out exactly how to thrill them and sell them. This part doesn’t need to “scale,” it just need to happen. The only way for it to happen is to talk to a lot of people.

Verify that there is a business to scale first. Scaling is one of those good problems to have. It’s also a very different problem than you have at the beginning.

Take-Away

Don’t do what everyone else does. Stretch yourself in new areas. Reach out to customers and develop personal relationships. Those relationships will change everything about your business in a way that online conversions can’t.

Your niche may not be a suitable one for success in cold calling, but there is only one way to find out.

And even if you end up not being able to scale your business on cold-calls, it’s hard to believe you won’t learn a lot of valuable information in the process.