What is a Cold Call?

What is a Cold Call?

Cold calls are unsolicited calls placed by contact centres to prospective customers, usually with the intention of making a sale or introducing a product. Outside the contact centre industry, cold calling can also refer to unsolicited home visits.

Even when well executed, cold calling is rarely well received, and frequently ranks high as a practice that irritates consumers. It has even been suggested that cold calling can generate a net loss for businesses, who may damage their brand by embracing it.

Many countries have government-resourced programmes in place to prevent marketing calls reaching any members of the public who opt out of receiving them. In the UK this is the Telephone Preference Service, equivalent to the US ‘Do Not Call’ list.

The Case for Cold Calling

Unsolicited calling has traditionally been a numbers game. Although success rates are very low – typically below 4 per cent – the practice is feasible because the cost of placing the call is also low.

Modern cold calling is data-driven to a much greater degree than ever before. While previously the technique involved working indiscriminately through a list of phone numbers, modern callers will usually hold some information about the recipient prior to the call. The prospect will likely have been targeted based on previous behaviours. For example, businesses are often able to obtain lists of consumers who use similar services to their own.

However, the older and more indiscriminate model does still exist through automated processes: outbound calls placed with IVR. Although this has an even lower success rate, the cost per interaction is correspondingly low. Some companies exist only to generate leads this way, which they later sell to appropriate businesses.

Another major issue with cold calling is the association in the public mind with criminal activity. Lists of individuals vulnerable to manipulation are circulated for the purpose of repeated targeting for fraudulent products or services. This association has done damage to a practice which was admittedly unpopular to begin with.

There is also a fine line between cold calls and nuisance calls. Contact centres need to ensure that they stay on the right side of the law and that they do not make nuisance calls.

Obeying the Law

Negative press around cold calling has led to it being among the most regulated parts of the industry. Knowing and obeying the law is the single most important task when organising an outbound call drive.

Lists such as the British TPS and the American DNC allow consumers to opt out of receiving marketing and sales calls, although research calls are still permitted.

A variety of new controls have been introduced in the UK following a joint action plan from Ofcom and the Information Commissioner’s Office (ICO). Callers must be able to supply consumers with a postal address or free telephone number so they can formally request that their name be removed from call lists. The use of withheld numbers has also been banned, forcing callers to display Calling Line Identification (CLI).

Rules have also been implemented around silent and abandoned calls. These can occur when predictive diallers place calls without an agent being available to conduct them. In the UK, no more than 3% of a centre’s total outbound calls are allowed to be abandoned by the centre.

Answering machine detection (AMD) improves efficiency for contact centres but frequently leads to silent calls. Although the technology has improved a great deal in the last few years, silent calls are still a major nuisance and can land non-complying businesses with large fines.