[00:00] Mike: This is Startups for the Rest of Us: Episode 96.
[00:11] Mike: Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
[00:20] Rob: And I’m Rob.
[00:21] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
[00:25] Rob: I’m good. I just took four days off for Labor Day weekend. So of course instead of actually taking four days off, I got this bug in my ear over the weekend and rewrote my churn, not algorithm but my report. So I have this one page dashboard I use in HitTail, and has all these numbers lifetime value and I’ve talked about it before. But what is bothering me is that when I got a big spike and new customers my churn 30 days later would spike way up. And the reason is with typical SaaS businesses any type of recurring you have the highest churn in your first 30, 60, 90 days and then it settles down after that.
[00:59] And so if you have an imbalance, you know, people who are in their first 30 days and you have a ton and then you’re overall churn is not a good measure because you need to break it down. And so I was like no problem. I’m just going split that out. It’s the weekend. I had a corona with a lime in it. I’m sitting there writing a little bit some SQL queries. And 5 hours later, no joke, I finally, I just it kept not working the way I want it. Now granted my data model is not the most elegant and normalized data model. I inherited it from the previous owner. So there were some challenges as well as some dirty data. I have to kind of code around in the SQL statement. Don’t include it if that string field includes this underscore. I mean this crazy stuff like. But once it all got done now I’m very happy that I spent almost an entire day over Labor Day weekend to split out my churn into 30, 60, 90 days and beyond. All right. So, how about you? What have you been up to?
[01:52] Mike: I spent the last week or so working pretty hard on AuditShark and I’ve churned out more than 5,000 lines of code over the past week and a half or so. A lot of it was of I’ll say copy and reformat type of code. So basically I have a component that I had built and then I needed to build another component but I also needed to reuse or I wanted them to share the same kind of web services on the backend. So essentially what I did was I wrote a generic version of the component code and all the classes that go along with it.
[02:23] So essentially I had to refactor a lot of the code in order to make it generic enough that I could use it again for other components that I have that are coming down the line a little bit later. So most of it as I said was copy paste. But I had to tweak a lot of it and make sure that the logic still work. And that took a long time to get done but I’m really happy with how it all came out. And as of yesterday, I’ve had the new agent installed on a couple of servers. So that’s been running. I haven’t seen any problem so far.
[02:49] Rob: Well good. Is it true that as of today we are 6 days away from the AuditShark early access?
[02:56] Mike: Yes, it is true.
[02:57] Rob: And so when this goes live it would actually be the day after. So yeah, early access is on September 10th. You’re going to hit that?
[03:05] Mike: I think so. I’m looking at my list of things that still needs to be done on my end for the early access and it says that I’ve got 36.5 hours worth of work left. I went through everything that I have in five bucks and assigned a time estimate to it. And I was pretty conservative for most of my time estimates. So I think that it seems reasonable and the 36.5 hours from today would realistically leave me about a day short. But as I said I was conservative with those times and I think some of them will just take a little bit less time that I’ve estimated. I fully plan on spending some additional time probably this weekend to make sure that everything gets done.
[03:42] I won’t call it a concern but the one thing that I’m not terribly happy about is that I know that some of the content is not going to be done. So I’m not going to be able to launch it with the policies the way that I want them to be from the server. So there’s not going to be enough content that people are [auditing] for on day 1 but that’s also something that’s going to take time anyway. I mean it’s not like I can just launch on day 1. Like if I was doing a vulnerability scan I would launch on day 1 and say okay we’ll I’ve got 3 million vulnerabilities that I’m scanning for. It just doesn’t really work that way.
[04:12] Rob: I think that’s why they called it early access.
[04:13] Mike: Yeah. Yeah. [Laughter]
[04:16] Rob: So August was a good month for HitTail. I was actually worried because internally because July was the best month ever. But there was that $1,000 article order, remember. And I was concerned that I was actually going to decrease, you know, have less revenue but I wound up making it passed that and another several hundred bucks. So I made it to another milestone. And some things in terms of marketing are not working at all but the ones that are working are working quite well. And so it’s driving a lot of new trials, you know, it continues to grow. So it’s been good to be hitting on a few cylinders that I’m trying.
[04:51] Mike: That’s really good to hear and that’s part of why I’m working on AuditShark cause it kind of reposition it as more of a SaaS application more anything else and I kind of made that decision a long time ago. But in talking to some of the webhosts this past couple of weeks, I found that they are more than willing to pay for a product like AuditShark on a subscription basis. The price points that I kind of talk to them about they don’t really seem to blink at down there. Just like a couple thousand a month, that’s no big deal, whatever.
[05:20] Rob: Yeah, I would expect that would be a huge sticking point. Speaking of couple thousand dollars a month, do you have a billing mechanism in place if I sign up?
[05:29] Mike: [Laughter] No and actually I have a contractor who’s working on that right now. And that’s one of those things that, wait, why are giving me crap over this. Aren’t you the one who that waited until three days before you have to bill somebody that…
[05:42] Rob: Indeed, I did. But the funny part is he put it on the outline. And I’m like wow he’s working on it already. This is way ahead of schedule in my mind. Early access you’re like at least minimum of 30 days away from billing somebody. Do you have a 30 day trial? Is that what it is?
[05:57] Mike: Yeah. Well the thing is this is just to get the thing started for them to sign up. It isn’t the actual billing code itself. It’s just you know as part of the initial registration for customers, here enter your billing information, in the backend so that I can bill you later. But I’m not actually building the billing code yet.
[06:15] Rob: Right. That made sense. And that code actually it’s not as simple as it sounds because they do the cool java script thing where you don’t need PCI compliance. But as a result it’s a new unique experience that no one else does. So you really do have to dig in and understand what they’re doing in order to implement it.
[06:32] Mike: Yeah. I really don’t because this contractor has already done it and he did it for altiristraining.com which is why he’s doing it for this product as well.
[06:40] Rob: Awesome.
[06:41] Mike: Definitely. Not only code reuse but contractor reuse.
[06:44] Rob: That’s a best way man. I mean that’s something, every time I talk to someone about outsourcing I say if you find a good whatever developer, virtual assistant, designer any of these things, you keep them around. I have people who work for me for five years. They may be part time. They may be hourly. They maybe halfway across the world but it’s like all the knowledge that they have from my various businesses helps me moving forward cause I don’t have to redefine everything. It’s so valuable to train someone like you’re doing on one or even multiple of your apps cause you’re going to tend to use the same billing systems. You’re going to tend to have the same approaches and it’s great if someone is up to speed. It’s similar to having an employee who is just around and kind of understands the legacy of how you do things.
[07:24] Mike: Uh-huh. The one thing I have found that’s a challenge in working with some of these guys though is when I go to reply to some of their question and stuff that the Google, so when reply to somebody, the height of the box that you type in your message into it’s like 240 or 260 pixels tall. So it makes it difficult to see what somebody else has said in line with what you’re typing which is kind of pain in the neck. So I went out to search for some Chrome extensions that would actually allow you to expand the size of that. I tweeted about it and somebody said, well in Firefox you can just drag it and make it whatever size you want. And I’m like yeah stupid Firefox. But I went out and I found these extensions and I went to install them and you can’t install them anymore. You have to go to Google Chrome web store in order to install them.
[08:13] Rob: Google is doing crazy stuff. I mean I don’t know why they’re doing that. Maybe it’s a security thing but it seems like they’re making things hard on a lot of people with a lot of their choices that they’re making with their tools.
[08:24] Mike: Yeah. I read up on it. There is a way to do it. You can basically drag it on to the extension. Like if you have to download the extension on to your hard drive and then you have to drag it from there onto the extensions page in your web browser and then you can install it. But it’s a manual effort and they said that they’ve done that intentionally to help increase the security of the web browser, which is fine but is in no way shape or form obvious that that’s what you have to do in order to get it installed. They just pop up this little thing that says you can’t install this. You have to go download from the web store instead.
[08:54] Rob: And the trippy thing with Chrome is on most of the websites I visit if there’s a text area it has the draggable thing in the bottom right. But it doesn’t have that when I’m looking at Gmail and Chrome. I wonder if it’s in the Google apps. Did you see if there’s just one an enabler? I guess our listener will let us know if that’s the case.
[09:12] Mike: Yeah. I just remember searching for a quick fix to it and the chrome extension was one of the first things that came up and I’m like that’s a very quick fix. It’s simple. And I went to do it and it just didn’t work. So I thought I mentioned they change their security model on Chrome.
[09:25] Rob: Well this is one of; like I said so many things they’re doing lately that I’m just it’s like making it harder on people in general. They did the penguin update which made it harder on SEO whatever. That’s fine. Although, they did kind of hose me with the badges, they went back. Stuff that used to work doesn’t work. They have shut down their API. They had a search API that all the rank trackers used to use. So if you’re trying to track your rank of keywords you can hit the search API, get the result back, and search for URL. My URL rank this high for this keyword. They shut that down. They’re like deprecated it. So now any rank tracker you use is scraping, screen scraping Google. And they have to have this bank of servers with multiple external IP or Google will shut them down. They have to make it look like they’re a bunch of different computers.
[10:12] Mike: Funny that you mention that because my webserver in Rackspace is hosted on a subnet where they’re doing that. And whenever I try to go to Google and search when I’m on that server if I need to get something, Google pop up this saying that says please confirm that you’re a real person cause we received too many searches from this IP subnet.
[10:31] Rob: Bingo. So they’re doing that. You know they have a reason but it stinks. It makes it crappier for end users or people who used to use the Google API. I actually have an app that used it at one point. Luckily it’s not in production anymore. And then they’re taking keywords out of the searches. You know if you’re looking in your Google analytic account. I mean this is about a year old now. But anytime anyone could log into Google and they do a search and they found your website for a particular Google won’t tell you what that term is anymore. It just says not provided which is that stinks. I have a lot of website where that is very important information for me to know and to know how they’re getting there, and what terms of converting and stuff. The trick is if you pay for clicks, if you pay for AdWords clicks they will tell you the keywords even if someone is logged into Google.
[11:14] Mike: Is that what it is?
[11:15] Rob: Yes, isn’t that crazy. So it’s really a trip to watch these companies. You know the reason, [hubbub] with Twitter and what they’ve done with their API and they’re really hurting developers. And then you look at Facebook and they changes, some of the changes there making with privacy and all that stuff. You look at Google. These companies are like clawing. They’ve gone public. Twitter hasn’t yet but you know they’re on the road to it. And they’re like clawing for this revenue. They really start to do stuff that it isn’t, I don’t know if it’s necessarily in line with the don’t be evil thing anymore.
[11:44] Mike: Well they canned that whole statement a while back they rework some of their pages and somebody noticed that the don’t be evil slogan had basically been removed.
[11:54] Rob: Yeah. I mean so I’m not saying certainly not a conspiracy theory. Oh yes, shocker. Companies are going to, you know, if you’re not paying for the service then you are the product right? You’re not paying for it, Facebook. They obviously are marketing you. The same thing with Twitter and Google. None of this is shocking. I’m not saying Google is the worst thing on the planet. We used a lot of their tools. I like it. But it is a boomer when it impacts our usability, our ability to basically support our businesses as we use their tools. I don’t know. How things turn around but I don’t necessarily see that in the future.
[12:25] Mike: Well I think that they’re just going to continue to do whatever, I mean I don’t expect them to work any different than any other company. And they’re going to do whatever is best for them. You know that’s going to fit in line with their don’t be evil. And the face of that is going to well if it’s bad for us, we can’t do it. If it’s evil for us, it must be evil for the world. So if you’re doing something that negatively affects us then we’re going to shut you down because it hurts us which ultimately turns around and hurts everybody else. Which isn’t necessarily true but you know that’s the line of thinking that I feel like they’re following. There are certain things that they’re doing that I just kind of shake my head.
[13:00] Rob: Right. I mean even the not showing the keyword when someone is logged in that is absolutely impacting too. Like I’m able to, my service is able to provide less value to people because I have less information on how people are finding the websites so I can’t offer as many suggestions.
[13:17] Mike: So what are we doing today?
[13:19] Rob: We are talking to Robert Graham about cold calling and not cold calling in a tradition sense. He’s done a lot customer development and vetting business ideas using cold calling, and he’s a software developer. I don’t know, not someone who you would think that would really be drawn to this. So today, Mike and I are going to be having a chat with Robert Graham, native of Austin, Texas. How are things today Robert?
[13:41] Robert: Going pretty well. How are you guys doing?
[13:44] Rob: Doing all right. Robert Graham is a software developer. He’s actually a long time member of the Micropreneur Academy. He’s gone to both Microconfs and he’s just a friend of the show. Robert has kind of carved out this niche probably by mistake, I think he told me once. He’s gotten really good at cold calling and he’s a believer in the customer development, a lean startup approach and so he started doing cold calling for some of the ideas he had. And he wound up writing an eBook on it. The eBook’s selling well and you know I’m just fascinated by this concept because it’s never something that I’ve done to great scale. And Robert has done it so many times that he’s become kind of startup expert on it. So welcome to the show Robert and if you could of kind of just give us a little more background about kind of who you are, what you do and how you fell into cold calling.
[14:32] Robert: Okay. Sure. I kind of came to this totally by accident like you said. I’ve been a software developer forever. You know like in 8th grade I was writing basic on my calculator to solve quadratic equation formulas in class. I guess I got into a niche from my background I grew up in southeast Texas, hunting and fishing. My dad and pretty much all the red blooded males that I grew up with all did. I knew a bunch of guys that had land or big hunters so I jumped in at some point whenever I made some of my first product to wildlife management. It turned out that they were not as online as I had hoped.
[15:12] And so it was kind of my one last ditch ways to connect I tired cold calling. And really just kind of stumble into some success after calling a lot of people with phone calls that maybe I get to talk to someone but it wasn’t taking me anywhere. And other one where I know on the first couple of calls if I got a voicemail prompt I was happy like it was a success. So I didn’t start in a place where I was very good in this or even excited to try but eventually after a little bit of success it went to the other direction for me.
[15:46] Rob: Right. And have you used cold calling both to vet ideas like in the customer development sense as well as to make sales or what you used them for in the past?
[15:56] Robert: So this gets a little under the semantics of what you mean by cold calling. I don’t know if I’ve ever sold something directly over the phone where the person I’m calling I’ve never spoken with before, but I’ve definitely used cold calling to starts relationships that ended in sales.
[16:11] Rob: Got it. Okay. As well as to vet product idea, is that right? To figure out if someone would be willing to pay for a product and you try to figure out if you’re going to build it at all?
[16:22] Robert: Yeah. I mean that’s probably the no. 1 thing I’ve done with cold calling. And I think the two things are tied up together if I were kind of starting over today how I would approach it.
[16:32] Rob: Right. Mike you’ve also done cold calling. What capacity did you do it in?
[16:35] Mike: That’s from Moon River Consulting and it was back in probably end of 2007 and early 2008 and when I tried to scale up the company. Essentially, I was trying to generate leads for some of the products that we were selling and doing consulting on. They were primarily Altiris and Symantec products. And essentially what we’re doing is we would get this list, they called them unqualified or semi-qualified leads from Symantec.
[17:02] So whenever an enterprise customer download something from them, you give them their email address and they will add it in to their database and try and match it up with any phone numbers or names that they might have. And then they’ll take those leads that if they don’t think that they are worth their own sales rep’s time to follow up on they’ll basically divvy them up and send them out to their partners. So what I was doing was going through this list of leads and trying to talk to people to figure out what it is that they were looking for and whether or not there is anything that we can help them with.
[17:35] Rob: Got it. So you really were doing then outbound cold calling for sales.
[17:40] Mike: Yeah.
[17:41] Rob: Okay. So that’s cool. That’s good to know. So it sounds like we have a variety of experience here. Robert, you wrote an eBook on this. What’s the URL?
[17:49] Robert: It’s www.coldcallingbook.net.
[17:52] Rob: Okay. So talked to me about how cold calling and cold emailing maybe complement things like contact creation and list building and traffic generation. Like why would someone do cold calling in addition to those other things?
[18:06] Robert: Right. So I think the biggest answer is because they can be extremely complementary. One of the things that you need to do as part of any contact creation strategy is have good sources for that content and good places to continue getting new ideas. And I think whether part of say an interview series with some of your customers or your potential customers where you could highlight themselves, their facilities, how they do business, best practices. You could invent awards that you give out and do all kind of different things where you have readymade content for the web.
[18:40] I know the award I did I kind of stole from Rand Fishkin who talked a lot about it. He said there’s one like Seattle startups or top 100 or something page that, you know, it’s just someone’s complete invention. And it doesn’t even matter how the ranking get generated or why, but everyone that he knows and had seen visit the page cause they want to see the rank. And I think that’s true you know everybody experience with post and ranking across all kinds of different things.
[19:10] So it’s a good way to have content to put out there. It’s a good way to have goodwill with your customers and also start relationships with new people. And that means a lot of different things. But cold calling if you’re mostly online or you’re mostly in magazines or wherever your main channels are, if you’re going to cold call you can really tap into network that you’re not a part of. And even a small foot hold in a new network can have an exponential effect once you make some people there really happy.
[19:42] Rob: I see. So you’re saying you use the cold calling to build a relationship, to get into a network that you otherwise wouldn’t be able to.
[19:48] Robert: Right.
[19:49] Rob: I’m curious Mike. I’m curious to hear yours sense of like back in the day when you were doing cold calling, why were you doing cold calling instead of other types of whether it was like online marketing or other approaches.
[20:02] Mike: I started doing cold calling more in part because it was forced on me. Their previous relationship that had been in place between Altiris and Symantec and their partners was that you would work very hand in hand with the sales reps. And then Symantec started pulling in a lot of leads they were getting and started bringing in partners a lot less. And basically said, well instead of us giving you leads you’re going to have to find your own. And they ended up torpedoing most of their partner network at one point because of that.
[20:33] And in about a year they shifted their strategy and kind of came back around on it, but by then they’d already killed about half of their partners in that particular space. So for me, it was more of I’d say a force direction than something I said like oh this seems like a great idea. And one of the things that I’ve found was that when you actually get in and you start talking to somebody especially when it comes to enterprise sale they expect you to be there.
[20:56 ] And they expect somebody, they expect to be able to put a face of a name is really what it comes down to. And doing any sort of inbound marketing efforts those tend to yield a lot less because at the enterprise scale these customers are used to having sales reps kind of walk in the door and introduce themselves and say here this is what I’ve got for you and this is how it can solve problem X, Y and Z.
[21:19] Rob: Right. Okay. We’re really talking about two different kinds of cold calling here. Mike has done mostly or entirely outbound sales cold calling. What we would traditionally think of as that kind of stuff. And Robert has done mostly costumer development cold calling which is calling people to figure out if they would buy an app before he builds it and then often like he said that does turn into a relationship later on that he can then go make a sale because the person has probably followed his development for several months while he got the product going.
[21:48] So we’re going to keep those two things. So I think my first question is as someone who is obviously much more of an online marketer and I bet there are a lot of folks listening to the podcast who feel the same way. There is this aversion to cold calling. In your book Robert you say how to get over the fear. So you use the word fear or you know a lack of desire to do it. What are some strategies and some thoughts on how you’ve done it, how you recommend people do it and then Mike we’ll toast it over to you when he’s done.
[22:14] Robert: You’re specifically asking about overcoming fear?
[22:17] Rob: Yeah.
[22:18] Robert: Yeah. So overcoming fear is a big thing for a lot of people with cold calling. I mean I kind of look at it a little bit in the rear view mirror which I think is both really good for giving advice and really bad for giving advice. Sometimes hindsight is 20/20 but it’s not quite right. I think the really bad cliché to answer that everyone will give is just do it and it will get better. You know practice makes perfect. The better answer is we need to figure out exactly what it is about cold calling that bothers you.
[22:46] Are you unconvinced that it will help your business? Are you scared of rejection? Are you scared of talking to people you don’t know? Are you scared do humiliation? Are you scared your product isn’t good enough? You need to really think about and isolate those factors and then kind of come up with things that you can do whether it’s role playing friends, calling old friends out of the blue, maybe some of that pickup artist techniques that see where people try to get rejected in the mall by people they don’t know.
[23:17] There are lots of different things that you can try to experiment with to get over some of those fear and then I mean eventually you just have to take the final step and make some calls. And know that the worst case on a bad cold call is that you get rejected, maybe someone yells at you. Honestly in all the cold calls I’ve done, the worst I can say that I’ve had is someone say that they weren’t interested in a less than friendly way.
[23:43] Rob: Right which is not that bad. So when you were vetting say I know you ran kind of a tracking service for a whitetail deer and did you make calls before that to find out if people were interested or you build it first and then call.
[23:59] Robert: That one actually, there were two products in that space and the first one I build before I called anyone and the second one I build after I had done some customer development. And each of them kind of had varied level of success and it’s a long story. But that’s the answer.
[24:15] Rob: Got it. And so if someone listens to this and they’re thinking I don’t have a whitetail deer startup. I have a startup where people are online. It’s an analytic package or something dealing with social media. I know my audience is online and I know that I can do some SEO or Pay Per Click or get on Hacker News or TechCrunch or any of these things, build a landing page, get an email address and then email some people and starts some conversations. In your opinion, do you think they should consider cold calling and what do you think the benefits would be over the approach I’ve just mentioned.
[24:45] Robert: I think it does depend a little bit on your market. I think you need to gauge what people’s expectations would be and if receiving a cold call for that type of business would be an absolute shock then you probably don’t need to engage in cold calling. But there are a lot of businesses that while they have an online component or they can get significant online traffic, it’s also a traditional B2B scenario where it’s definitely in balance to make calls to people and see what they would be interested in doing.
[25:16] I know a lot of different things come to mind. I would say I was in wildlife management. It’s a big agriculture industry. I know a couple other people writing software in that space that are making full time livings and cold calling is kind of a part of it for them. I would say proposals for designers is another place where it seems like a lot of those companies wouldn’t be totally out of balance to give a call. It may not be the fastest way to scale in every context, but I think it’s a great way to jumpstart and it’s a great way to jumpstart sort of new areas that you’re not well established.
[25:49] Rob: Right. So, Mike back to you. I mentioned earlier there is this fear or aversion to cold calling. You obviously did it. How did you get over that?
[25:56] Mike: It took a while to be perfectly honest. And I came to the realization, thankfully it was kind of early on, but it probably took a week or two of calls before I kind of got over it. But it was exactly the fear of calling. And I couldn’t quite figure out why it was that I was afraid to call. I finally ended up narrowing it down to the fact that I didn’t want to make the mistakes in the calls that I was making because I didn’t want to get rejected. And it wasn’t so much getting rejected it was the fear of losing you know whatever sales I was trying to pursue. It’s like if I say the wrong thing, this person will hang up on me and there’s a $30,000 sales that I just lost because I said the wrong thing.
[26:34] And that’s one of those risk that you’re just going to have to take. And you have to learn what works and what doesn’t. So what I ended up doing was I actually invested in a product called [AX]. And what I would do is I would take detailed notes about who I was calling, when I was calling them, and when I got through exactly what I was saying to them. And that I would essentially cross reference what I was talking to each person about with the other person I was talking to about hat particular topic. I also seem to find that there were certain times of the day that made it easier to get through to people.
[27:06] So first thing in the morning, at the very end of the day was usually a good time to call. Sometimes in the middle of the morning you know 10 a.m., 11 a.m. wasn’t so good. You tend to interrupt people and run into a lot of issues there. It really just took a lot of practice. And getting over the fear of I’m going to lose something by calling this person or I’m not ever going to be able to talk to this person again. And usually I can’t think of anybody who I called and they were just rude upfront but it was definitely a learning experience throughout the course of making all those calls.
[27:37] Rob: Yeah. Sure. So what was your worst? Was your worst response also something like I’m not interested in a rude voice?
[27:43] Mike: Yeah. I’d say that was probably. I mean I never got profanity. I mean I’ve gotten profanity from people in person consulting before, never over the phone. Yeah. I never got anybody who just swore at me and just scream don’t ever call me again. It was just look I’m really not interested.
[28:01] Rob: Yeah cause it’s different then the cold calling I think that we as consumers think are the people who are calling at like 6 p.m. right at dinner time and they’re to sell you long distance.
[28:12] Mike: Yeah.
[28:13] Rob: At least targeted. You know both what Robert has done and what you’ve done is at least like I work for this company, we provide this service. That’s a cost of business like that. I mean I’ve been in that position where I get inbound calls or I was managing teams at the development houses and people want to sell you tools or they want to sell you services or whatever. And yeah I was always respectful and I feel like most people are going to be.
[28:34] So it really does. I do hear that from of you that it almost sounds like this fear of doing cold calling is probably overrated. You’re not likely to get people yelling at you. It might also be the time thing. Like Robert said maybe people just don’t think it’s going to work or don’t think it’s going to be time well spent. Now, Mike you did cold calling to make sales, did you find it was a reasonable use of time or I mean did it generate sales or did you eventually abandon it and just kind of say this isn’t working right now in this niche.
[29:05] Mike: No, I did. I actually landed one of my largest sales by calling people. One of them was $169,000 sale. So it was not small by any means. I mean it was definitely worth in that regard but the problem was that and it sort of came back to the fear of calling people. I was afraid to make mistakes and part of it was that was one of the early experiences that I had with cold calling was I made this really really great sale but it just came out of the left field nobody in Symantec or Altiris expected it. It just kind of landed in my lap.
[29:39] So I was constantly afraid of making mistakes going forward. And looking back on it now I realized that most of entrepreneurs who are doing online marketing are doing the exact type of thing that I was doing then it’s just in a different mental category. When you drive people to your website, you only expect to convert like 2 or 3 or 4 out of a 100. And that’s kind of the status quote. That’s no big deal.
[30:07] But the same thing, you know, not those exact same numbers but there’s going to be similar ratios of some kind where there is X number of people that you call out of a hundred that are not going to respond to what you say. And I think the fear is for me it really derived from okay well how many of these calls do I have to make before I get to one that is actually going to yield any sort of actionable thing that I can go after.
[30:28] Rob: Right. And do you have a rule of thumb at all base on your experience?
[30:31] Mike: Specifically for what?
[30:32] Rob: For what you’re doing like outbound. It was a cold list to you. You didn’t have relationship it was at least a targeted list. It wasn’t very targeted? [Laughter]
[30:40] Mike: No. I learned after the fact that it was much less targeted than I would have thought.
[30:46] Rob: So with that in mind, with that description do you remember any idea like how many calls you had to make in order to get to the next step.
[30:53] Mike: It really depended on how targeted the person was that I talked to. I was pitching a specific type of products. If they happened to submit an email for a webcast that they may or may not have actually been interested in, they maybe just saw the headline then it kind of got categorized in a specific way and Symantec just said this person is in this bucket and go ahead and call them and see if they’re interested.
[31:14] And a lot of times it just wasn’t well qualified traffic. I have very much related to the same type thing like get it on the front page on TechCrunch and getting a 100,000 people to your website but how many of those people are targeted and actually interested in what it is you have on your website.
[31:29] Rob: Right. So there’s a lot of people walking up at a conference to your booth and saying I want to enter the iPad competition or the iPad contest to win it. So they scan your badge and it got on the list. But you don’t really want the product. You want the iPad.
[31:40] Mike: Yup.
[31:42] Robert: Yeah. I was going to piggyback what Michael was saying about conversion rate and talking about seeing that in a different way. I think it’s more personal when you’re actually making the calls as to whether or not you feel like you lost the sale in comparison to you get visitors to your website all the time that don’t convert and you don’t give it a second thought. But one big difference between having people hit a landing page and talking to people is something I brought up you can take notes and get feedback instantly on every person you talk to. And so you can A/B test and change what you’re doing with every call.
[32:18] And that doesn’t mean that you’re going to get your conversion rates to skyrocket because you always are still fighting, you’re still calling someone relatively cold and you may not be hitting them at the right time. But you can do a lot of moving toward how the costumers think and what kind of language they use really fast. Where if you even add a survey to a landing page that really hits your conversion rate a little bit because you have another call to action on a page. You have more things going on. It detracts from what you want people to do. So I think cold calling can give you a big leg up there and you can get a lot of feedback really fast.
[32:54] Rob: Right. You get a lot more of the why a lot faster than if you have a thousand people hit your site. You can tell they’re not converting but you don’t know why.
[33:02] Robert: Right.
[33:03] Rob: That make sense. Do you have any comments or thoughts on that? I mean I realize it was kind of a broad question but it was like what are the approximate conversion rates given your experience of calling to doing some kind of customer development calling for an idea. Like is it 1 in 20 calls someone actually talks to you or is more than that?
[33:23] Robert: No. For me, it was a lot higher than that. I usually try to have really targeted list that I’m going after. I do a lot of different things to target the list. You know picking people that are entrepreneurs. Making sure that I’m talking to someone who can make something of a purchasing decision, someone that has a stake in whatever it is that I’m trying to do the problem that I’m trying to solve, businesses that are close enough that I do something face to face if that’s an option.
[33:48] So all those things like just bringing you closer to the target and they realize kind of instantly as you get them talking. My percentage for doing cold calling for customer development are close to like 25% or 50% depending on the market and how good I could come up with the targeted list, how targeted the list was, and exactly how sure I was of what the product was too. That made a difference.
[34:12] Rob: All right. That make sense. I mean Mike was trying to sell something, right. People know that when you call. Whereas you as I recall had a good opener where it was like I’m a local entrepreneur and I’m thinking about building some software. Could you help, I mean it wasn’t like I’m selling you something. It’s totally different opening.
[34:31] Robert: Yeah. Well actually the opening that was most successful I wrote about close to about 100% conversion rate and that was true that happened for several weeks for me where I was calling people and I basically pitching to say hey I’m going to come out to your facility, do a tour, take some pictures, talk to you about how you handle X, Y and Z. It was people that breed whitetail deer like kind of a farm setup. And every one of them was like totally into me coming out and doing that. I mean it was free publicity for them. None of them know a lot about online marketing but they were all excited about having more of it done for them.
[35:03] Rob: Right. Cause you were going to interview them and do a little bit of case study or talk about their thing and publish it on your blog.
[35:08] Robert: I had a blog that was inside of the whitetail management niche. I mean it was really a win for everybody. And that was what got me super high conversion rate. But I’d also done calls where I don’t really have a value pitch. I’m just kind of threading on people’s willingness to help out someone getting things started. Even then the conversion rates are a lot higher.
[35:32] My brother-in-law is in heavy equipment sales and rental and I have a good friend that did door to door an commercial security system sales and they have times where they have to go to the office and make a 100 or 200 calls a day and I know their conversion rates are closer to maybe 5%. And a lot of times especially in the like residential security system space the 5% is he gets to convert 5% to let him show up and do a presentation.
[36:00] Rob: Yup. It’s next steps.
[36:02] Mike: I know some people who work in the high tech sales area for basically doing cold calling for enterprise sales. And they routinely make at least 50 to 60 calls a day and they might get 2 or 3 a week that they are able to basically hand over to sales reps to go after for the next step. I mean it’s not unusual to make that many calls in a day and have to continue making that many calls and not just getting very many that they’re able to turnover. In the past couple of weeks I’ve been doing cold calling or warm calling for AuditShark and as Robert said the conversion rate of that type of question or that type of call is significantly higher. I mean I haven’t had anybody in the past 2 or 3 weeks that I try to talk to say no I don’t have time, I don’t want to talk to you.
[36:52] Rob: Right and I think we should be clear here. The reason we’re talking about cold calling again is it obviously has a place in customer development, a place before you have a product is going to be super helpful for touching base with people who aren’t necessarily online and they’re a huge amount of niches that are not online. And even if they are online, they’re still instant way to get better feedback, to [iterate] quicker. There’s some value there. I don’t think any of us are espousing, you know, leaving online marketing behind and going out and having me stop my SEO and HitTail and just cold calling a 100x a day. That doesn’t make sense.
[37:24] We have these online marketing skills for a reason that we can bring a lot of people to our site and convert them. It’s kind of like one more approach that you can try out and obviously it’s especially good for some very specific instances. And I think I haven’t done out on cold calling, I have done some very specific emails to some companies that I know could really use some of my products. And it’s not like I get this list, a buy a list. It’s nothing like that. It’s I would pick out a single person and hand send them an email and be like hey, it’s almost like you can call cold email. But of course unsolicited cold email and spam in the US. But it’s like a personal note for me and it’s commenting on how I think this product can help them.
[38:06] So I can totally see the value of this outbound approach just what cold calling and cold emailing you know postcards and all that kind of stuff really is more of an outbound approach that we have been talking about. But there’s definitely some value there. It opens up a new market. So Robert earlier you mentioned that your conversion rate often depended on how well you were able to generate a list, like to get the call list. If I were to generate a call list I would go to Google and search for companies. I would have my VA do it then I would just put them in spreadsheet and kind of order it by some criteria. Is that how you get it or you have other recommendations.
[38:43] Robert: Yes. I had a professor in college that used to always say the answer is it depends especially when you ask marketing question the answer is pretty much always it depends. But that it’s usually a good approach to start with. There are some other places to get information about industries. It depends on what kind of industry you’re going after. If you’re going after some of the older more established industries they’re usually associations, state registry, big companies that basically just sell list like Hoovers or there’s half a dozen others that are pretty good sources of information and most of which you can get for free in different ways.
[39:24] And starting with googling is a pretty good way to start. It’s especially effective if you use a VA but you have to be a little bit careful. It depends on the types of calls you want to make and the volume of calls you want to make. I think that’s a great way to get 30 or 40 people to talk to. But if you’re really going to call 200 or sustain calling 20 or 30 a week or something then it’s going to breakdown fairly quickly.
[39:51] Rob: Right. You’re just going to run out of prospects. Let’s say someone is listening to this and they’re thinking about writing software for electrical contractors to help them with some part of their business. And they’re thinking obviously they’re not exactly target online audience that they can really drive them to a landing page and get emails. How many people do you think if they put together a list from Google of 40 or 50 local electrical contractors, do you think that’s enough if they called all of them to vet this idea or not, to kind of have an idea of whether their software idea has legs.
[40:30] Robert: In my experience, that’s enough people to talk to. I think if you can actually talk to 20 or 25 people you get a fairly clear idea. Some people will quote higher number, some people will quote lower numbers, some people will change it up and say you need 5 sales or 10 sales. The best advice I got on that front was Jason Collin picked up a tweet of mine asking a similar question a while back and he said you can stop whenever you don’t learn anything anymore. And so from that perspective you really want just to find the place where I called 20 or I’ve called 30 or 40 and I’m not really getting new things from what these people are saying. Either there’s not something I can solve here. There’s not some inconsistent or a lot of this people would pay for this.
[41:17] Rob: Got it. And here’s the big question and I know the answer is it depends. But I’m wondering do you mention price?
[41:26] Robert: You may or may not mention price in your initial call. Sometimes I used calls especially with local people in the early stages is a way to setup a face to face but you definitely mentioned price at some point in the process. It’s got to be part of you deciding if this is a viable business or not. Cause it doesn’t matter if you have something for electrical contractors that all of them want to buy but all of them want to buy it for $9 a month and you need to be $50 a month then you still have nothing.
[41:56] Rob: Right. All right well, you know, Robert I appreciate you coming on the show. Your eBook which is at coldcallingbook.net is I know it has other stuff. It talks about writing script, the importance of taking note, dealing with gatekeepers and I think you have an appendix for sample notes that you took and sample scripts and all that stuff. If someone was interested in finding out more and going deeper into this topic they can go to coldcallingbook.net. But if they want to catch up with you I know you have a blog or you talk about this kind of stuff as well as process to getting your own startup off the ground. Where would they find you?
[42:28] Robert: The best place is whitetailsoftware.com, that’s the blog.
[42:32] Rob: Very cool. Well thanks again for coming in the show and we’ll see you at Microconf 2013.
[42:37] Robert: Thanks a lot guys.
[42:41] Rob: If you have a question or comment, you can call it in to our voicemail number at 888-801-9690 or as Mike would say 9960 cause Mike transposed the numbers last week, or you can e-mail us at firstname.lastname@example.org. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll also find a transcript of each episode. Thanks for listening. We’ll see you next time.
[43:10] Mike: You know it’s not funny when you have to explain the joke.