This is from a fascinating study I found online conducted by Baylor University in conjunction with Keller Williams. The agents are Real Estate Agents:
Over the course of a two-week period in November 2011, 50 participating agents made 6,264 phone-based cold calls, collectively. Of the 6,264 cold calls placed, 28% were answered, 55% were not answered, and 17% were non-working numbers.
While 6,264 calls were placed over the seven-day period, 72% were very quick calls due to nonanswers and non-working phone numbers. Accounting for non-answers and non-working numbers becomes the tedious part of working true cold calling lists. However, the 28% of calls that were completed (1,774) were productive calls.
Out of the 1,774 calls that were answered, agents were able to set a total of 19 appointments with prospective clients, and 11 referrals were received. Agents were asked to call back at a later time by 132 prospective clients, and 1,612 of the callees were not interested in the offering or refused additional information.
What Is My Potential ROI? A Baseline for Comparison
Realistically, the average agent will not be willing to make 6,264 cold calls to achieve outcomes similar to this study. So, the question becomes, “What must I do to achieve a positive return from my cold calling efforts?”
If we assume that the goal of cold calling is to either set an appointment or receive a referral, then the data help to tell a story of what Return on Investment (ROI) agents might realistically expect to achieve from cold calling.
The study reveals that for every 330 calls made, approximately one appointment was set (a 330:1 call-to-appointment ratio). More relevant to our desired cold calling goal, for every 209 calls made, one appointment was set or referral was received (a 209:1 call-to-appointment-or-referral ratio).
If we consider that the study indicated 72% of calls made were bad (non-answers or nonworking numbers), then approximately 150 of every 209 calls will be bad.
Assuming that placing a bad call takes about 1 minute per call (on average), then 150 minutes (or 2.5 hours) will be spent handling bad calls. Consider also that the study indicated 28% of calls made were answered.
Consequently, 59 of every 209 calls will be answered. If we assume that an answered call takes approximately 5 minutes to complete (on average), then 5 hours will be spent handling answered calls.
Collectively, we see that it will take an investment of approximately 7.5 hours to complete 209 calls, leading to a return of one appointment or referral. If calls are broken-out across one workweek, agents can expect to make 1.5 hours worth of calls each day for 5 days to secure one appointment or receive one referral – a positive cold calling outcome. 7.5 hours invested to achieve 1 qualified appointment or referral is a relatively strong ROI.
