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Hot or cold sales - what is the difference?

A short definition: If you make a "cold call" you don't know the other person and probably he or she has never heard of you before. In opposite "hot" or "warm" contacts are already customers or at least have been in touch with you before, for example on a trade show, in former projects or during a sales pitch.

Warm contacts are more valuable, because you don't have to introduce your business anymore and explain what you are doing and why. Maybe you already built a good reputation and so don't need to persuade your potential client with your skills. Short: you have "a foot in the door".

Now maintaining contacts and a continuous relationship management becomes very important. This can be done by a phone call once in a while, a newsletter and a nice christmas card. Sometimes it is necessary to remind people you and your company exist, so that they think of you first if they need your service.

When doing sales it is more likely, that you sell your product to a "warm" contact, than if you're trying to acquire new clients. This means your lead management becomes way more efficient, if you keep your established customers happy, than to start over and over again. I wouldn't count on specific numbers, but sales literature names a multiplier between 5 and 10, so if you need to call 20 of your existing clients for one sale, you would need to make a 100 or 200 cold calls for the same result.

As important it is to send more general things like a christmas card, your relationship management works even better, if you do it individually and make it more personal. This works fine with only a bunch of clients that you all know in person. But if your business grows, you need the right tools for to stay on top of all details. For managing customers, this would be a customer relationship management software (CRM-system). It helps you organizing all the contact details of your clients as well as notes, e-mails and tasks, so you can keep track which lead you called already, what you have talked about and when is the best time to make a new attempt. That way warm clients never become cold again.

This article is part of a series that covers the basics of sales. Here you find some other articles of the same series:

Sven Sester