Dialing for Dollars

When the heat is on, it's time to go cold-calling

By Kevin Kelly

Last winter, as part of a broader effort to increase sales, I started cold-calling prospects. "Hi, my name is Kevin Kelly," I usually start out. "I own a company called Emerald Packaging. We manufacture plastic bags. I know you buy quite a few, and I'm hoping to get a bit of your time to find out how we can help you." Usually they half-listen, interrupt with a snarl, and hang up. Occasionally I get a bite.

I hate cold-calling. In fact, I despise cold-calling. But dial I must, for ringing up strangers is part of a sweeping change in the way we approach sales. Besides, it works.

Traditionally, our family business relied on brokers and distributors for sales, and narrowly focused its product line on packaging for produce. That strategy proved effective because the brokers can provide expertise the customer desperately needs (and we lack), such as knowledge of machinery and food science. So, while the folks who make a living at it did the prospecting, we concentrated on manufacturing--and saved over $100,000 a year on salespeople, to boot.

In recent months, however, my brother Jim and I have begun to hit the streets, especially where we're trying to push into new markets. Why? Sometimes we don't know a broker or distributor in a market, or they're already wedded to a bag supplier. Often, though, we find that to grab a new customer we have to compete on price, and there just isn't room these days for the 5% cut that a broker or distributor demands. Likewise, cost-conscious purchasing agents are looking to eliminate middlemen wherever they can.

There's another financial pressure, too. Like many entrepreneurs, we invested heavily in capital equipment in the late 1990s, spending close to $5 million on new printing presses and bag machines. Now it's time for that technology to pay for itself. Many of the new markets we're going after, such as frozen-food packaging and newspaper bags with glossy ads on them, take advantage of the quality our machines can deliver. Since we don't know brokers or distributors who are willing to help us out in either segment, we have to make the calls ourselves.

Certainly, we couldn't have picked a worse time to ramp up a sales campaign. Even before September 11, the slowing economy had slashed the number of companies looking to buy packaging. In the aftermath of the attacks, many potential customers seem so spooked about the future that they're content just to work down inventories. And product introductions--the vehicle many companies use to try out new packaging suppliers--have just dried up.

Still, we've had our share of successes. Last fall, I saw a frozen-food item in the grocery store that required photographic print quality--a perfect fit for our new printing press. It turned out that the prospect was a local business as well, only three miles from our factory. They expressed some interest when I called, and then we got really lucky: One of their existing print suppliers went out of business. They had a high-quality job that required a fast turnaround, and we stepped into the breach.

As happy as I am with the outcome, I view the cold calls as a short-term measure. I'm doing it because we don't have the internal resources to go after new sales any other way. And if I'm going to ask my brother, sister, and our sole internal salesperson to take on this unpleasant task, I have to lead by example and share the pain. Believe me, it wasn't for kicks that I recently listened to a purchasing agent growl that I'd be "wasting the postage" if I sent some promotional materials his way. But with the economy slowing, bills coming due, and expensive equipment in place that we can't afford to let sit idle, we really have no choice.

Have you tried selling, too? E-mail us at smallbiz@businessweek.com

Kelly is an officer of Emerald Packaging Inc. in Union City, Calif.

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