Cold calling defined - cold calling is using a telephone to prospect for new clients. Often, a salesperson will call random businesses (B2B) or residences (B2C) out of a phone book or it may be more systematic where they call on phone numbers in a certain list of targeted prospects. Whichever way they do it, it is a form of marketing by telephone where the cold caller attempts to secure new appointments and new business by phone.

The word cold in cold calling denotes that it is an impersonal phone call. The recipient of the cold call doesn't expect the call. Further, many don't like receiving such phone calls as it is a form of interruption marketing. If you call a freind or a business contact that you already have a relationship with, it is not a cold call - there is an established relationship and trust factor

Despite negative perceptions, many sales managers still advocate cold calling as an effective way to generate new leads and, hence, new business. They argue that it is an inexpensive marketing strategy and a numbers game. That is, call as many prospects as possible and eventually you will find some that are responsive to your marketing message.

Alternatively, others argue that cold calling is inefficient and, therefore, a waste of time. Not only that, but people hate receiving cold calls and there is a lot of rejection. They argue that cold calling has a very low success ratio that your prospecting time could be better spent doing other, better activities.

A relatively recent development that affects people that cold call are "do not call lists." In The United States, The FTC has created a "Do Not Call Registry" where telemarketers are not permitted to call residences that have signed on to the list. This creates a duty for telemarketing firms to have up-to-date lists. Also The Telephone Consumer Protection Act in The U.S. makes it mandatory for any automated phone call (autodialers) to state the identity of the business making the call up front and cannot tie up more than one line of a multi-line business at the same time.

Cold calling may be popular amongst some salespeople but they must also understand any possible legal ramifications.