Making cold calls will typically plays some sort of role in an organization’s sales strategy. With that being the case, it can be a productive exercise to look at what the true cost of that activity is. The following blog drives to an estimated cost per cold call by dissecting the cost per employee per hour and then works toward the actual cost per cold calls.
The majority of cost for any employee is the base compensation and benefits. For this exercise, we will use a base salary of $50,000 per year. We have used $20,000 per year as the total benefits as on average between 20% to 30% of an employees total compensation is comprised of benefit costs. When we divide those annual figures by 52 weeks, and then by 40 hours per work week, we arrive at $33.65 per hour for total compensation for this sales employee.
The next largest expense when making cold calls is overhead. This includes office space, power, IT support, hardware and software systems, insurance, administrative staff, phone, internet, etc. Building out conservative assumptions in each of these areas, we arrived at total weekly cost of $320 per sales employee and when we divide that by 40 hours per week, we arrive at $8.00 per hour for overhead.
The next cost to factor for making cold calls is training. For this analysis, we have used a figure of $2,000 for annual training cost, which is very conservative when you factor in all of the costs associated with delivering training. When we divide the annual number of $2,000 by 52 weeks and then 40 hours per week, we arrive at right below $1 per hour for training per sales employee.
A cost that could easily get over looked when analyzing the cost of making cold calls is that cost for the managers that are managing the sales staff. For this analysis, we uplifted the employee’s compensations by 25% to arrive at a manager compensation per hour and then assumed that the manager is responsible for ten cold callers. By dividing the hourly cost of the manager by 10, we arrive at a cost of $4.21 per hour for the management of the cold caller.
Total Cost per Cold Call
When we sum up all the cost outlined, we arrive at a total cost per hour for this sales person to be $46.80. If we then assume that this individual will make 10 cold calls per hour, we arrive at a cost of $4.68 per cold call.