I run a new productized service. Initially, I was focused on sales and cold emailing customer prospects, but it totally failed. I've emailed over 400 prospects with different approaches, using well-tested templates and even custom tailored uber-personalized emails. Not a single cold prospect has converted.
The other week I spoke to a guy who runs a similar business model. His main acquisition channel is cold email and is working well for him. When I told him I sent 400 emails and didn't convert a single user, he was like: "Buddy, we had to send 4000 emails to convert 20 customers." That is 0.5% conversion rate. He also mentioned that's the industry standard.
Now, in my books 0.5% conversion rate is rather horrible for all type of acquisition channels. But you can't argue with the fact his business has more customers than ours ATM due to that tactic.
So two questions here:
1. Is cold emailing a game of numbers, and is really volume crucial?
2. Do you have any stats or benchmarks from personal experience what is the average conversion rate for cold emailing? I know this depends heavily on the type of business, and price points, so let's say we're talking about a service around the $100-400 price range.
Cold emailing is just as bad for you and the recipient. Even if you have the perfect list, the attempt to sell in a cold email is rarely going to be effective. You're better off curating the list to the top prospects, find a mutual connection on LinkedIn or even just cold-invite them on LinkedIn,. Worst case scenario, send a 'permission pass' email where you simply gauge interest and let them know you won't be emailing them again if there's no interest. Keep it very short, non-commercial with just solid information/links to web, and an easy to reply yes/no answer.
Cold emailing can be productive. It works in a number of ways for sales, marketing, joint ventures, pr and more. Just don't expect it to close any deals immediately from it.
The critical points to improve your emails:
1. Who you are targeting - your ideal client (title, firm, revenue size, location, etc.) the more time you spend getting this right the better performance.
2. The volume - how many people are in your sweet spot.
3. The cadence - how often you keep contacting them. Don't expect 1 email to do much. 3-4 follow up emails is ideal.
4. The messaging - If it is all about you than you should look at writing emails about them and their needs first.
I have seen cold emails average 10% response rate - people saying yes, no or go to hell. Up to 40% for great messaging, spot on contacts and the right cadence.
As for "conversion" there are many factors that will impact you. If your product is brand new with no social proof than your responses will be much lower than an established firm.
Best of luck.
Yes, it's definitely a numbers game.
It's also an attempt to take a shortcut, and those usually don't work very well. The fact that your buddy has luck with it can be down to all kinds of things, hard to say why it works for him and not for you.
But here's what I would do, IF I'd try cold emailing:
Use it as a way to start a conversation, not as an attempt to get a sale. I'd never ever buy something from someone who tries to sell me something before he even asks me if I'm interested.
Because if he doesn't ask about MY interest, the logical conclusion is that the sale is only in HIS interest, and then the door closes. In other words: cold emailing with an offer is an instant and massive trust-breaker.
Imagine you meet a nice girl... do you walk up to her and tell her to kiss you? Of course not. You'd get kicked in the face. But if you have a chat, hang out with her, go to the movies, spend time and have fun... it might just turn out she digs you. Customer relationships are no different.
So focus on opening a conversation and building the relationship.