If you had to name the one quality or skill for good lead generation that you’ll need in the next few years, how would you choose from the following list?A) good networking, B) persistence, C) resourcefulness, or D) high-tech knowledge and abilities.

That would be a tough assignment because, well, they’re all important. But the most critical will be D) high-tech knowledge and abilities.

Surprised? In fact, for those who are technologically challenged, the not-so-distant future in lead management can be summed up in one word: bleak. “The future of lead management will depend on sales managers and executives who are as technically savvy as today’s chief information officers (CIO’s),” says James Canton, president of the Institute for Global Futures in San Francisco.

Canton, a member of MIT’s Media Lab Europe and an advisor to the National Science and Technology Council, says pure scale will be one powerful pressure for upgrading technical skills. “There will be such new tools as the next-generation Internet, applications for prospecting, and direct marketing and delivery of offers for new products via electronic markets,” he points out. “These will create more leads than even the best sales teams can personally deal with.”

Fundamentally, the ever-widening information highway will enable these changes. “The next-generation Internet will be faster, more robust and more intelligent,” says Canton. “The plumbing will get much better. So the sales manager of the future must integrate data mining and warehousing with use of the Internet for direct marketing by streaming video. Sales, marketing and technology will fuse to generate leads and translate them into customers.”

This next-generation lead management is not too far off, according to Canton. “By about 2005 a sales manager will have access to around 1 billion people and companies in 200 countries on the Internet.” Then, how in the world will you deal with that many leads?

Along Comes a Spider

Suppose you want to identify a critical mass of 1,000 new industrial customers for your newest product. Traditionally, companies looking for new leads could purchase lists, gather referrals, go to trade shows and so forth. By 2005, says Canton, there will be a much better, faster way.

A new tool, which Canton calls a “spider,” will conduct an intelligent search of the Internet to find, qualify and obtain suitable contact information on new leads. “A spider is a search engine, like Yahoo or Google, but with embedded intelligence,” he notes. “You will tell it, ‘Find me the best 20,000 leads for this product, and then report back.’”

The next step is a quick walk down the corridor to the marketing department. “You should already have told marketing that you are going to need a 30-second video to send your pitch electronically to the 20,000 leads the spider finds,” Canton points out.

Now technology really begins to pay off. Direct mail traditionally yields returns of 1 to 3 percent. Video email sent to a thoroughly qualified prospect list, according to Canton, can generate much higher returns – up to 70 percent in some cases. “But let’s assume you send out 20,000 videos and get back 3,000 indications of interest. Now you can go to your customer relationship management system (CRM) for an agenting technology.”

Excuse me? Agenting technology? In four years or so, Canton explains, there will be something he calls a “sales avatar.” Basically, this will be a highly sophisticated component of your Website that can quickly and correctly answer a variety of questions – the top 50 FAQ’s interested prospects may have about your new product, for example. The 3,000 interested prospects are directed to the sales avatar for an easy way to find out more about the product and how it might fit into their business. They also are given the option of contacting a live sales rep directly, instead of the avatar or after they have exhausted the avatar’s knowledge. “That’s what you use your live sales force for,” Canton emphasizes.

Spiders and avatars, well integrated with robust basic processes, could transform more than the selling function itself. Exploited to their full potential, they can transform entire companies. “Say top management is thinking about building a new product,” Canton explains. “But before they build the product or license the rights, they want to know whether there are customers willing and committed to buy it. They turn to sales managers to see if they can presell the product to enough customers to justify production.” And tech-savvy sales managers turn to their spider and avatar to check out the market. Interested customers are given attractive discounts or other terms for an early commitment. “Say they commit by May 15. Then you know you have the critical mass of leads and the digital cash will show up so that you have the money to finish production.”

Suddenly, lead management is becoming a little more like company management.

Get Ready

Although they may appear to be too good to be true, spiders and avatars are not science fiction. Some of these more powerful tools are being put in place today. Companies that have shied away from data mining and warehousing soon will be able to outsource these sophisticated technical capabilities at reasonable costs. The Internet is not only rapidly expanding, especially outside the United States, but is also getting much faster. And don’t forget that the wireless Internet is coming, too. “We are very close to having prototype spiders and avatars,” Canton says.

The most difficult aspect in the near future will be, of course, preparing people and bringing them up to speed. So how exactly do sales managers become CIO’s? Fortunately, they will not have to learn Java programming to do their jobs. Canton says that, luckily, many of the technical dilemmas that today’s CIO’s have to deal with will largely be resolved. “In two years, even the CIO’s job will be much easier, or at least higher level. Right now, they are dealing with chaos and confusion. That will soon be history.”

Most important, sales executives will really have to know how to use the new technologies to sell. That means knowing the capabilities of new tools and what to expect down the line. It also means being able to fit tools into sales strategies – requiring at least enough knowledge of technical jargon to talk to the experts.

How will busy reps and sales managers get ready for this acceleration in high tech? Canton thinks there are plenty of ways to understand what you need to know without taking too much time. “If you want to take a course in technology, there are online courses you can do at home over the weekend,” he notes. “There are books and periodical articles. You can hit the high-tech trade shows and question the vendors about their equipment. Ask them what their tools can do for selling and what’s coming up next. I learn a huge amount from talking with IT vendors.”

Sometimes, the answers may be right down the corridor. “You probably have people in your company who live and breathe this stuff,” Canton says. “You know, the ones with the purple hair and nose rings. Talk to them.”

Indeed, getting up to Internet speed for those next-generation leads should be no tougher than the challenges that effective sales forces met throughout the 1990s. “Reps had to learn how to use such sales force automation tools as ACT and GoldMine,” Canton notes. “They have learned to use email and cell phones. In a few years, that stuff will be like the Middle Ages.” Ready or not, the advanced technology is coming very quickly. “It will become standard long before the first baby boomers retire,” Canton emphasizes. “It’s coming and it’s doable.”

However, this is the midterm picture managers need to start thinking about now. Short-term, there are still issues to resolve.

Until Then…

Sales managers and reps don’t have spiders and avatars yet. So, in the meantime they have to deal with the current sales environment, including the weaker economy. Slow markets make companies cautious about spending. And they make financial officers much more aggressive in demanding quantifiable results. Jay Chang, president of King of Prussia, Pennsylvania-based Structured Chaos, which designs IT solutions for CRM, sees both of these trends in his markets. “The economic slowdown means the sales cycle is getting longer because many solutions are quite expensive,” he says. “They are much harder to justify without return on investment numbers.”

Chang’s customers demand much tighter presentations of a product’s value proposition. Reps take more time to gather leads, to qualify them, to target prospects and to research prospects before trying to sell. “For example, it’s not enough just to say everybody is doing CRM. You have to prove to them how it will fit into their business.”

Chang says the first wave of Internet lead generation also generated some important lessons. “Technology means everyone is getting many more leads from more places. Some are good, but others are bad, generated unintentionally.” That often means problems for the rest of the lead management process.

Easy access to too many leads, for example, is not always a good thing. “Technology makes it very easy to generate and track leads,” Chang says. “But that can make the reps’ job much harder if they have to follow up leads that lead nowhere.”

The Internet, with company Websites and virtual products available to anyone with a computer and a modem, can capture many leads. Consequently, in order to have a better understanding of the people who access their Websites, Chang notes that many companies’ Websites now require all visitors to register, so they’ll get a follow-up call even if all they wanted was some basic material. That can be a big negative for some people. “Why make it difficult for them if all they want is information?” Chang asks. “And it can be rather annoying if a visitor must give up personal information.”

Potential customers who search for and download product information from your Website should be treated very carefully, Chang warns. He advises Web designers to let visitors indicate whether and how they want to be contacted. “When visitors get to the download page, give them an option to indicate if they want to be called. Try not to require too much information at first. You can always get more when you call them. And try to make the whole process as unobtrusive as possible.

“These people have to be very interested and motivated to get the information. If they are still interested after they review the material, they will surely call you.”

Websites’ basic organization also will determine the quality of leads they generate. Chang’s company has been working on Websites that are organized not by product type, but by the type of need or problem a buyer might have. “We develop logic to qualify buyers and to gently guide them according to the business problems they need to solve. For example, does the visitor have a problem collecting receivables or managing supply chains?”

Websites organized around customer needs, or “points of pain,” can work much better than product-oriented sites, Chang believes. “First, you are letting customers define their own needs,” he says. “Second, you appear not to be selling, but rather understanding the customers’ business. And third, you can generate real leads along with lots of useful information about the customers.”

Traditionally, experienced reps have gathered this sort of intimate customer knowledge by making personal contacts with top execs at the buying firms. Although the goal is very ambitious, Chang thinks well-designed IT systems can capture the same detailed portrait of customers more efficiently. Furthermore, all the information will be retained in the selling company’s own databases, rather than in the memories and on the file cards of individual reps.

Chang also sees major challenges in lead management under partnership relationship management (PRM) programs. Major companies that partner with each other for some markets must work out rapid and exact procedures for assigning leads to the right partner. “Companies must be very careful about which partner gets their leads and then make sure they deliver on promises,” Chang notes. “There can be lots of breakdowns on this PRM side, just as in CRM. When you are selling a complex product, you often must refer a lead to your partner. And you must already have set up your PRM system for managing these leads right.”

Although he is a confident techie, Chang does not think live reps are going away anytime soon. Right now, it is mostly high-volume, low-value sales that benefit from automated lead-management systems, he says. At the same time, in high-value sales, technology will only play the role that the best reps want it to. “Many reps don’t want a lot of automation, because they think the tools just get in the way,” Chang admits. And sometimes, they may even be right. “Often, the top reps just need a list of names and a good product to sell. And all they want from their managers is to know what their bonus is.”

Even with highly automated systems, customers who want to talk with a rep will usually find one. “So the rep winds up talking to the people who want to be talked to,” Chang observes. And that is not a bad thing at all. “Some reps like to go through the qualifying process personally, because they build relationships as they are learning about the market. You never know who is going to buy your product tomorrow, perhaps at a lower price or under different circumstances, even if they don’t buy it today.”