The National Technology Readiness Survey: Technology Readiness and Key Trends

1. The National Technology Readiness Survey:Technology Readiness and Key Trends Charles L. Colby President Rockbridge Associates, Inc. 703-757-5213 – ccolby@rockresearch.com

2. Major Points… • Expect an e-Service Revolution (“You ain’t seen nothing yet!”) • Major barriers to e-Service are confidence, affordability and training • Despite barriers, Internet and e-Service usage is pervasive and growing

3. Our Research Program • National Technology Readiness Survey • Authored by Parasuraman and Rockbridge • Replicated in 1999, 2000 and 2001 • Nationally representative telephone survey • Sponsored by the University of Maryland Center for e-Service • Other efforts in Austria, Sweden and Singapore

4. The Book • Techno-Ready Marketing: How and Why Your Customers Adopt Technology (Parasuraman & Colby: Free Press, April 2001)

5. 5 years of Research What are we learning about the consumer behavior of technology adoption?

6. What is Technology Readiness? (TR) • TR refers to people’s propensity to embrace and use new technologies for accomplishing goals in home life and at work • TR reflects an overall state-of-mind; it is not a measure of competence • TR is determined by optimism, innovative tendencies, insecurity and discomfort

7. Technology not for ordinary people • Distrust tech support • Want the basic model • Technology fails at worst time • E-commerce not safe • Need confirmation that technology works • Prefer talking to a person • Technology gives control • Technology more convenient • Want most advanced technology • Computers expand hours of business • Want to tailor technology • Thought leader • First to acquire new technology • Keep up with developments • Like high-tech gadgets 100 LO TR HI TR 92 107 Technology Readiness Index:Distribution

8. Contributors Inhibitors Drivers of Technology Readiness Innovativeness Optimism Technology Readiness Discomfort Insecurity

9. TR Dimensions • Optimism: Positive view of technology; belief that it offers increased control, flexibility and efficiency • Innovativeness:Tendency to be a technology pioneer and thought leader • Discomfort:Perceived lack of control over technology and a feeling of being overwhelmed by it • Insecurity:Distrust of technology and skepticism about it working properly

10. Technology Segmentation

11. Characteristics of Technology Segments Optimism Innovative- Dis- Insecur- ness comfort ity Explorers High High Low Low Pioneers High High High High Skeptics Low Low Low Low Paranoids High Low High High Laggards Low Low High High

12. Acquiring Customers Technology Evangelism Future-Ready Design Proving Benefits Retaining Customers Customer-focused Design Responsive Customer Support Reassuring Communication Implications for Marketing e-Service… …from Techno-Ready Marketing

13. 2001 NTRS What are we learning about the e-Service marketplace?

14. In the 2000s, e-Service will grow, powered by the user Company 1990s Technology 2000s Employees Customers

15. Technologies Instant Internet Access Customization Broadband Home networks Wireless networks Firewalls E-Wallets Home Videoconferencing Voice over Internet Benefits Convenience Speed Security Time savings Enabling users to access e-service in their homes Important Technologies

16. Examples of Corporate Initiatives • Credit Card Company allows its customers to service accounts online • Brewery creates an online game to build loyalty among young males • Oil company provides an online coupon program for card members • Student loan provider markets new products through an exclusive online customer website • Mortgage company originates loans online • Long distance company signs up new customers on the web • Network marketing goes online, creating an leading e-commerce business

17. Hold Everything! Didn’t the Internet crash and burn with the dot.coms?

18. Continued Growth • NTRS shows consistent growth in the past three waves • Penetration is projected to hit 90% by 2006

19. E-Service Keeps Growing

20. Shifting Paradigms Make way for .gov, .org, .edu • E-Service usage among those online (2001): • 61% researched health information • 60% purchased goods and services online • 55% visited a government web-site • 38% checked bank account info • 37% visited a “.org” website • 21% did business with a government • 20% moved funds across accounts online • 11% took a course online • 10% bought or sold securities

21. Insecurity and Discomfort are Significant Barriers to Adoption “Do not consider it safe giving out a credit card number over a computer” “Technology systems not designed for use by ordinary people” “Do not consider it safe to do any kind of financial business online” 990001 77% 73% 69% 67% 65% 61% 58% 59% 56%

22. The Technology Divide 72% of adults have a computer at home

23. A Socio-economic Link

24. Reasons for the Divide • Lower TR consumers are less secure and less confident about technology • Most of those who do not own computers would accept one if offered to them for no cost • Affordability is a major obstacle • Most “have nots” feel they need training to use computers

25. Critical Mass Do barriers really stop people from taking advantage of interactive technology? 58% have home internet access 21% can get access elsewhere

26. The Internet is a Pervasive Medium 79% of adults get online somewhere, although 10% go somewhere besides home or work. Where do they go? Friend or relatives house – 70% Public library – 41% College campus – 26% School – 14% Portable device – 13% Government office – 9% Cyber café – 6%

27. Conclusions • We should be prepared for a boom in e-services • We should expect that nearly all consumers will benefit from and use e-services • For all consumers, we need to find ways to make technology easier to use, safer and more reassuring • For “have nots,” we need to address issues of affordability and training • We should not underestimate the drive to use technology when it becomes essential