2. Charles Colby Clare Thibodeaux Rockbridge Associates, Inc.
Ready or Not? What Consumers Really Think about Technology
10130 G Colvin Run Road
Great Falls, Virginia

3. Introduction
Rockbridge is a market research firm that studies technology issues
This presentation is about basic research on consumer beliefs about technology

4. Agenda What is Technology Readiness? NTRS Background & Purpose
NTRS Methodology
Consumer Beliefs about Technology
Technology Readiness Index
Technology Consumer Typology
Techno-Ready Marketing Implications

5. In 1996, Parasuraman proposed a
PYRAMID MODEL
Company
Technology
Employees
Customers

6. What is Technology Readiness?
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
It classifies people along a spectrum or as a “segment” in a technology adoption process

7. What’s Your TRQ?

8. Instructions 1) Add a+c+e+g+i+k 2) Add b+d+f+h+j+l
3) Subtract 2 from 1
(a+c+e+g+i+k) - (b+d+f+h+j+l)
Should equal -20 to +20

10. National Norms for TRQ Quiz
4 79%
3 75%
2 70%
1 65%
0 59%
-1 51%
-2 44%
-3 38%
-4 34%
-5 28%
-6 24%
-7 21%
-8 19%
-9 14%
-10 11%
-11 9%
-12 7%
-13 5%
-14 5%
-15 3%
-16 2%
-17 1%
15 99%
14 98%
13 97%
12 97%
11 95%
10 94%
9 93%
8 91%
7 88%
6 86%
5 83%

11. What does it mean? 11+ (95%) -- Cyber-enhanced being
8 (91%) -- Need a second mortgage for all the toys you bought this year
3 (75%) -- can program a VCR
-1 (51%) -- own a VCR, can’t program it
-6 (24%) -- own and use a record player (it’s not a hobby, either!)
-11 (9%) -- never heard of the Internet
-14 (5%) -- live in a shack in rural Montana where you write anti-technology tracts

12. National Technology Readiness Survey (NTRS)
A comprehensive study of consumer and employee beliefs about technology developed jointly by Rockbridge and Professor A. Parasuraman, University of Miami
Used to produce the Technology Readiness Index, an action-oriented tool for assessing tech beliefs
The TR Index is used by companies and academia in studying technology adoption

13. NTRS and associated research is subject of an upcoming book...
Techno-Ready Marketing:
Competing through Innovation
By A. Parasuraman & Charles Colby
Free Press, New York

14. Other Topics of NTRS The consumer & the employee technology vision
Usage of technology-based products and services
The impact of the Internet on behavior
Cellular phone usage
Desired methods of tech support
Linkage of technology beliefs to demographics and attitudes about life

15. NTRS Methodology Fielded December 1998 - January 1999
Administered via computer-assisted telephone interviewing
Involved a sample of 1,000 U.S. adults chosen through RDD

16. NTRS Sample Sample representative of U.S. population:
Gender quotas (52% Female/48% Male)
Weighted by education and gender
Sample also weighted by number of phone lines per household
Accounting for higher probability of selection in a RDD sample

17. Consumer Beliefs About Technology
NTRS identified four TR dimensions:
Optimism
Innovativeness
Discomfort
Insecurity
CONTRIBUTORS
INHIBITORS

18. Dimension #1 --Optimism
Dimensions of Technology
Readiness...
Dimension #1 --Optimism
Belief in the benefits of technology
Technology gives more control over lives
Newest technology more convenient
Computers extend hours of commerce
Easier to deal with computers than people
Technology increases efficiency

19. Examples of Optimism...
“Technology gives people more control over their daily lives”
58% Agree
“Products with newest technologies easier to use”
66% Agree
“Technology gives you more freedom of mobility”
74% Agree

20. Dimension #2: Innovativeness
Dimensions of Technology
Readiness...
Dimension #2: Innovativeness
Tendency to be a pioneer and influencer
Thought leader
Early adopter
Self learner
Student of technology

21. Examples of Innovativeness...
“Other people come to you for advice on new technologies”
36% Agree
“Enjoy the challenge of figuring out high-tech gadgets”
63% Agree
“You can usually figure out new hi-tech products and services without help”
50% Agree

22. Dimension #3 -- Discomfort Level
Dimensions of Technology
Readiness...
Dimension #3 -- Discomfort Level
Feeling of control (or lack thereof) over technology
Feelings of technology being too complicated
Degree of trust in tech support
Feeling of being overwhelmed
Belief that technology not for ordinary folk

23. Examples of Discomfort with Technology...
“You get overwhelmed with how much you need to know to use the latest technology”
61% Agree
“New technology often too complicated to be useful”
45% Agree
“Hassles of getting new technology to work ... makes it not worthwhile”
34% Agree

24. Dimension #4 -- Insecurity
Dimensions of Technology
Readiness...
Dimension #4 -- Insecurity
Lack of confidence in security/Need for assurance
Leery about doing business on-line
Wants written confirmation of on-line transactions
Fears information being intercepted
Need to check automation
Believe technology can invade privacy

25. Examples of Insecurity with Technology...
“Whenever something gets automated, you need to check carefully…[for] mistakes”
82% Agree
“Technology always seems to fail at the worst possible time”
62% Agree
“You do not consider it safe to do any kind of business on-line”
58% Agree

26. Evaluation of Hi-Tech Products
A Framework Based on Research to Date
Antecedents of TR
Psychographics
Demographics
TR -- Drivers:
Optimism
Innovativeness
TR -- Inhibitors:
Discomfort
Insecurity
Adoption of Hi-Tech Products
Interest/Intention-to-Use
Actual Use
Evaluation of Hi-Tech Products

27. Technology Readiness Index: Distribution
LO TR HI TR
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 92
107

28. Characteristics of High TR…
Psychographics: High TR consumers…
live more fast-paced lives
keep up more with fashion
are more success-oriented
like to try new things
are more cerebral
like to explore
like toys and gadgets

29. Characteristics of High TR...
Demographics: High TR Consumers…
more male
younger
more likely to work in technology field
have higher education levels
earn more money

30. Typology of Technology Consumers

31. 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

32. Pace of Technology Adoption
Time period in which each technology segment achieved 10% penetration of home Internet/ online service access
Skeptics
Laggards
Explorers
Pioneers
Paranoids
7/95
10/96
5/97
1/98
9/98

33. Managerial Implications of Technology Readiness

34. Areas where the TR scale has been applied
Mortgage bankers
Realtors
Online service users
College Employees
Long distance
PC purchasers
Leisure and business travelers
Youth
Credit card holders
Teachers
Meeting planners
Electric power consumers
Business software purchasers
E-commerce
TV Viewers

35. Principles of Successful Techno-Ready Marketing
1. Consumer Behavior is distinct for a
Techno-Driven Product
2. Marketing practices should be
different when technology is involved
3. Service and support should be
different when technology is involved
4. In a technology market, it is
possible that “winner takes all”

36. Techno-Ready Marketing Strategies
Acquiring Customers
Future Ready Design
Technology Evangelism
Proving Benefits
Satisfying Customers
Customer-focused Design
Responsive Technical Support
Reassuring Messages

37. Acquiring Customers: Future Ready Design
Marketers should study the high-TR consumer to discern emerging trends in technology usage
They are the first to engage in new behaviors such as e-commerce
High-TR consumers can provide clues on making technology-based services “future ready”

38. Internet Incidence

39. Internet Usage in Past Year
Among consumers with home Internet access

40. Online Purchases in Past Year

41. Acquiring Customers: Technology Evangelism
Consumers with innovative tendencies -- Explorers and Pioneers -- like to share their knowledge with others
Less techno-ready consumers rely on tech-savvy friends for advice
“Technology Evangelism” is a deliberate strategy to speed up the diffusion of knowledge through the use of official spokespersons

42. How Technology Evangelism works...
DISSEMINATING INFORMATION
COMPANY
EVANGELIST
TECHNOLOGY
OPINION
LEADERS
Hobbyists,
Enthusiasts,
Writers,
Engineers,
User Groups, etc.
CONSUMER
PUBLIC

43. Acquiring Customers: Proving Benefits
As a market matures, a major obstacle to adoption is a lack of conviction by consumers (the “skeptics”) that the technology offers concrete benefits
Marketers should identify the core benefits of the technology and develop a vivid and articulate communications strategy

44. Examples of Proving Benefits
Consumer Markets
Demonstrating how the technology changes lives/map features to benefits
Demonstrations -- e.g., “is it live or Memorex?”
Business Markets
Net Benefit Analysis -- dollar and cents breakdown of costs/revenues for old versus new technology

45. Long-Term Success in the Market Requires Removing Obstacles for Low- and Medium-TR Consumers
Customers who are less technology ready need more help and greater reassurance
Other research we have done shows that TR influences satisfaction
Marketers should focus on low to medium-TR consumers in ensuring “customer-focused” design and developing support functions

46. Satisfying Customers: Customer-Focused Design
Technology-based services should be designed for customers with the greatest problems using them
Highly techno-ready consumers like to tailor and program functionality to suit their needs; Low techno-ready consumers prefer to use the product the way it comes “off the shelf”
Intuitive design is critical
Technology-based products and services should be tested for usability among low-TR consumers

47. Satisfying Customers: Customer Service/ Tech Support
It is critical to address the unique needs of the low-TR consumer to ensure rapid adoption of a technology-based product
Companies often rely on “self-service” help approaches to save money, but those with the greatest need want a higher level of support
Low TR consumers appear to have a greater need to talk to a person and to own a detailed manual

48. Satisfying Customers/ Alleviate Insecurity about New Technology
It is critical to understand that consumers have a natural suspicion about the risk, security and safety of new technology
Develop messages and demonstrations that reassure consumers
Leverage your brand name
Offer warranties

49. For more information, go to…
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