www.rockresearch.com trends in e-services, beliefs about service technologies, and issues...
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Trends in e-Services, Beliefs about Service Technologies, and Issues
Researching the Category:The National Technology Readiness
Survey — 1999 - 2007
Charles L. Colby, PresidentGina Woodall, Vice PresidentRockbridge Associates, Inc.
For info, contact: Charles Colby703-757-5213 – [email protected]
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Discussion Points Today
NTRS Research ProgramOverview of Consumer Techno-ReadinessTR Segmentation (“Typology” Based on Latent Class Analysis)Trends in e-ServicesIssues in Research e-Services
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Our Research Program
National Technology Readiness Survey– Authored by Parasuraman and Rockbridge– Sponsored by the Center for Excellence in
Service, R.H. Smith School of Business, University of Maryland
– Replicated in 1999, 2000, 2001, 2002, 2004, 2005/6; 2007 in field now
– Nationally representative telephone survey through 2004
– Hybrid Web/Phone Survey starting in 2005/6
Other efforts in dozens of countries
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“Technology Readiness Index (TRI), a Multi-Item Scale to Measure Readiness to Embrace New Technologies,” A. Parasuraman, Journal of Service Research, Vol. 2, No. 4, 307-320 (2000)
Techno-Ready Marketing: How and Why Your Customers Adopt Technology (Parasuraman & Colby: Free Press, April 2001)
www.technoreadymarketing.com
Sources
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8 years of Research8 years of Research
What are we learning about What are we learning about the consumer behavior of the consumer behavior of
technology adoption?technology adoption?
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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
It describes the person, not the technology
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LO TR
HITR
• 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
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92 107
Technology Readiness Distribution
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Discomfort InsecurityInhibitors
Contributors InnovativenessOptimism
Technology Readiness
Drivers of Technology Readiness
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• 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
TR Dimensions
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The Technology Readiness Index (TRI):
A Multi-Item Measure
36 agreement scaled attributes4 sub-scales for measuring individual dimensions of TRMany studies use an abbreviated 10 item or 6 item indexThe scale is available to scholars without chargeNote: scale is called TechQual® in a commercial setting
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Technology Readiness Index:Distribution (Actual Data, 2005/6)
Kurtosis = -.164Skew = -.231
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The TRI is Highly Stable over Time
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1999 2000 2001 2002 2004 2005/6
Techno-Readiness was highly stable from 1999 to 2004TR does not change readily on an individual basis
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Why did TR Increase in 2005/6?
There is a high degree of stability over time – TR items appear to be firm beliefs rather than prevailing opinions that shift in response to market change– Over time, consumers have gained greater
confidence in online services and the internet, which make up some of the items in the index
– In 2005, it was necessary to switch to a combination web/phone methodology (discussed later), which had some impact
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Conclusions
The TRI continues to be a strong predictor and explanatory variable in tech adoption– Example: a recent study of 9 countries (U.S.,
Canada, China, India, Japan, Russia, Turkey, Brazil, Mexico)
In the future, we need to focus on more “tech neutral” questions, of which there are many in the scale
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A Technology Segmentation
Using a Typology to Describe Technology Consumer Behavior
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TR Segments
In Techno-Ready Marketing, Parasuraman & Colby identified 5 technology segments
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Explorers Pioneers Skeptics Paranoids Laggards
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Advantages of a Segmentation View (or Typology)
Recognizes that beliefs about technology do not follow a continuum– Example: “Pioneers” have a “love/ hate”
relationship with technologyA typology allows a differentiated marketing view:– Explorers: enlist help to identify innovations– Pioneers: provide hand-holding– Skeptics: convince them of benefits– Paranoids: reassure about safety– Laggards: sell them “last generation”
technology
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Segmentation Approach
The typology used in Techno-Ready Marketing was based on K-Means, a robust and easy to use clustering methodResearchers have since relied on methods with greater stability and theoretical underpinning, including Latent Class (LCA) and Q-FactoringWe recently validated the segments using LCA on a data set including multiple years of NTRS data*– Result: a 64% overlap between K-Means and LCA
segments– Qualitatively, a similar typology emerged
*This was done in support of a TR-related research project by Ann Massey and Mitzi Montoya-Weiss, Indiana University.
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LCA Segments (including deviation from means on 4 components)
Segment (original name per k-means)
%* TR In-dex**
Drivers (Positive) Inhibitors (Negative)
Opti-mism
Innov-ativeness
Dis-comfort
In-security
Skeptics 35% 107 -.07 -.15 -.28 -.35
Paranoids 20% 87 -.34 -.63 .59 .59
Explorers 18% 128 .64 1.11 -.68 -.72
Pioneers 17% 106 .54 .56 .35 .56
Laggards 10% 76 -1.33 -1.40 .48 .45
*Unweighted data. **100 = Average per 1999 baseline.
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NTRS: 1999 – 2006
What are we learning about the e-Service marketplace?
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83757072
56 62
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5058 62 66
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0
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100
1999 2000 2001 2002 2004 2006
Home Computers
Home Internet
Work Internet
NTRS shows consistent growth in Internet access at home, while exposure at work has not changed over 7 years
83% of consumers have access to the Internet somewhere (33% access it outside of work or home)
NTRS also tracks home networks, broadband, and internet identity
Connectivity Trends in the U.S.
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E-Commerce is Growing
Online Activities (12 month period, based on population with home or work internet
access)
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2531
21
50
344138
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4350
20
4747
73
44
0
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40
60
80
Bought Items <$10
Items between$10 and $100
Items > $100 Booked Travel
2000
2002
2004
2006
Consumers are moving forward cautiously in buying online, so e-commerce is now commonplace
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There is continued growth in online banking Online billpaying is another rapidly growing area Consumers are moving beyond their banks, going
directly to billers sites
e-Finance is a Booming Category
Online Activities (12 month period, based on population with home or work internet
access)
11 9
40
22 25
51
27 27 30 31
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26
494943
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0
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40
60
80
CheckedBank Acct.
Moved Funds CheckedUtility Online
Used OnlineBillpayService
Paid Bill atCompanyWebsite
2000
2002
2004
2006
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C2C Commerce
The internet creates a growing market for consumers to deal directly, using online classifieds and auction sites
Online Activities (12 month period, based on population with home or work internet access)
30
12 91818
44
0
20
40
60
Bought from AnotherConsumer
Sold item Online Bought throughMultilevel Marketing
Channel
2004
2006
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Expect a Revolution in e-Services
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Factors Holding Back the e-Service Revolution in the U.S.
Promises for the Future– Fully mobile
commerce– Location-free
entertainment– Voice/data
convergence in service transactions
– Personalized mini-brands
– Web-conferenced interactions
Issues in U.S.– Slow connectivity
(behind Asia and Europe)
– Slow introduction of 3G, 4G and Wimax
– Limited consumer awareness of new technologies*
– Lingering insecurity
*In the 2005/6 NTRS, only 18% were at least a “little familiar” with 3G
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Issues in Researching e-Services
Changing Sampling Frames and their Impact
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Why NTRS Changed Methodologies
In 2005/6, the NTRS was fielded using ½ telephone sample and ½ web sample– Telephone: Random Digit Dialing (once the
gold standard)– Web: utilized a web panel by Survey
Sampling Incorporated
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Issues with Telephone Sampling
Researchers are not allowed to contact cell phones for interviewingThere has been an increasing number of “cell phone only” households due to…– Households never signing up for wireline service
(usually younger, more mobile)– Number portability legislation allowing migration of
wireline numbers to cell phones– Estimated to be 10.3% in early 2006
Phone surveys also face problems with voice mail and caller ID being used to screen interviewing
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Issues with Web Sampling
There is no rigorous probability sampling method for email/web surveys– Lack of an exhaustive sampling frame– Researcher code of conduct (CASRO) prohibits
unsolicited survey invitations
Researchers must rely on consumer panels, which have a range of potential problems– While possible to balance for demographics…– Other biases cannot be controlled
Excludes the 1/6 of consumers who are not online– At this point, the % coverage of telephone and web
frames is about the same
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Issues with Combining Data
Scale usage by Respondents – note that TR items are fully anchored to help with this issueDifferent technology beliefs and behaviors after controlling for demographics and accessComplex weighting steps needed to address differences in frames
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Future Directions
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Future Steps for NTRS
The 2007 NTRS is in the field nowThe focus will be on Greenovators™ (the intersection between Green awareness and technology)Possible areas to explore:– Should the TRI list be refined, e.g., culling
less stable measures?– Exploring TRI on a global scale (we now
have a 9 country study using 10 items)