34 | BROADBAND COMMUNITIES | www.broadbandcommunities.com | NOVEMBER/DECEMBER 2012 ECONOMIC DEVELOPMENT A s the build phases of ultra-fast broadband (e.g. fiber) network initiatives wind down, many network operators find they have reached an impasse. ey are offering robust net- works, but businesses, organizations and individuals are not adopting them. Why is this happening? If broadband is truly the socioeconomic development agent that so many believe it is, why aren’t more organizations adopting this new and improved “utility”? e problem is basic: Network oper- ators think they are offering a utility that everyone will flock to, but broadband, in some form or other, often already ex- ists for the target audiences. Migrating from broadband to ultra-fast broadband is a technology adoption process that re- quires examining the history of technol- ogy adoption and the marketing theory behind it. In 1957, the technology adoption life cycle model was introduced by Joe M. Bohlen, George M. Beal and Everett M. Rogers of Iowa State University to ex- plain the adoption process (in their case, of hybrid seed corn). e now-famous technology adoption curve (Figure 1) shows the unique life cycle of innova- tion and the groups who tend to adopt Broadband Is No Field of Dreams “Build it and they will come” is not a winning strategy for fiber network deployers. To appeal to the pragmatic majority, operators must educate potential customers about the benefits of ultra-broadband applications. along the way. If the original technology life cycle showed the nature of technology prod- uct adoption, in 1962 Everett Rogers, by then an Ohio State University professor, introduced nurture to the equation. In his book “Diffusion of Innovations,” he laid out four main elements that influ- ence technology adoption, or movement along the technology curve: By Doug Adams and Michael Curri ■ Strategic Networks Group About the Authors Doug Adams oversees SNG’s communications efforts. He has a long track record of success developing marketing strategies and positioning in a variety of tech industries. Contact him at [email protected] or 330-933-3374. Michael Curri is a broadband economist and founder and president of SNG, which quantifies the economic impacts of broadband and provides actionable intelligence for growth. He can be reached at [email protected] or 613-234-1549. Adoption Groups Technology Stage Innovators Bleeding Edge – Any technology that shows high potential but has not demonstrated its value or settled. Early Adopters Leading Edge – A technology that has proven itself in the marketplace but is still new enough that it may be difficult to find knowledgeable personnel to implement or support it. Early majority State of the Art – Majority believes the technology is the “right” solution. Late Majority Dated – Still useful but a more effective version is available. Laggards Obsolete – Maintained but no longer implemented technology. Figure 1: The technology adoption curve shows the life cycle of innovation. Make The Connection See p. 14
As the build phases of ultra-fast broadband (e.g. fiber) network initiatives wind down, many
network operators find they have reached an impasse. They are offering robust net-works, but businesses, organizations and individuals are not adopting them. Why is this happening? If broadband is truly the socioeconomic development agent that so many believe it is, why aren’t more organizations adopting this new and improved “utility”?
The problem is basic: Network oper-ators think they are offering a utility that everyone will flock to, but broadband, in some form or other, often already ex-ists for the target audiences. Migrating from broadband to ultra-fast broadband is a technology adoption process that re-quires examining the history of technol-ogy adoption and the marketing theory behind it.
In 1957, the technology adoption life cycle model was introduced by Joe M. Bohlen, George M. Beal and Everett M. Rogers of Iowa State University to ex-plain the adoption process (in their case, of hybrid seed corn). The now-famous technology adoption curve (Figure 1) shows the unique life cycle of innova-tion and the groups who tend to adopt
Broadband Is No Field of Dreams“Build it and they will come” is not a winning strategy for fiber network deployers. To appeal to the pragmatic majority, operators must educate potential customers about the benefits of ultra-broadband applications.
along the way. If the original technology life cycle
showed the nature of technology prod-uct adoption, in 1962 Everett Rogers, by then an Ohio State University professor,
introduced nurture to the equation. In his book “Diffusion of Innovations,” he laid out four main elements that influ-ence technology adoption, or movement along the technology curve:
By Doug Adams and Michael Curri ■ Strategic Networks Group
About the AuthorsDoug Adams oversees SNG’s communications efforts. He has a long track record of success developing marketing strategies and positioning in a variety of tech industries. Contact him at [email protected] or 330-933-3374. Michael Curri is a broadband economist and founder and president of SNG, which quantifies the economic impacts of broadband and provides actionable intelligence for growth. He can be reached at [email protected] or 613-234-1549.
Adoption Groups Technology Stage
Innovators Bleeding Edge – Any technology that shows high potential buthas not demonstrated its value or settled.
Early Adopters Leading Edge – A technology that has proven itself in the marketplace but is still new enough that it may be di�cult to �nd knowledgeable personnel to implement or support it.
Early majority State of the Art – Majority believes the technology is the “right” solution.
Late Majority Dated – Still useful but a more e�ective version is available.
Laggards Obsolete – Maintained but no longer implemented technology.
Figure 1: The technology adoption curve shows the life cycle of innovation.
ECONOMIC DEVELOPMENT • The innovation: The product or ser-
vice and its characteristics • Communication channels: How the
innovation is brought to the public • Time: The length of time required
for individuals to go through the five stages of decision making, namely
› Knowledge (the innovation is in-troduced)
› Persuasion (interest is estab-lished; information is sought and gathered)
› Decision (advantages and disad-vantages are weighed)
› Implementation (the innovation is employed)
› Confirmation (the innovation is used to its fullest potential)
• Social system: The interrelated units that are engaged in joint problem solving to accomplish a common goal.
In the experience of Strategic Net-works Group (SNG), developers of ultra-fast broadband networks too of-ten remain focused on the innovation element of their networks rather than moving on to address communication, time and social systems.
Crossing the ChAsm In 1991, Geoffrey A. Moore brought the technology life cycle together with the diffusion of innovation theory in his book “Crossing the Chasm.” In it, he explained the difficulty of moving prod-uct adoption from innovators and early adopters to a majority stage.
Moore called the pre-chasm group visionaries and the post-chasm group pragmatists. The key to a successful tech-nology rollout, he said, is not getting the
visionaries on board but rather winning over the pragmatists. To be adopted, most technology requires a change or an action. Getting the masses to start adopt-ing a technology innovation requires a compelling case to motivate action.
Many great technologies fall into the chasm because of a simple truism: People buy benefits, not features. Think about what happened to Betamax in the format war against VHS. Remem-ber that consumers bought iPods not because they offered new technology but because of the convenience of car-rying thousands of songs on one device; later they bought iPhones because they enable productivity and mobility. The challenge is to make technology not just a “shiny object” but a tool for living a better, more productive life.
In many technology firms, the champions of new products and ser-vices are engineers who are (justifiably) proud of and in love with the features of their products. They spent a great deal of time developing those features – but unless the features are made into bene-fits (thousands of songs in your pocket), products such as the iPod would die be-fore ever crossing the chasm. The chal-lenge is to take an engineer’s feature and make it relevant – a benefit.
How can an ultra-fast broadband network cross the chasm and progress from being an early-adopter technology to a mass technology? The survival of
many networks depends on the answer to this question.
Why Aren’t they Coming? As the build phases of ultra-fast broad-band network initiatives wind down, many network operators reach an im-passe. They are offering fantastic, won-derfully robust networks that busi-nesses, organizations, and individuals are not adopting.
Operators skilled at building and managing networks face a new hurdle – crossing the chasm by making their faster, more reliable broadband networks relevant to end users. The operators need to do this not only to achieve sustainable network utilization but also to drive the benefits from better broadband.
“Faster” is not a benefit. “A new world of possibilities” is too vague to be either a feature or a benefit. Benefits are what pragmatists look for when making a change or adopting a technology. So is it any wonder that “faster,” a feature, is not driving the desired network uptake?
Benefits to users need to be front and center to compel behavioral change. Significant adoption of advanced tech-nologies happens only when the benefits of adoption are communicated and un-derstood. Features such as “faster” and “more reliable” are great, but benefits move the adoption needle. What does faster mean? What can we do now with faster? What opportunities await my organization?
no Field oF dreAms BVU Authority in Bristol, Va., is just one SNG partner whose direct experi-ence shows the flaw in the “build it and they will come” strategy. BVU recently launched broadband services in two new areas. In one, the company conducted outreach, and in the other it did not. Both areas were up and ready for ser-vice in February 2012. After less than six months, the community that was marketed to had an uptake rate of 45 percent, and the one with no marketing
Mass adoption of a technology innovation requires a compelling case to motivate action.
ECONOMIC DEVELOPMENT support and consequently lower aware-ness had only an 18 percent take rate.
BVU found that the sooner it could start collecting recurring monthly rev-enue from customers, the faster revenue grew and the shorter the payback period became. It also found that aggressively marketing new ideas and applications caused its average revenue per user to grow – and again, the payback period was reduced.
The life cycle of ultra-fast broadband networks is no different from the life cycle of any other technology service or product since “high tech” was a wheel. Adoption takes time – time that most network operators just cannot afford.
At SNG, we have found that the key to sustainability and eventual profitabil-ity is to provide tools to speed up the technology adoption life cycle. Getting a network past its reliance on innovators and early adopters and across the chasm requires demonstrating value to the more pragmatic of technology adopters, the early and late majorities, and moving network adoption up the adoption curve.
Though one would be hard-pressed to find anyone in 2012 who does not think broadband is a great thing, not enough leaders of businesses, organiza-tions or community anchor institutions truly understand all the benefits that bigger broadband and ultra-fast broad-band networks can bring, especially the economic benefits that can come from fiber. This leaves fiber and ultra-fast net-works at a loss as to how to quickly drive uptake.
stArt With the BeneFits For more than a decade, SNG has col-lected information about broadband utilization and its impact on economic development for entire regions and on down to individual businesses and households. In the past several years, we have applied what we call a Digi-tal Economy index (DEi) score to the broadband utilization of individual enti-ties. DEi is a proprietary SNG measure whose scores range from 1 to 10 (10 be-ing the highest). Higher scores reflect de-ployment of a greater number, scope and sophistication of Internet activities in an organization.
With tens of thousands of house-
holds, businesses and organizations in our unique database of Internet utiliza-tion and impacts, we are able to ascer-tain the e-solutions that are easiest to adopt, the low-hanging fruit of Internet applications and the applications that have more difficulty finding resonance and stimulating adoption.
Unfortunately, the slow-to-adopt e-solutions are better served with ultra-fast broadband, so carriers face two chal-lenges: making these e-solutions relevant and driving uptake so individuals and organizations can realize these benefits.
Additionally, the slow-to-adopt e-solutions are the ones most beneficial to a network’s prospects because they drive the greatest economic impact for end users.
The value of ultra-fast broadband networks must be personalized to the needs of individual businesses, organi-zations and households. It is critical that this personalization demonstrate ben-efits and clearly lay out the value of bet-
ter broadband. Businesses, for example, need to know the return on investment (ROI) of adopting ultra-fast broadband.
Until fiber and ultra-fast network deployers figure out how to personal-ize the value of new, faster broadband connections to end users, adoption and meaningful use will continue to be an issue – and deployers will not see the up-take that can justify their investment in FTTH networks.
Putting their money Where our mouth is To turn “faster” into a benefit that can create uptake, SNG and its clients help businesses and other organizations in a network’s footprint go through a self-assessment process and then compare the Internet applications they are using with those they are not using. Alongside the applications not being used (we call them e-solutions), we include what their benefit could be, in dollars and cents, should they adopt these e-solutions.
Quick to Adopt Slow to Adopt
Access government information Teleworking
Electronic document transfer Rich media or service creation
Purchasing goods and services Selling goods or services
Online research Deliver services or content
Website Social networking Figure 3: E-solution adoption rates for average organizations (DEi = 6)
Figure 4: Many of the harder-to-adopt e-solutions are the most valuable.
• Social system: Leveraging indus-try leaders’ utilization of ultra-fast broadband and e-solutions to per-suade others to adopt.
onCe they Come, they Are not leAving SNG’s research shows that, once cus-tomers understand why ultra-fast broad-band is important and decide to adopt it, they not only realize greater benefits but also recognize the value and the ac-companying benefits. Figure 5 clearly demonstrates that users of ultra-fast broadband networks, in this case fiber networks, are seeing greater value.
Just as signifi-cantly, the level of customer satisfac-tion among fiber customers is off the charts when com-pared with cable, DSL and similar types of broadband. Fiber proved its re-liability, and other access types did not.
In other words, once a fiber network
gains a customer, it will most likely keep that customer.
ConClusion “Build it and they will come” is a flawed theory that ignores the basic laws of technology marketing. Theories devel-oped over the past 50 years – showing that technology adoption is slow and sometimes does not occur at all with-out smart, strategic efforts to cross the chasm and drive usage – continue to be borne out as true.
Make no mistake: Even if basic broadband is a utility, new, ultra-fast broadband is not a utility. It is a new technology that many see as a luxury, and it should be sold by touting the ben-efits of ultra-fast broadband and its ac-companying e-solutions rather than the feature of speed. v
Internet bene�ts vary by speed and quality of connection Sample: Fiber 737; Cable 1,257; DSL 1,892; Dial-up 102
0%
20%
40%
60%
80%
Enabling thegrowth of yourorganization or
business
Improvingproductivity
Costmanagement
Enablingproduct or
serviceinnovation
Fiber
Cable
DSL
Dial-up
Figure 5: Better broadband yields more benefits.
Figure 6: Customers are highly satisfied with fiber networks.
Showing businesses the ROI from adopting e-solutions encourages them to use broadband.
We actually provide ROI by comparing each organization with others of compa-rable size and type in our database and looking at the benefits they receive.
Driving adoption of ultra-fast broad-band networks is a two-step process:
• Education – driving understanding of ultra-fast broadband’s benefits
• Close – getting the household, com-pany or organization to actually sign up for service.
Only by creating an understanding of broadband benefits will a network reach the “majority” position as defined by the technology adoption life cycle.
In terms of the diffusion of innova-
tions theory, this process impacts move-ment along the tech curve and drives uptake by focusing on
• The innovation: Ultra-fast and more reliable broadband, effective utiliza-tion of which is different from basic Internet usage
• Communication channels: One-to-one communication of the ben-efits of e-solutions and the ultra-fast broadband needed for their full utilization
• Time: Understanding the ROI that ultra-fast broadband and its e-solu-tions bring makes prospects faster to adopt so they can realize efficiencies. This involves
› Knowledge (finding out what e-solutions are not being utilized that should be)
› Persuasion (communicating the ROI of adopting ultra-fast broad-band and e-solutions)
› Decision (weighing advantages and disadvantages and consider-ing the cost of not adopting)
› Implementation (signing up for ultra-fast broadband services)
› Confirmation (utilization of ultra-fast broadband and driving economic benefits)
