The digital divide
The way Australians source and select trades and other service providers is changing. Can you afford to be left on the wrong side of the digital divide?
As anyone who lived through the ‘threat’ of catastrophe courtesy of the Y2K bug can tell you, not every technology prediction plays out the way the experts initially imagine. We’ve been hearing about the potential negative impact of continually evolving technology for decades, some put forward with a greater sense of hysteria than others: the rise of artificial intelligence will render us all jobless; drones will be used to deliver our packages; driverless cars will take over the roads.
In focusing on the big or shocking predictions, we often ignore the small, creeping changes that sneak up and change the status quo. Whether we are paying attention to new technologies (or see the potential for change in a broader sense) can be attributed — at least in part — to our age.
Our age defines us
Whereas older Australians often continue to utilise old-school methods, digital natives (those born in the internet age who are completely at ease with computers and a life lived online) will always look first to technology to solve a problem.
This difference is illustrated in a 2018 study conducted by online trade sourcing hub HiPages. The company commissioned the study and released a report on its findings based on research conducted by EY Sweeney and L.E.K. Consulting. EY Sweeney conducted a survey of over 500 consumers and 500 tradespeople nationwide to ascertain insights into current pain points (for both sides of the equation) and the potential for industry growth. L.E.K. surveyed over 1000 consumers and nearly 400 tradespeople to ascertain the size and shape of what is referred to as the ‘residential trade economy’.
The upshot — the report ‘The On-Demand Tradie Economy: Reimagining Australia’s residential trade sector’ — found that some habits, as they say, die hard and that many Australian trades and industries are lagging in terms of consumer expectation when it comes facilitating an easier way to do business.
The way we were… and where we’re going
According to the report, consumers looking for a tradesperson 30 years ago relied heavily on word of mouth and paper directories like the Yellow Pages. When looking at current practices, it found that the rate of technology adoption by both consumers and trades remains relatively slow when compared with other industries. More than 70% of surveyed consumers still engage trades through ‘old school’ word of mouth, or by contacting a previously used tradesperson.
When broken down by age, that number starts to shift. When averaged out, 47% of consumers rely on word of mouth and 41% will contact a previously used tradesperson. In the over-60 age bracket, that 41% increases to 60%, meaning older customers tend to ‘go with who they know’.
Looking at newer ways to source, search engine use accounts for 39% overall, but that figure jumps to 53% of those surveyed aged under 35 years. Remarkably, 19% of total respondents are still using traditional directories, which comes in ahead of the 16% using specialised websites (like HiPages). Perhaps not surprisingly, social media is also skewed towards a younger audience — 36% under the age of 35 seek trades via Facebook and other social platforms, with that figure decreasing to 19% when all ages are factored in.
So… on the consumer side, we know that millennials are heavily leveraging what the report refers to as the ‘on-demand tradie economy’ and older Australians are slower to uptake. From the trade perspective, online platforms are the preferred avenue for millennials (36%) and Gen X (34%) to market themselves and source new business.
Given the source of the report, it’s not surprising that there is a focus on the importance of positive online reviews as an avenue for future business. Possible vested interest aside, online reviews are today’s word of mouth, so they are increasingly important to any business looking to attract new customers. We’ve moved from a world where positive word of mouth came from people known to the potential client. Thanks to our growing connectedness, anyone with access to the internet is a spokesperson for your business — be it a positive or negative voice.
How we engage
Once a customer has found a likely contender, they obviously need to initiate contact — and this is where things get interesting. 66% of survey respondents make a telephone call in the first instance, 32% send a text message, 27% rely on email, 23% favour social media and only 19% will make an enquiry directly via the business’s website (note that the total exceeds 100% as some respondents selected more than one approach).
Despite an increasing reliance on digital tools, the humble phone call wins out when it comes to making contact and the most likely explanation for this is the immediacy of results. With text messaging identified as the next closest preferred option, we can surmise that landlines are probably on the way out as a business tool. The fact that less than one-fifth of respondents look to a company website for initial contact doesn’t mean that websites themselves are unwarranted — they’re still a powerful showcase of expertise and ability — but you can probably save yourself the trouble of including an online enquiry form.
Customer pain points
The report also aimed to uncover the things customers hate when it comes to sourcing service providers. The number one irritant is finding someone who will show up on time, nominated by 48% of respondents. There’s not much separating the second problem — 45% of customers don’t like being hit with unforeseen or unexpected costs. A further 33% said paying in cash was a pain (again, multiple responses mean the numbers exceed 100%).
These issues may not initially appear as problems to be solved by technology, but they are symptomatic of the general change in customer expectation. Thanks to the prevalence of mobile technologies, we now demand speed, ease of use and transparency in most transactions, and engaging a trade or service provider is no different.
HiPages says these results underline the need for tradespeople to optimise invoicing and payments methods. While this is obviously directly connected to its own product offering, it does highlight the changing billing and payments landscape. In the age of tap-and-go and buy-now, pay-later, Australian consumers are carrying less cash and used to doing things on the fly.
Industry pain points
The report also looked into problems experienced from industry — 37% of respondents have problems getting paid, 33% bemoaned the time required to prepare quotes, 33% say it’s hard to find employees, 29% nominated administrative burden as an issue and 29% said payroll and taxes were a pain point.
According to the report, one in four tradespeople has rejected a project in the last 12 months due to an overwhelming administrative burden. Seven out of 10 recognised that technology implementation like GPS use, mobile payment solutions and scheduling software could solve many of these problems. The bonus here is that these improvements would all directly address the previously identified customer issues.
Given the availability of technology solutions designed specifically to address the issues found on both sides of the equation, the slow rate of uptake in trade and residential service provider sectors is hard to explain. There are many simple and low-cost new technology alternatives — and an increasing number developed specifically for the pool and spa industry — that offer easier ways to attract new clients and keep the wheels turning smoothly, especially when compared with traditional practices.
As digital natives move through more mature life stages, they will use the tools and technologies inherent in their lives to search and source tradespeople and service providers that operate in a way that makes sense to them. The ‘man in a van’ with a handwritten invoice who wants to be paid in cash probably doesn’t feature too highly in that regard. The digital divide may have crept up slowly, but it’s not going anywhere and it’s widening with each day. If you haven’t already taken stock of the way you do business and acknowledged the changing expectations and needs of your clients, maybe now is the time.
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