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The Response Lifecycle

lifecycle

The product lifecycle is an important part of sales and marketing strategies and by using a similar methodology it is possible to break down response channels to create a response lifecycle.

Introduction

A response lifecycle provides an understanding of the advertising response channels users prefer to use when interacting with an organisation. It can be used to assess the appropriate media and creative to use when planning a marketing campaign. The response lifecycle should be used in conjunction with the product lifecycle and targeting tools to provide a map of the most suitable response mechanisms.

In context

If your market place has a large proportion of early adopters (e.g. students) then the direct response mechanisms in a marketing campaign should be weighted towards the telephone and email with a move towards SMS – once the mobile usage has been ascertained from the phone response.

Alternatively if your market is old fashioned (e.g. Senior Citizens) then the campaign should focus on mature response mechanisms such as postal reply services and the telephone. In this circumstance Email and SMS will be less effective.

Lifecycle stages

The diagram and table below show the advertising response channels mapped on the traditional product lifecycle model.

Response Channel Lifecycle Stage Customer Types
3G Introduction Innovators
Digital radio Introduction Innovators
Digital TV Introduction to growth Innovators to early adopters
SMS text Growth Innovators to early adopters
Email Growth Early adopters
Internet Growth to maturity Early adopters to middle majority
Telephone Mature Middle majority
Face-to-face Mature Middle majority
Television Mature Middle majority could decline?
DM Mature to decline Middle majority to decline
Response cards Decline Laggards
Fax Decline Laggards

Introduction stage

These advertising response channels have just entered the commercial domain and it is uncertain whether they will grow beyond niche usage. Response channels in the introduction stage include 3G and digital radio.

3G

We believe that 3G will eventually be an important direct response mechanism but until there are sufficient handsets in circulation this will be a niche mechanism. Anticipate a great deal of hype in the coming year with little delivery. 3G will struggle for a couple of years to find a 'killer application' to move it into the growth and maturity stages.

Digital Radio

Digital radio may become a valuable platform for interactive messages, like 3G it needs to create a critical mass and prove its ability to create direct response. Until digital radio ia able to provide interactivity and audiences for advertisers there is a danger it could end up being digital TV's Betamax.

Growth Stage

These channels are moving out of the niche and into the mainstream. You can tell response channels that are in the early adoption phase because they are flooded with advertisers providing get-rich-quick scams! Response channels in their growth stage include Digital TV, SMS, email and the internet.

Digital TV

Digital TV is at the very early stages of its growth curve. We anticipate this area to grow as the technology becomes easier to use in the sitting room. Eventually it will take over from terrestrial TV as advertisers preferred medium for interacting with consumers. As interaction increases, digital companies will build up valuable user data which will enhance digital TV's appeal in the future.

SMS

Text is growing fast but it needs to be highly targeted. Significant brand damage can be created by sending unsolicited texts. We believe that texting will become a part of the marketing mix but will be used on a tactical basis because of the instant nature of the information being delivered.

Email

Currently the largest growth area in the response lifecycle. Well targeted emails containing relevant information can generate significant response. The downside is the current preponderance of spam. Which means that if emails are not pertinent they can damage the brand.

Emails will be an increasingly important part of the advertising response mix, partly driven by cost. A careful strategy needs to be adopted to ensure recipients want to receive the email. In the next year we believe emails will become a main stream marketing channel with the introduction of interactive and dynamic HTML which are efficiently displayed.

Websites

The Internet continues to grow but is reaching the maturity stage. It is a powerful way of delivering information to customers and interacting with multiple users without large scale human interaction.

Customers are increasingly using websites to gather information before they interact with companies via other response channels. Whilst websites have increased their role within the channel mix, their importance is still underestimated by marketeers relative to their usage by consumers.

Maturity Stage

Tried and tested response mechanisms that are used by bulk consumers. They are readily interchangeable by consumers and advertisors face a challenge ensuring a consistency of message and service across the different channels. Mature response channels include the telephone, face-to-face, direct mail, radio and terrestrial television.

Telephone

Now the largest response channel and used in conjunction with many other channels. We believe that the use of the telephone will grow in scale but with this growth will come more sophisticated automated systems for filtering calls to drive down the cost of interaction. There will be an increased use of monitoring systems such as those provided by Mediahawk which will help organisations get a better understanding of how they interact with their customers.

The telephone is now such a ubiquitous response channel that organisations take it for granted without having an appropriate strategy defining how it will be used to represent their organisation. The telephone strategy is a core part of the overall marketing strategy.

Face-to-face

This will always be an important advertising response channel. Companies will look to find ways of replicating the experience whilst driving out the cost – hence the rise in call centres.

Direct mail

This is a growing area because of its ability target appropriate users more efficiently than mass response channels such as TV. The high cost of direct mail and the rise in the use of precision targeted email will mean that in the next few years direct mail will move into the decline phase.

Radio

A powerful channel for branding and driving consumers into other channels. Its importance in generating response will increase once digital radio becomes readily accepted. The growth in texting will generate an increase in radio advertising using telephone numbers that are alpha numeric rather than memorable.

Television

Terrestrial television as an advertising medium is in danger of going into decline as channels fracture and respondents interact through other media – including fast growing digital TV.

The challenge terrestrial TV faces is how to justify the expense of blanket coverage as marketeers become increasingly targeted in their campaigns. Unless terrestrial TV can come up with more reliable systems than the likes of BARB to prove their audiences, they will lose out to other media that can prove their effectiveness.

Decline stage

These are response mechanisms used by laggards who “do things the way they have always done them”. Response channels that are in decline include response cards and the fax.

Response card

They have declined dramatically in recent years though are still used by older sections of the community that are more comfortable replying by mail. In the coming years response cards will have been incorporated into the web which will give users more information and faster interaction.

Fax

Fax grew very quickly and is now declining very fast. The cost of sending and the inability to target the recipients is responsible. We believe that faxes will fall out of the marketing mix and will join morse code, the telegram and the telex in the response channel dust bin.

Summary

The article provides a simple framework for understanding how consumers use channels in different markets.

Marketing professionals can often be more conservative than their target audiences and miss the opportunity to use channels which will generate the best response. By understanding the appropriate channels to use for different target markets it is possible to create the appropriate operational and marketing strategy for interacting with customers.

Your comments on our views would be greatly received and if you want to discuss the response lifecycle in more depth please get in touch.

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