INSIGHT on INSIGHT: Utilizing Lifecycle Modeling
WHAT AND WHEN: Proper usage
There are some staple or necessity categories, like toilet paper, where consumption begins at a very young age and doesn’t end until death.
More categories are discretionary in nature. People choose if, when, and how often the category is consumed. These categories can have very elastic demand with few people ever approaching their theoretical consumption limit.
It would be difficult to convince someone they need to use more toilet paper, but it might not be that difficult to convince someone of the benefits of consuming more orange juice, buying new bath towels or adding a DVD or video game to their collection.
To some degree, a company or retailer controls the fate of the discretionary categories based on how much they are willing to invest in attracting new buyers and new sales.
Of course, plenty of other categories are competing to attract those same discretionary dollars.
Crafting an effective message to encourage this begins with understanding the process of entering the category, evolving within the category and either maturing within or departing from the category.
WHY: The benefit and value
Lifecycle learning can be extremely insightful as it can create a completely new lens through which to view the category.
Few companies have modeled this sequence and thus most have very limited understanding of what factors, in what order represent opportunities to attract, grow and retain more buyers.
The value produced by modeling the lifecycle comes in the many ways it reveals new insight. This includes:
- Identifying the best sources of new buyers and what those prospects look like.
- Quantifying the pool of prospects that are not current buyers, but share the needs, desires or profile of existing buyers.
- Understanding how unmet needs are realized and what directs new buyers to the category.
- Understanding where information and education is needed to help shoppers value the category and find the right product for their need.
- Tracing how shopping and consumption evolve the longer people use the category.
- Identifying what triggers reduce consumption or cause people to entirely exit the category.
HOW: Tips to guide a basic approach
Accurate lifecycle modeling is limited by how complete the client understands the category. For this reason, preliminary qualitative in-depth interviews are sometime done to guide design.
Assuming sufficient category perspective exists, a proper approach to this work should include the following design elements:
- Be sure to cast a broad enough net when identifying and recruiting past, present and prospective category buyers.
- Be sure to design for all the different branching scenarios based on the numerous paths buyers may take as they enter, evolve, and mature through the category.
- Consider diving deeper into the barriers preventing more people from entering the category in the first place.
- Determine how easily lapsed users can be recaptured or if they are damaged goods with too high a cost to repair.
- Be sure that design goes deep enough into the attitudes and perceptions beyond behaviors that must be understood in order to identify appropriate actions.
APPLICATION: What to do with the results
Comprehensive lifecycle models can produce great clarity and direction related to a broad range of decisions. Some areas of application include:
- Merging lifecycle models with segmentation to identify and track unique groups with unique value.
- Developing new programs to enlarge the funnel of new shoppers considering or entering the category.
- Crafting programs to better manage how buyers evolve their use and involvement with the category.
- Finding ways to stop the leakage of buyers deciding to significantly reduce consumption or completely exit the category.
- Understanding the lifecycle for a category to identify all the key inflection points a company or retailer should be focused on to guide buyers toward becoming more satisfied and more valuable.