Thursday, February 09, 2006

Hierarchy of Effects - BS or Baseline?

Over 100 years ago, marketers first conceived a model for consumer purchasing behavior. Originally, it was suggested to be a very simple model of four stages:

Awareness › Interest › Desire › Action

In the 1960s, the model was refined and relabeled as the Hierarchy of Effects (HOE), founded upon the assumption of a three-stage process underlying consumer purchase behavior:
Cognition › Affect › Behavior

“Cognition” represented the process of becoming specifically aware of a solution to fit one’s need; “affect” was the process of becoming emotionally engaged in the purchase; and “behavior” was the resulting purchase.

Over the past 40 years, all this has proven time and again to be wrong. So why is it still potentially so valuable?

The HOE model may be right for some categories and some consumers at some points in time, but it fails miserably as a predictor of how most people buy in most categories most of the time. It assumes a sequential linearity of the buying process that just doesn't hold in many (if not most) occasions. True, you are unlikely to buy something you are not aware of. But, you might just become aware of it by seeing it on the shelf at the checkout counter and decide, on impulse, to pick it up. No emotional bonding required.

But the real value of the HOE model to marketers isn’t in its accuracy as much as its existence. The mere fact that we have such a model as a starting point to begin to consider how our own categories work is very valuable. Diagnosing the linear or non-linear stages of progression amongst our own customers can be highly beneficial in forcing us to think “outside-in” from the customer perspective. It encourages us to map out the models that work in our own business, see where the critical prospect/customer progressions might be, and better understand what causes those progressions to work or what obstacles prevent them.

HOE is also a good starting point for defining and dimensionalizing segmentation strategies. If you can identify certain types of customers who employ variants of the HOE model in making their purchases, you have by definition identified discrete segments which might be targetable through efficient, albeit very different means.

Finally, HOE as a starting point helps facilitate the discussion about critical predictive metrics for measurement purposes. If you can describe and validate the buying model for a given segment of customers, it stands to reason that by closely monitoring the stage-gates at the front-end of the cycle you might reasonably predict the resulting levels of purchase behavior and a timeframe for their occurance.

Have you identified your customer progression points? How did you begin the process? Share your thoughts …

1 comment:

Minotei said...

The HOE through AIDA is still very valuable.
People buying on impulse are still triggered by external factors: packaging, color etc.
By looking at integrated marketing communication as a way of more effective communication, advertising becomes a part of a total. Therefore I argue that the HOE is a handy tool when developing anything within an integrated approach.