Why is my iPhone5 sending some messages as iMessage and others as Text Messages?

I understand that messages are sent as Text Messages when there's no signal or poor Wi-Fi connection. However, I'm successfully texting some people using iMessage but others (still iPhone users) as Text messages. The other person will send iMessages and then my responses will be sent as green Text Messages.

They have something setup wrong on their end, they need to have imessage turned on.