Why Customers Buy | Conjoint Analysis: Unlocking the Secret to What Your Customers Value
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Transcript of Why Customers Buy | Conjoint Analysis: Unlocking the Secret to What Your Customers Value
Mike Maughan
Product Marketing
Craig Lutz
Professional Services
Customer-driven World
Conjoint for Humans
Dating = Conjoint Decisions
What is Conjoint Analysis?
• Measures preference and value • Models market experience • Identifies role of price • Predicts market adoption
Building Blocks of Conjoint
• Features • Levels
Conjoint on the Road
2014 Ferrari Enzo F70
Color
Horse Power
Cost Body Style
MPG
Red
Black
Yellow
Steps of a Conjoint Analysis Project
1. Define features and levels 2. Select type of conjoint
analysis 3. Collect data 4. Run analysis & reporting
Types of Conjoint Analysis
• Choice-based • Adaptive Choice • Menu-based • Full-profile Rating-based • Self-explicated
Types of Conjoint Analysis
• Choice-based • Adaptive Choice • Menu-based • Full-profile Rating-based • Self-explicated
Choice-based Conjoint Analysis
• Most commonly used • Respondents select
from grouped options OR A double scoop of
vanilla ice cream with no toppings
A single scoop of chocolate ice cream
with chocolate chunks
Which ice cream option is more appealing to you?
Choice-based Conjoint Analysis
• Simplest and easiest • Accurately simulates the
market
• An excessive number of features or levels (in combination) necessitates long surveys, which leads to survey fatigue
Pros Cons
NFL Team Ticket Packages
• Situation: The team had to raise ticket prices • Goal: Understand what fans most valued, allowing the NFL
team to present ticket packages that delivered the right value at the right price
NFL Team Ticket Packages Pricing
Features Levels* Seat location End zone, sideline, upper bowl, lower bowl
Price $100, $200, $300, $400
Parking Voucher VIP lot, Lot A, Lot B, Shuttle lot
Concession Voucher Full meal, hot dog and drink, 3 beers *These are not the actual levels used in this conjoint analysis project.
Types of Conjoint Analysis
• Choice-based • Adaptive Choice • Menu-based • Full-profile Rating-based • Self-explicated
Adaptive Choice Conjoint Analysis
• Can handle large feature sets • Packages adapt based on
previous selections • It gets ‘smarter’ as the survey
progresses
Adaptive Choice Conjoint Analysis
Adaptive Choice Conjoint Analysis
Adaptive Choice Conjoint Analysis
Adaptive Choice Conjoint Analysis
• Effectively handles many features and levels
• Maximizes respondents’ time by asking fewer questions to get to equally valid data
• More complicated to set up, and thus more costly
• Requires more advanced statistical methods to determine preference models
Pros Cons
Adaptive Choice Conjoint Analysis
Types of Conjoint Analysis
• Choice-based • Adaptive Choice • Menu-based • Full-profile Rating-based • Self-explicated
Menu-based Conjoint Analysis
• Respondents are shown a list of features and levels
• Respondents choose among options to create their ideal product, rather than selecting from pre-established groupings
Please select from the following items to configure your optimal dining experience:
Restaurant type: Café Casual dining Buffet Pub / bar Fast food
Atmosphere
Quiet Family friendly Rowdy Themed
Perks
Free wifi Entertainment Free appetizers
• Fewer questions are used to determine what customers value
• The most flexible and engaging type of conjoint survey
• Results are less scientific – they are not based on regressions, but rather count totals or percentages
Pros Cons
Menu-based Conjoint Analysis
Telecommunications Company
• Modeled the buying behavior demonstrated in the market
MINUTES: 100 minutes 500 minutes 2000 minutes Unlimited minutes
TEXTS 200 texts 500 texts 1000 texts Unlimited texts
DATA 2 GB 5 GB 10 GB Unlimited data
Cell Phone Minutes
1000 minutes
Texts
Data
Types of Conjoint Analysis • Choice-based • Adaptive Choice • Menu-based • Full-profile Rating-based • Self-explicated
Full-profile Rating-based Conjoint Analysis
• Display series of product profiles
• Typically rated on a likelihood to purchase or preference scale
• Allows for the greatest variation in responses
• Most granular feedback
• Can lead to respondent fatigue
• Does not value the market as accurately as other types
• Ambiguity between rating scales
Pros Cons
Full-profile Rating-based Conjoint Analysis
Laser Spine Treatment Marketing
• Goal: Develop effective $16M advertisement campaign
• Action: Conjoint survey of individuals over 50 with moderate to severe back pain
• Impact: Doubled first year expected revenue goal
Types of Conjoint Analysis
• Choice-based • Adaptive Choice • Menu-based • Full-profile Rating-based • Self-explicated
Self-explicated Conjoint Analysis • Direct ask of feature and levels • Each feature is presented
separately for evaluation or elimination
• Respondents rate all remaining features according to desirability
• Simpler and shorter for respondents
• Fully supported within the Qualtrics platform
• Lose all interaction effects • It is limited to features and
levels that don’t include price
Pros Cons
Self-explicated Conjoint Analysis
Financial Services Firm Non-price related questions: • Who do you prefer to contact
you? (Sales, customer support, marketing, etc.)
• How do you prefer to be contacted? (Phone call, text, mail, email, etc.)
• Would you like to be followed up with if not reached in first attempt (Yes, No)
Output of Conjoint Analysis
Simulator
Qualtrics Professional Services
• 150+ conjoint projects per year • Leverages the flexibility and reach of
the Qualtrics platform • For a quote on professional services
work, feel free to reach out to us at [email protected]
Qualtrics Professional Services Conjoint analysis is just one of the things the Qualtrics Professional Services team does. They're also great at: • Voice of the Customer • Website Advisory Services • Custom Dashboards • API Integration Services • Research Consulting • And much, much more!
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Questions?
Thank you!