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 conjoint@qualtrics.com

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!