intro to conjoint analysis and maxdiff: how jetblue learns what passengers really want
TRANSCRIPT
Introduction to Conjoint AnalysisHow JetBlue Learns What Passengers Really Want
Qualtrics and JetBlue
Craig LutzConsulting Services LeadQualtrics
Jim O’BrienManager, Customer InsightsJetBlue Airways
Speakers
Conjoint Analysis
When to use conjoint analysis?Types of conjoint analysis?How is it conducted?What output do you get?What is the value?
Conjoint Analysis
When to use conjoint analysis?Types of conjoint analysis?How is it conducted?What output do you get?What is the value?
When we have a product/service that consists of a combination of features
Hotel room offering is a combination of many features or attributes
CleanlinessBreakfast includedBalcony/ViewWi-Fi includedCOST
Conjoint Analysis
Conjoint Analysis
Wi-F
i Free /w room
Not Included
Bre
akfa
st Buffet
Not Available
Room Service Included
Pric
e
$99 per night
$150 per night
$250 per night
$500 per night
Conjoint Analysis
When to use conjoint analysis?Types of conjoint analysis?How is it conducted?What output do you get?What is the value?
Types of conjoint analysis
Choice-based conjoint analysisAdaptive choice-based conjoint analysisSelf-explicated conjoint analysisMenu-based conjoint analysisMaxDiff (the cousin of conjoint analysis)
Choice-based conjoint analysis
Most common approachDiscrete choiceModels real-world decisions we make everyday
VS
Adaptive choice-based conjoint analysis
Can handle large feature setsCombinations adapt based on previous selectionsSurvey gets ‘smarter’ as you progress
Adaptive choice-based conjoint analysis
Adaptive choice-based conjoint analysis
Adaptive choice-based conjoint analysis
Self-explicated conjoint analysis
Direct questioning about features & levelsDeconstruct the packages into individual parts
101
Menu-based conjoint analysis
Allow respondent to choose their own packageUseful when it models the real-world experience (phone plans)
Conjoint Analysis
When to use conjoint analysis?Types of conjoint analysis?How is it conducted?What output do you get?What is the value?
Conjoint Analysis
Steps:
Determine the feature set to testExperimental designSurvey programmingCollection of responsesAnalysis & reporting
Features to includeW
i-Fi Free /w room
Not Included Bre
akfa
st Buffet
Not Available
Room Service Included
Pric
e
$99 per night
$150 per night
$250 per night
$500 per night
Experimental Design
Survey Programming
Analysis & Reporting
Conjoint Analysis
When to use conjoint analysis?Types of conjoint analysis?How is it conducted?What output do you get?What is the value?
Conjoint Analysis
We understand how important each feature isWe understand how preferred the levels are within each feature
Conjoint AnalysisFeatures Importance Score Level Level Preference Share
Cleanliness
Extremely Clean
Moderately Clean
Not Clean
Breakfast
Not Included
Buffet
Room Service Included
Balcony
Included
Included w/ great view
Not Included
Wifi Free w/ room
Not Included
Cost (per night)
$500
$400
$249
$179
$99
27%
11%
4%
19%
39%
93%
6%
1%
10%
45%
45%
35%
45%
20%
75%
25%
5%
10%
25%
25%
35%
Conjoint Analysis
When to use conjoint analysis?Types of conjoint analysis?How is it conducted?What output do you get?What is the value?
Conjoint Analysis
Closely models real-world decisions, we get highly relevant dataSimulate how product configurations will perform in market
Jet BlueCase Study
JetBlue - ConjointCredit card loyalty programs are perfect for conjoint analysis
FEATURE LEVEL 1 LEVEL 2 LEVEL 3APR 5.99%-9.99% 9.99%-14.99% 14.99%-21.99%
Mileage Bonus 15,000 20,000 25,000Blackout Dates None Major Holidays Weekends and Holidays
Free Bags 0 1 2Minimum Spend for Bonus $0 $1,000 $3,000
Conjoint attributes are example only – not indicative of actual scenario
JetBlue - ConjointWhich card is best?
Card APR Free Bags
Blackout Dates
Minimum Bonus Spend
Mileage Bonus
A 10.99%-15.99%
0 None $3,000 50,000
B 15.99%-20.99%
2 Holidays $5,000 25,000
C 10.99%-17.99%
1 Weekends $2,000 15,000
JetBlue - ConjointDiffering priorities
FEATURE APRAPR 150%
Free Bags Nope
Blackout DatesEvery day but the second Tuesday in
SeptemberMinimum Spend
for Bonus $100,000,000
Mileage Bonus 12 Miles
Evil Corporation Ideal
FEATURE APRAPR No interest. Ever.
Free Bag Refrigerator boxes too!
Blackout Dates Never
Minimum Spend for Bonus Free
Mileage Bonus One Krazilion
Customer Ideal
JetBlue - ConjointWhat is most important to the customer?How can the mix be changed to balance the interests of both parties?
FEATURE IMPORTANCEAPR 32%
Mileage Bonus 20%Annual Fee 18%Free Bag 16%
Minimum Spend for Bonus
14%
Can’t budge
Some leeway
Some leeway
JetBlue - ConjointChange features to compensate for others
FEATURE LEVELAPR 5.99%-14.99%
Mileage Bonus 15,000Blackout Dates Major Holidays
Free Bags 1Minimum Spend
for Bonus$5,000
FEATURE LEVELAPR 14.99%-21.99%
Mileage Bonus 25,000Blackout Dates Major Holidays
Free Bags 1Minimum Spend
for Bonus$2,500
Customer Ideal APR Possible APR
Same adoption as
Mistakes of Conjoint Analysis
Including too many attributes/featuresUnclear on goals at onset of projectSample size too small
Q & A