Do you know what Conjoint Analysis is? Well, you should. Every business should be doing Conjoint Analysis on a regular basis. Why am I so passionate about this? It’s because I’ve seen first-hand how powerful this methodology is. Granted, Conjoint Analysis has been around for a while, but it’s still vastly underused. I spoke with a brand manager for a nationally recognizable product last week and he described to me all of the business problems on his plate. About half of what he’s working on fits Conjoint Analysis to a tee so I asked him, “Are you familiar with Conjoint Analysis?” He looked at me like I asked him what the square root of 1,936 is. I couldn’t believe he had never heard of it. I felt like I had the secret answer to all his problems and I had to share it with him. Ok, maybe that’s a slight exaggeration, but I think everyone should be aware of how powerful Conjoint Analysis is. Don’t believe me? Let me show you…
First off, you may be wondering, “Who are we to be talking about this?” We don’t like to tip our own hat often on the blog but we know Conjoint just as well as anyone. We’ve conducted over 500 Conjoint studies in a variety of industries.
Here are a few things you should know about Conjoint Analysis…
Conjoint Analysis simulates a real purchase decision-making environment.
Each day we experience many “trade-off” scenarios such as “Where should I go to eat?”, “What flight should I choose for my trip?”, and the list goes on and on. Making these trade-offs are very natural and are an everyday aspect of the consumer lifestyle. You can then figure out the specific elements which drive peoples’ decisions by observing their choices. This is one of the principals that make Conjoint Analysis so valuable.
Our friends at Sawtooth Software produced an excellent video explaining how Conjoint works in very simple language.
Conjoint Analysis has many applications
- “What should my price be?”
- “What message do I need to communicate to increase the perceived value of my product to support a price increase?”
- Shifting from a cost-plus to a value-based pricing strategy
New Product Development
- “What features and benefits should be embedded in the product to optimize market share?”
- “What is the combination of messaging elements that generates the highest intent to purchase?”
- “Which messages have the strongest impact when attached to my brand?”
- “Which messages should my brand stay away from?”
- “Which messages are already “owned” by other brands in my category?”
- One possible deliverable from a conjoint study is identification of the “segments” of consumers that occur naturally because they are motivated by the same type of message. For example, one segment may be drawn to an emotional message while another responds to facts and figures. These response-based segments can be a more compelling way to group consumers than standard demographics.
Conjoint Analysis has many flavors
A core benefit of hiring a marketing research company is the consulting support that accompanies project execution. The experience and ability of the research firm to connect the most effective research strategy to your business problem is extremely valuable. Conjoint Analysis has many different variations or “flavors.” Your unique business problem might fit one flavor better than another. Here’s a breakdown of the different Conjoint flavors.
Conjoint Analysis provides actionable information
One of the most over-used phrases in market research is “actionable information.” All market research firms hope their delivered insights are put to practice right away, but we know that sometimes reports just sit on the shelf and collect dust. By its design, Conjoint Analysis is able to answer specific business questions, making the deliverables “actionable information.”
For example, we recently posted how to use Conjoint to optimize product bundles. The deliverables listed the specific product features and benefits that would maximize revenue of existing product bundles. That is “actionable information!”
- Conjoint Analysis simulates a real purchase decision-making environment.
- Conjoint Analysis has many applications.
- Conjoint Analysis has many flavors.
- Conjoint Analysis provides actionable information.