How Businesses are Leveraging Conjoint Analysis Every Day

How Businesses are Leveraging Conjoint Analysis Every Day

Conjoint Analysis Applications

More and more, I’m seeing businesses utilize the power of conjoint analysis to improve their business and marketing strategy. Well, what’s all the hoopla about? Let’s take a quick dive into what conjoint analysis is and how you can start to leverage its applications in the business world.

What is Conjoint Analysis?

Conjoint analysis, aka Trade-off analysis, is a popular research method for predicting how people make complex choices. Conjoint asks people to make tradeoffs just like they do in their daily lives. You can then figure out what elements are driving peoples’ decisions by observing their choices.

Learn more about the details of how conjoint analysis works.

Conjoint Analysis Applications

Prioritize Features

Conjoint is extremely important in the product development and innovation stages. Businesses use conjoint analysis to test the different product features against each other in order to determine which features are most valuable to the consumer. Not only is it important to test which features have priority but to also test which features work best together. In other words, which features create the “magical” 1+1 = 3 relationship?

Develop Pricing Strategies

Used for pricing studies, conjoint analysis seeks to determine what your customers’ reactions will be if you change prices by a certain percentage or dollar amount. The slightest error in pricing can have a dramatic effect on revenue and margin.

Message Testing

Conjoint analysis is really about getting into the mind of the consumer. What messaging do consumers respond best to? By isolating messaging variables in a choice-based environment, businesses are able to identify the right message for the right audience.

Estimate Market Share or “Share of Preference”

An important part of messaging is understanding which messaging elements are attached to specific segments or brands. In other words, how much weight does a brand name have on a messaging element or phrase? Businesses use conjoint analysis to estimate their “share of preference” on specific messaging elements. This can also be valuable if you would like to know which phrases to avoid in your messaging because they are already attached to one of your competitors.

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