Forces customers to make choices similar to real life
Derive “utility” value of attributes and levels from these choices
Very powerful.. And dangerous
Limitation: closed exploration
Potential market share
“ What if” scenarios
www.compareandsave.com Attributes Levels
TV’s on Bestbuy.com Customers must always make feature/price tradeoffs… How important is… Refresh rate? Resolution? Picture-in-Picture? … to the purchase decision? To the price?
A Short Intro to Innovation Processes
Questions through the Innovation Life Cycle www.planninginnovations.com Capturing Ideas and Opportunities? Customer Problems? Trends of Interest? Feature priorities? Value questions? Market size? Pricing? Take rate? Usability? Readiness? Messages? Marketing and Sales Programs? Research techniques must reflect innovation stage
Two Major Stages at the Front End of Innovation www.planninginnovations.com Discovery (Divergence) Validation (Convergence)
More Specifically… www.planninginnovations.com Divergent Methods - Customer Problems? Trends? - New opportunities! Goal? A wide range of potential, valuable opportunities that can drive your strategic and development activities Divergence Methods Convergence Methods Convergence Methods - Evaluation, numbers, priorities - Validated opportunities Goal? A quantified opportunity leading to a valid business case to fund, kill, or shelf
Conjoint in the Innovation Process?
“ Innovation” has some unique goals:
Ability to focus R&D efforts
Necessity to understand and quantify customer needs
The need to quantify the value of technology investments
The need to investigate value/investment tradeoffs... E.g.
If we solve this… or do a better job, what is it worth to customers?
If we build this, how many will we sell over current models?
How might this new capability (or feature) canibilize sales?
Conjoint Analysis can help answer these questions more accurately than ranking or general price sensitivity questions.
Case Study: Aperion Audio Discrete Choice Conjoint www.planninginnovations.com
High quality audio
Direct to consumers
What factors drive consumer decisions?
What value do they place on certain features?
Need answers to:
Direct R&D efforts
Develop messages and promotions
Guide general direction (200+ provides statistical validity)
Online discrete choice conjoint via Survey Analytics
Targeted homogenous database: Aperion internal
All audiophiles, mostly men
57% previously purchased an Aperion product
84% completion rate
Understand preference of various subwoofer formats
Estimate the relative value of different features and functions
Provide guidance on how customers are thinking about
Relative importance of features
Value associated with features
Tradeoff Exhibits www.planninginnovations.com
Six Attributes + Price
Pictures help customer visual options
Organize similar to real world
Goal – keep levels low to minimize quantity of respondents necessary and enable simpler options
Conjoint Design www.planninginnovations.com Consistent Attribute Proving a consistent visual display of attributes and levels helps the user stay refreshed of their options. Options trade-off The core of the study is having respondents decide on a preference to a specific bundle of features at a specific price.
What Are We Looking For?
Results we didn’t expect
Which utilities surprised us? Why?
Clues to how customers are really making decisions
Which features or functions are driving real decisions?
Which features could be even further emphasized or enhanced?
Following these clues further can lead to:
Owning new positions in the market
Higher margin products and services
Clearer guidance to development efforts
www.planninginnovations.com Utilities Numerical representation of the value respondents place on each level of an attribute using an arbitrary scale. Relative Importance Based on utilities, we can calculate how important each attribute is to the respondent’s overall decisions. Market Simulations Proving a consistent visual display of attributes and levels helps the user stay refreshed of their options.
Sample Learning www.planninginnovations.com Power is critical to the decision! Almost one-fourth of the decision is based on the power rating – requires further investigation. How are consumers thinking about ‘Power’? Is this a proxy for sound quality? Frequency was relatively unimportant! Even with a wide frequency range, it was still only 5% of the consumer’s decision. Why is that? In this price range, there was less emphasis on price than expected. Certainly an area that Aperion will want to learn more about. E.g. Are they underpricing?
Considerations for Using Conjoint to Innovate
Just like all research, don’t treat results like “answers”
Results provide clues, guidance, and additional data
Identify interesting data that can guide next steps
New concepts may require further research to better understand
Triangulate! Use conjoint along with other data from online surveys, through social networking, focus groups, and expert opinion, etc.
Conducting fast, cost-effective conjoint studies early and consistently can provide a competitive advantage
Waiting until the product is “nearly complete” means results are academic or can only be used for outbound marketing
Multiple stages of Conjoint Analysis can fine-tune specific features, attributes, pricing, and promotion strategies