If you’ve ever been involved in user or product experience testing, you’ve probably heard of Max Diff. It can be used during the early stages of product development to prioritize features and ensure they’re aligned with customer needs. Max Diff is a quantitative method for understanding customer preferences. It helps you identify important product features and prioritize them, so you can make informed decisions about which to develop and market first. This article will define Max Diff, explain how it works, and explain why/when you should use it.
What Is Max Diff Analysis?
Max Diff is a statistical method that uses mathematical models to identify a product’s or service’s most important features. Max Diff performs feature prioritization, identifies key customer preferences and satisfaction drivers, and guides new or improved product design based on data.
Max Diff is often confused with rating scales that ask respondents to rate the importance of product features, i.e., a 1 (not at all important) to 10 (extremely important). A Max Diff survey asks participants to make tradeoffs among groups of product features or ideas.
Conducting A Max Diff Study
For a restaurant, these “sets” could include “price, customer service, cleanliness, or healthy options.” Customers would then choose which option is “Most important” and which is “Least important.” Research participants would then continue this exercise for many sets of features, up to a total of 25. During Max Diff, consumers will see every product or service feature, but not every combination.
Scoring A Max Diff Study
To score a Max Diff study, researchers will record the number of times each feature was rated “most important” and combine it with the number of times it was rated as “least important.” This calculation will determine the “maximum difference” of ratings or “Max Diff score.” The “average” index score is revealed after each Max Diff score is indexed around 100.
According to Versta Research, “a score of 100 is always the average, scores above 100 are always above average, and scores below 100 are always below average”.
Respondents may rate many (or even all) features as important, but the Max Diff score allows you to see which are relatively more important/useful.
Understanding these differentials allows you to identify the most important attributes in overall preference ranking.”
When & Why To Use Max Diff?
Feature Prioritization
Max Diff surveys are ideal for answering the question, “What do my customers want?” For example, restaurant customers may prioritize price over other options when looking for a place to grab dinner. Max Diff allows brands to see “what” they need to prioritize but not necessarily “why.”
Researchers can clearly understand customer motivations by combining Max Diff with a qualitative research method. Qualitative market research involves collecting real human insights via in-depth interviews, focus groups, observations, and videos. Customers may prioritize price over other restaurant features because they eat out weekly but also want to save money.
Customer Preferences
Beyond answering the “what?” questions of product/service features, Max Diff can be used to inform overall business strategy and priorities. With a clear set of customer preferences, businesses can decide which products to launch or tweak and which ones to put on the back burner.
Essentially, Max Diff shows executives the “which” within the “what.” For example, while all customers may like healthy menu options, if pricing is ranked higher, a restaurant chain could move ahead with a new “10 under $10 menu” versus a “Healthy & Fit menu.”
The Max Diff method gives customers a voice in product and service launches or re-designs, ensuring customer satisfaction and delight.
Needs-Based Segmentation
Needs-based segmentation consolidates users based on their pain points, problems, needs, or motivation. Needs-based segments are critical to businesses as they help them determine what needs a new product or service has to satisfy.
Max Diff analysis can help you determine what these needs and segments are. Standard segments are age groups, gender, and geographic location. However, these segments may be traits like “frugality” and “health consciousness” on a product level.
Drawbacks Of Max Diff
Although Max Diff analysis is a great method for evaluating features and customers’ preferences, it is not a perfect method without drawbacks. Like any research method, it should not be used as a complete source of information.
Here are some common mistakes to avoid when using Max Diff:
- Remember not to have research participants evaluate more than 25 separate features or pain points, as they may become bored/overwhelmed
- Have beta testers test your survey to ensure all feature “sets” are clear and understandable
- Researchers should work with a product manager to prioritize what features should go into the survey
- Max Diff is not great for answering “why” customers prefer one feature over another, so to get more insight, combine it with a qualitative study
Wrap Up
In short, Max Diff is a powerful tool for uncovering hidden insights in your market and should be considered an option if you want to improve your products or services. Max Diff shows business leaders which product features customers prioritize/prefer and guides new or improved product design based on data.
The Kano Model is a set of ideas and techniques that help product managers determine customers’ satisfaction with various product features. It can help you identify what your customers expect from your products, understand which features boost satisfaction, and even discover how your product could go above and beyond to surprise and delight.
Download our Kano Model infographic here.
Ready to put the Kano Model to work for your business? Ask your Fuel Cycle representative about our Feature Prioritization Ignition solution. Feature Prioritization uses the Kano Model to categorize features from must-haves to those with little impact.