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Testing 101-Conjoint Analysis
If you’re like most businesses, you want to know what customers think about your product or service. The answers to this question are critical to your success. Fortunately, there is a technique called conjoint analysis that can help answer it. In this post, we’ll explain what conjoint analysis is, how it works, and its benefits for market research and product testing.
What Is Conjoint Analysis?
Conjoint analysis is a quantitative form of market research testing tactic that strives to understand how people make decisions about products/services. This testing method uses surveys to measure buying decisions and consumer preferences.
Conjoint Analysis is used by companies in many industries, including consumer electronics, food & beverage (F&B), automotive, retail, and healthcare.
There Are Two Main Types Of Conjoint Analysis: Choice-Based Conjoint (CBC) And Adaptive Conjoint Analysis (ACA)
Choice-based conjoint analysis questions focus on giving a customer two choices, a game of “this or that,” if you will. CBC questions include things like:
- “Would you rather eat a protein bar that tastes bad but has 0 net carbs or eat a bar that tastes great but has ten net carbs?”
- Would you rather drink a protein shake or eat a protein bar, given that the protein level is identical?
The marketer for a protein bar company could use the data from this test to improve existing products or add a new lineup of protein shakes.
Conversely, Adaptive Conjoint Analysis questions use a Likert-scale format (most likely – least likely). Participants can rate their preferences for different product features using this method.
For example, a phone company could ask respondents, “How likely are you to buy a phone with facial recognition?” They would then rate their likeliness to purchase a phone with that feature:
Least Likely Unlikely Neutral Likely Most Likely
How To Do Conjoint Testing
The main benefit of conjoint analysis is that it’s a fairly simple way to get important customer insights. To conduct this type of market research testing, you’ll need to:
- Create a defined list of product attributes
- I.e., four to five items that describe your product or service like color, size, price, and more
- Determine what your ideal audience looks like. Who do you want to answer your survey?
- Make sure to ask questions catered to that target market
- Decide which type of conjoint analysis you want to conduct
- CBC vs. ACA
- Find a platform that offers a conjoint analysis tool to build your survey(s)
- Send out your questionnaire through email, SMS, or even social media
Consider using Conjoint.ly, a Fuel Cycle Exchange partner, to conduct your conjoint analysis test. Conjoint.ly is an online service for pricing and product research using state-of-the-art discrete choice methods (conjoint analysis), Van Westendorp, Gabor-Granger, prediction markets, and other techniques. Powered by advanced analytics, Conjoint.ly brings best practices and methods in product and pricing research from full-service projects into automated tools. Its key features include generic conjoint and brand-specific protocols. Want to see it in action? Contact a Fuel Cycle rep for a demo.
Benefits Of Market Research Testing
Faster And More Realistic Than Other Methods
A conjoint analysis can be done in a matter of days, and it’s a more realistic way to understand how consumers will accept new products. In contrast, other methods often take months or years to complete and are typically used by larger companies with the time and money to invest in them.
This means that you can use conjoint analysis now—and decide based on what’s important today instead of waiting until tomorrow.
Can Isolate The Effect Of Individual Features
In a typical conjoint analysis, you are given a list of features and asked to choose which ones are important for your purchase decision. However, the feature weights are not isolated from each other. The resulting model will take account of all features together to predict your preference for one product over another.
To isolate the effect of individual features, use an econometric approach called “hypothesis testing.” This technique uses statistical tests to determine whether there is enough evidence to support a hypothesis based on observed data (such as an A/B test). In our case, we’re looking at how price or quality changes affect preferences between two or more products.
Provides An Objective, Unbiased Method
Conjoint analysis is a statistical technique that can be used to predict the likelihood of purchasing a product or service. This method is unique because it uses mathematical formulas to analyze data, producing unbiased results.
Conjoint analysis is not biased because it relies on the data, not the analyst’s opinion. The results are also objective—this means that they’re based on mathematical formulas rather than the subjective interpretation by an analyst or consultant.
Gives Accurate Results Even In Situations With Complex Products And Services
Conjoint analysis can also be used to understand how consumers will respond to new features and services on existing products. For example, if you want to know whether a new color option for your product will drive sales, conjoint analysis can help you find out.
Conjoint analysis is also an excellent way to understand how consumers will respond to new brands. For instance, you may want to know whether adding a particular brand name will boost the perceived quality of your product or service. Conjoint analysis lets you test this hypothesis in advance so that you’re prepared for when it comes time for launch or promotion!
Research Analysts Frequently Use Conjoint Analysis To Understand How Consumers Will Accept New Products
Conjoint analysis is commonly used during the product development process to predict the demand for new products or changes made to existing products. The results of a conjoint analysis can help you determine what features you should include in your next product or service offering and which are most important to your customers. This will improve your chances of success when rolling out these offerings into the marketplace.
Conjoint analysis is a quantitative marketing research method used to explore the relationship between different product design variables and the overall preference of consumers. There Are Two Main Types Of Conjoint Analysis: Choice-Based Conjoint (CBC) And Adaptive Conjoint Analysis (ACA). The most common way to conduct CBC or ACA is with digital surveys.
While conjoint analysis has many benefits, it helps businesses quantify and simplify complex decisions at a high level. The results can help companies maximize a product’s appeal or make an informed judgment when choosing between possible solutions.
The latest reports from McKinsey reflect an evolution of brand loyalty, with a whopping 39% of consumers having tried a new brand over the past two years.
Our eBook, Igniting Product Innovation: Agile Research for a Competitive Edge, can help you learn how to innovate your product offerings to stay relevant in these ever-changing times.