Decoding Consumer Preferences: Insights into Conjoint Analysis with Robert Kazmi
Olympic Research and Strategy
Data with purpose. Strategy with impact.
In our ongoing series on market research methodologies and concepts, we're diving into the fascinating world of conjoint analysis. To shed light on this topic, we spoke with Robert Kazmi, the Director of Design and Analysis on our team, who has over ten years of experience in insights curation.
What is Choice-Based Conjoint (CBC) Analysis?
Q: Can you explain what conjoint analysis is and how it works?
Robert: "Conjoint analysis is a unique tool we use to help our clients evaluate a series of features and individual attributes. Instead of just asking consumers what's important to them, we present a series of hypothetical products and ask which one they would choose. This approach allows us to see what factors truly matter when making a decision."
Why is CBC Valuable?
Q: What makes choice-based conjoint particularly valuable?
Robert: "CBC goes beyond traditional surveys. It puts consumers in a decision-making mindset, which helps us understand their priorities better. For example, while price often emerges as a top factor, CBC can reveal other important elements that influence choices. We may also find that certain features have little impact on decisions, like 'color' or 'exclusive access to events.' These insights are crucial for clients looking to refine their offerings."
Applications of CBC
Q: How can businesses apply the insights gained from CBC?
Robert: "There are several practical applications for companies utilizing CBC. Companies can leverage these insights for product design and development, ensuring they create offerings that align with consumer preferences. Additionally, CBC informs messaging and pricing strategies, helping ensure they resonate with target audiences. It also aids in competitive analysis by revealing where a product stands in comparison to its competitors. Beyond identifying important features and attributes, we can also create a 'simulator' that projects interest and demand for a product. This simulator allows us to experiment with various scenarios, such as raising or lowering prices and adding or removing features."
Real-World Examples at ORS
Q: Can you share any examples of recent projects that utilized conjoint analysis?
Robert: "Absolutely! One project involved evaluating different checking accounts that could be offered at financial institutions. Participants assessed different checking account options each with differing fees, interest rates, discounts, and benefits. This allowed us to measure each participant’s likelihood of opening up a new checking account, and how that changed depending on which financial institution is offering that checking account. Ultimately, we were able to identify which features of a checking account are most important to consumers and how our client could best structure and price their checking account to attract new customers and new accounts.
In another project, we conducted a study on membership packages for a retail store. The store charged for membership, and they were looking at introducing different price tiers with varying levels of benefits and features. The research determined the value consumers placed on each of the benefits and features, and established the price points that consumers were willing to accept for the services received. Ultimately, our client was able to optimize their membership packages to maximize adoption rates, increasing market share and profitability."
Q: How would you say your experiences have been with CBC overall?
Robert: "My experiences with conjoint have nearly all been positive – CBC is a strong analytical tool that can really help inform product/service design, messaging, pricing strategies, etc. And its analytical base of relying on ‘choices’ to determine what is most and least important can more accurately reflect consumers’ purchase journey and their decision-making process. I have seen this used for new products that are fresh to the market, refining/expanding a product line, competitive analysis to see where a product/service stands as compared to the competition, global studies/local studies, and we have even tried out using this for unconventional uses such as message testing and brand partnership evaluation."
We would like to thank Robert Kazmi for sharing his valuable insights on conjoint analysis and its applications!
We can now demonstrate what we learned with a fun example:
Based on what we learned, let's consider the process of throwing a party. When planning, you might think about several factors: the location (home, park, venue), the type of food (pizza, barbecue, tacos), and the entertainment (live band, DJ, games). By using conjoint analysis, you could present partygoers with various combinations of these attributes and see which combination they prefer.
For instance, they might indicate a stronger preference for a home party with barbecue and a DJ, rather than a park party with pizza and games. This insight helps you make decisions that align with your guests' preferences, ensuring a successful and enjoyable event.
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