MaxDiff: A New Way to Prioritize Benefit Statements
MaxDiff is a great methodology for prioritizing benefit statements. You’ll learn which statements resonate most with your market.
The MaxDiff technique identifies the best of many alternatives. While MaxDiff fits easily with concepts, product features, packaging, and branding options, our focus here is on using MaxDiff to prioritize benefit statements.
You want to reach your audience with a powerful message of what your product or service delivers. MaxDiff can help. MaxDiff provides a clear understanding of market preferences and priorities.
The structure of a MaxDiff survey is straightforward. Survey respondents are presented with a set of items (here, benefit statements) and asked to choose which is most important and which is least important. Dozens of items can be tested, but the task is manageable, because respondents consider only four or five items at a time. An example MaxDiff question in the retail banking industry follows:
A respondent will answer a series of questions like these that mix and match various combinations of the items. Based on the pattern of responses across these questions, MaxDiff scores are calculated for each respondent. The outcome is a MaxDiff score for each item that indicates both absolute and relative importance.. Results may be analyzed overall and by segments of interest (e.g., company size, demographic segments, etc.) in order to determine priorities.
The following are illustrative MaxDiff results for retail banking:
The MaxDiff scores add to 100. The top rated benefit statement is “Has the most ATM locations.” So this statement is the winner, right? Well, it depends.
MaxDiff Results by Segment
The results of a MaxDiff study have even more value when they are segmented by groups of customers with similar needs. The result is an understanding of how the market is segmented into groups of people who place similar value on the tested alternatives, allowing you to identify and target strategic market segments.
The example MaxDiff results above are the average for the total market. However, needs differ across individuals in a market. Using statistically-based segmentation techniques to identify groups of customers with similar needs, we can then we profile those customer groups on behavior, attitudes, and demographics.
In our retail banking example, suppose there are three market segments, characterized by convenience, service, and price. How do the results in MaxDiff scores for the various benefit statements differ by segment?
Here is a simplified example segmentation scheme for retail banking:
Selecting Target Segments
So, is “Has the most ATM locations” still the winning benefit statement? It is worth examining several factors:
Which segment is largest?
Which segment is most aligned with your brand and product strengths?
Which segments can you own? Which segments does the competition own?
Once the target is selected, the winning message becomes clear. The target segment may be reached effectively by communicating a benefit statement of real value to that segment.
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