The conjoint process is designed to turn your objectives and desired outcomes into effective product and service strategies.
What is Conjoint Analysis?
Conjoint is a powerful approach to product development and pricing, because it’s like having countless test markets in a single study. A conjoint model can predict market outcomes from product modifications or completely new products, assess the impact on competitors, and understand how different market segments respond to those changes. The simulation model outcomes, coupled with your understanding of the realities of your business (cost considerations, operational constraints or efficiencies, etc.), allow you to make product decisions based on market insight.
The Input: Designing the Conjoint / Discrete Choice Approach
There are many ways to conduct conjoint analysis, and at Sawtooth Technologies, we believe that conjoint is both art and science. We are well versed in traditional and cutting-edge conjoint methodologies, and we have the all-important experience to know when to keep it simple and when and how to customize a conjoint design.
The approach we design for you is based on meeting your specific objectives. We start by digging deep to understand your business environment and the decisions you face. Then we design a specific conjoint approach, including technical decisions such as the conjoint methodology to use. The product or service features to be tested (“attributes and levels”) are developed and precisely worded. The combination of the conjoint methodology and attributes will result in the nuanced information you need to make vital decisions about your products and services.
The Process: Learning What’s Important to the Market
Conjoint analysis involves breaking down a product or service into its component parts—its features and pricing—in order to understand the tradeoffs the market makes among those features. In a conjoint survey, we show respondents a set of offerings—each described by typical product and service attributes—and ask which they prefer. By asking a series of these questions, and analyzing the underlying patterns of response, conjoint uncovers respondents’ true preferences—not just what they say they want, but what they prefer when they have to make choices and trade-offs.
The Output: Developing Strategies from the Conjoint Simulation Model
Based on respondents’ answers to the conjoint questions, we derive their “utilities,” or their underlying value system for the product features and pricing. These utilities become the basis for creating a simulation model that allows you to ask “what if” questions. (How will the market respond if we extend our warranty? What if we upgrade the performance of the product? What if we upgrade performance and also increase price by 10%? What if we introduce a second, lower-priced version of our product?)
The simulation model gives you the ongoing ability to assess the potential impact of possible changes to your product or service—or changes made by competitors—over months or even years.
See an example of how we use conjoint to determine optimal product strategies.