How to discover what do your customers really want?

Previously we claimed that people fly Porter primarily because of convenience and not chicness. Also, we recommended that you could force your customers to trade off attributes so that you can find what they genuinely want. Let’s dive a little deeper and see how smart guys at Bain & Company can help you.

If there aren’t any trade-offs, virtually every attribute could be deemed as critical. Take airlines for instance. How important are direct flights? The answer is “Very important.” How about having leather seats. “Of course.” Would you like to have free wifi? “Duh!”

maxdiff-analysis

 

Let’s take a step back and try to evaluate how helpful this exercise was? Not much, huh? Now, how about asking customers to rate attributes on a scale of 1-to-5? Oddly enough, that won’t be much more useful either, for customers usually mark pretty much everything as a 4 or 5.

If your goal is to figure out what your customers truly want, then Bain & Co says that you should use the research technique called “MaxDiff.” Without going into too many technical details, let’s explain what you should do.

First, come up with a long list of product or brand attributes-things that typically represent a potential benefit. (For the olive oil, it could be colour, viscosity, taste, packaging, shape of the bottle, name, etc.)

Then, show participants a set of four attributes and ask them to select two qualities: the one they prefer the most and the one they prefer the least.

Finally, continue showing random combinations of four attributes to identify the most and least important ones. This technique is highly effective because by forcing your customers to trade-off attributes; you discover which quality is the most important, which one is the second most important etc. (If you want to learn more, watch this presentation by Bain. If you are a researcher looking for more, then read this article.)

Going back to Porter Airlines, we speculated that whatever the case may be, convenience would come first, followed by price, on-time flights, and (maybe) chicness. If anyone from Porter is reading this article and decides to conduct a “Maxdiff,” please feel free to share your results.

Today’s actionable tip: Use MaxDiff to figure out what do your customers really want.

Photo by Evan Dennis on Unsplash

7 Comments Add yours

  1. Matt Lesle says:

    In web we call this MVT, or Multi Variant Testing. It allows us to test many different combinations of designs and functionalities to understand what works best in terms of conversions, or any other pre-determined KPI. We basically crowd source the optimisation of the site. It’s cheap, and very efficient.

  2. Soydanbay says:

    Thank you Matt. I am glad to hear that what I have recommended actually works! Cheers.

  3. In principle I like the max-diff approach and understand why you have recommended it. There is something awkward about the traditional approach where every attribute comes out equally important.

    Of course, there are still reasons to be cautious:
    1> The underlying assumption is that people can tell us what is important to them in their choices. All the max-diff approach is doing is forcing people to move considerations further apart (by artificially creating a separation between the rank 1 and the rank 4 in each group of 4). If you are sceptical about the assumption… you should still be sceptical.

    2>I am skeptical that the approach always brings out the right order. The implication is that a forced choice is more thoughtful but I am not sure that this will always be the case.

    3> The differences between low and high ranked preferences may be much smaller in the real-world than is implied by the results – especially in situations where there are a couple of table stakes and a lot of other differentiators.

    The max-diff approach is clearly advantageous in sorting out product attributes but in the brand sense I am actually more interested in what drives brand ratings (a somewhat different question). In a sense, the “food served hot and on time,” which comes out on top in Bain’s analysis may be the most preferred attribute but taking this strategy only matters if you can differentiate yourself on this and if brand ratings are actually related to how well a restaurant is evaluated overall.

  4. Soydanbay says:

    Thank you Richard,

    It is great to hear from one of Canada’s leading market researchers that Maxdiff works. Regarding your comments, I would like to believe that consumers should be able to tell what is most important to them in their choices (otherwise we would be completely irrational. By the way there is a great book on this: Predictably Irrational by Dan Ariel) .

    Going back to the Porter Airlines example, I know (based on my personal experience) convenience and price lead the decision, closely followed by on-time departure. I want to believe that I should be able to make a similar ranking for laundry detergents, mobile phones or shoes.

    As per your other comment, I definitely agree that this method would exaggerate the difference among attributes. However, I think it would get the ranking of top 3-5 attributes. right. That allows us to practice “so-called” Blue Ocean Strategy”, meaning focusing on key drivers, delivering exceptionally well and reducing or eliminating all non-value added offerings.

    I will write a post on this particular subject!

    Thanks again.

  5. Soydanbay says:

    Here is a free online MaxDiff tool: http://www.micropoll.com/system/max-diff.html

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