An old method for finding new headroom: Using conjoint analysis to shape organic growth

Published: December 20, 2010

Executive summary

For 30 years, conjoint analysis has been one of the most widely used tools in market research. Its methodology of getting survey respondents to say which products or product attributes they value — done as a tradeoff between two or more options and repeated in enough combinations to yield a reliable ranking of each attribute’s importance — has allowed hundreds of companies to make well-informed decisions about which product features they are going to offer, in what combinations, and at what price.

But it turns out that conjoint analysis is also extremely well suited to doing customer segmentation work. And in more recent years, some companies have used conjoint to develop an aerial view of their prospective customers — the categories they fall into, the needs they have, the likelihood that they might become bigger (or smaller) sources of revenue. For some of the companies that have used it this way, conjoint is emerging as a strategic tool, providing actionable intelligence they can use to inform organic growth strategies.

This report offers three examples of this more strategic application of conjoint methodology. First, it shows how a luxury goods manufacturer used conjoint analysis to reposition itself to get more business from its most desirable customer segments. It also shows how a European bank used conjoint to prepare itself for an expected regulatory change; the bank also ended up with the insights needed to reposition a whole section of its product line. Finally, it shows how one of the world’s biggest and most successful newspapers — the Wall Street Journal — used a variant of conjoint to add younger readers and get a larger share of the advertising market.

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An old method for finding new headroom: Using conjoint analysis to shape organic growth

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