Conjoint Analysis

Conjoint analysis is an obscure marketing research technique that marketers use to determine what
features a new product should have and how it should be priced.  The key is to indentify those criteria that a customer values most- and is willing to pay for- through a series of "options" (See screen shot on the left).

I have used it successfully as a strategic
consultant in turn-around situations. It’s a very useful way to determine price elacticity and
identify features or combinations of features that users are willing to
pay more for.

Transport for London sent me a request to participate in a survery
about Oyster Card users. The survey is the first time I’ve seen a
conjoint analysis behind a survey in the wild.

I think Venture Capitalists would be wise to use conjoint analysis as part of their due diligence when evaluating new products entering the market. The key issue is to identify all relevant features- some of which are lateral- which makes the process a challenge. If the conjoint analysis is well thought out, however, the results can be astounding.

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