|Question:||I've heard about conjoint analysis as a technique. What is it for?|
|Answer:||The heart of your question really has to do with understanding how customers make tradeoffs. Understanding tradeoffs is one of the most important aspects of consumer behavior when it comes to selling a product. Conjoint Analysis is a technique to understand how customers make these tradeoffs.|
What makes conjoint so useful from a practical sense is that the data you require is ranking data. That is, you just need to know how customers would rank various product configurations, rather than asking them for their specific preferences for various benefits or attributes. These preferences "unfold" upon examination of customer rankings.
This analytical technique can also be used to understand how customers make tradeoffs in benefits, and thereby can be used to ultimately segment a market. Conjoint analysis is also useful for understanding how customers make tradeoffs in attributes, and this can be highly useful in designing products, understanding price sensitivity, and examining other practical issues.
For more on conjoint analysis, and for a demonstration of this technique, see our tutorial.