Tim Stobierski wrote an article for Harvard Business School Online titled What is Conjoint Analysis and How Can It Be Used?
« Conjoint analysis is a form of statistical analysis that firms use in market research to understand how customers value different components or features of their products or services. It’s based on the principle that any product can be broken down into a set of attributes that ultimately impact users’ perceived value of an item or service. »
« Conjoint analysis works by asking users to directly compare different features to determine how they value each one. When a company understands how its customers value its products or services’ features, it can use the information to develop its pricing strategy… It’s a method of learning what features a customer is willing to pay for and whether they’d be willing to pay more… For example, a software company hoping to take advantage of network effects to scale its business might pursue a “freemium” model wherein its users access its product at no charge. If the company determines through conjoint analysis that its users highly value one feature above the others, it might choose to place that feature behind a paywall. »
« When a company knows which features its customers value most, it can lean into them in its advertisements, marketing copy, and promotions. »
« On the other hand, a company may find that its customers aren’t uniform in assigning value to different features. In such a case, conjoint analysis can be a powerful means of segmenting customers based on their interests and how they value features—allowing for more targeted communication. »
« Conjoint analysis can also inform a company’s research and development pipeline. The insights gleaned can help determine which new features are added to its products or services, along with whether there’s enough market demand for an entirely new product. »
« Additionally, a company may use conjoint analysis to narrow down its product or service’s features. »