Using Choice Modeling to Supercharge Your Business by Chris Diener

New Paperback Edition

The essential non-technical guide to choice modeling, its benefits and applications

by Chris Diener, PhD, JD, MBA

Problem: As a contractor who builds houses targeted to baby boomers, you need to know what configurations work for them.

Solution: A choice modeling survey among those in your target market can tell you which features are most important to them and which are worth trade-offs. You can then find just the right combination of home plans and features in a development that will maximize your sales and minimize your risk.

Problem: Your benefits costs are out of control, but you don't know how you can cut them back without losing or alienating employees.

Solution: Do a choice modeling project among your employees and find out which combinations of benefits are most important to them and yet don't cost as much to offer compared with your current  benefit plans.  Thus, you can maximize employee retention and minimize benefits costs.

Problem: You want to know which features in desktop printers are most important to your target group of customers and how much they would be willing to pay for each package of features.

Solution: A choice modeling project can get into your customers' minds and predict which features will help sell the most product at the most profitable price. In this way you actually optimize your offer for the best bottom line impact.

Choice modeling (sometimes called choice-based conjoint analysis or discrete conjoint analysis) isn't for everyone, but its wide range of applications can help many companies optimize their new products or existing product lines. It allows firms to increase competitiveness and profitability and can provide ROI analysis of marketing decisions before you finalize them. It tells you what kinds of trade-offs your customers may be willing to make and helps analyze those trade-offs.

Chris Diener has taken the mystery out of choice modeling (or choice-based conjoint analysis), with the aim of helping marketing managers better understand how it works and how it can make a company more competitive.

Diener stresses that choice modeling more closely represents the actual decisions that customers make when they are considering purchases, especially of big-ticket items. A customer looking at new printer, for example, may consider speed, memory, print quality, price of consumables, and the price of the printer among other items. To spend less money or get better print quality. the customer may be willing to make certain trade-offs.  Choice modeling can accurately predict what those trade-offs would be.

Diener's step-by-step analysis of the choice modeling process helps uninitiated marketers decide whether a choice modeling project is appropriate for their situation, helps managers explain it to their clients and colleagues, and helps marketing executives unlock the potential of their market research investment.

This book will help executives understand the strategic power of market research. It will help managers explain the value and accuracy of choice modeling (or choice-based conjoint analysis) to their colleagues. And, it will give research salespeople confidence in explaining choice modeling to their potential clients.

As competition heats up among both domestic and global companies, it is critical to know as much as possible about what will cause customers to choose your products and services and stay loyal to you. Choice modeling will help.

(188 pp., paperback, ISBN: 978-0-9830436-0-7; October 2010) 

Contents
Introduction: A Revolutionary Approach: Know What Your Customers Want and What to Do About It

Chapter 1: Choice Modeling: The Customer's Mind
Chapter 2: Why Choice Modeling
Chapter 3: Choice Modeling, A Primer
Chapter 4: Overview of Choice Model Outputs
Chapter 5: Further Choice Model Extensions and Applications
Chapter 6: How Choice Modeling is Different
Chapter 7: The Choice Modeling Advantage, More Realism
Chapter 8: The Choice Modeling Advantage, More Accuracy. More Utility
Chapter 9: "Revolutionary" Choice Modeling Changes Everything
Chapter 10: How You Can Use Choice Modeling
Chapter 11: Summary of Advantages, Benefits, and Applications
Chapter 12: Can I really  "Supercharge" My Business Using Choice Modeling?

What people in-the-know are saying...

From the Foreword:
"I have used choice modeling several times during my career in consumer strategy. Each time, the results have proved to accurately reflect consumer preferences and to drive profitability. Choice modeling is clearly one of the more expensive types of consumer research that you might undertake, but, every time I have seen payback of those costs within a few months to easily less than a year.

"Chris Diener has not only deep expertise, but also practical experience in making choice modeling accurate and profitable. You'll find his book to be very informative on how to think about whether choice modeling is right for your needs."

         Bonnie Matosich, Corporate Brand Management
The Walt Disney Company

"Despite being one of the innovators and one of the most sophisticated users of choice modeling that I know, through this book, Chris has made choice modeling easy to understand and use. The mathematics are secondary to the ability to apply the tool to business problems."

David Sackman, CEO, Lieberman Research Worldwide

"Diener cuts through the technicality that often accompanies this subject, enthusiastically laying out the basic proposition and benefits of choice modeling. A useful handbook for business leaders and consultants looking to leverage this proven method for understanding and, critically, predicting buyer behavior. To his credit, Diener offers concrete examples and case studies, and keeps the focus on the ultimate goal of profitability."

Bryan Orme, President Sawtooth Software, Inc.