intro to conjoint analysis and maxdiff: how jetblue learns what passengers really want

Introduction to Conjoint AnalysisHow JetBlue Learns What Passengers Really Want

Qualtrics and JetBlue

Craig LutzConsulting Services LeadQualtrics

Jim O’BrienManager, Customer InsightsJetBlue Airways

Speakers

Conjoint Analysis

When to use conjoint analysis?Types of conjoint analysis?How is it conducted?What output do you get?What is the value?

Conjoint Analysis

When to use conjoint analysis?Types of conjoint analysis?How is it conducted?What output do you get?What is the value?

When we have a product/service that consists of a combination of features

Hotel room offering is a combination of many features or attributes

CleanlinessBreakfast includedBalcony/ViewWi-Fi includedCOST

Conjoint Analysis

Conjoint Analysis

Wi-F

i Free /w room

Not Included

Bre

akfa

st Buffet

Not Available

Room Service Included

Pric

e

$99 per night

$150 per night

$250 per night

$500 per night

Conjoint Analysis

When to use conjoint analysis?Types of conjoint analysis?How is it conducted?What output do you get?What is the value?

Types of conjoint analysis

Choice-based conjoint analysisAdaptive choice-based conjoint analysisSelf-explicated conjoint analysisMenu-based conjoint analysisMaxDiff (the cousin of conjoint analysis)

Choice-based conjoint analysis

Most common approachDiscrete choiceModels real-world decisions we make everyday

VS

Adaptive choice-based conjoint analysis

Can handle large feature setsCombinations adapt based on previous selectionsSurvey gets ‘smarter’ as you progress

Adaptive choice-based conjoint analysis

Adaptive choice-based conjoint analysis

Adaptive choice-based conjoint analysis

Self-explicated conjoint analysis

Direct questioning about features & levelsDeconstruct the packages into individual parts

101

Menu-based conjoint analysis

Allow respondent to choose their own packageUseful when it models the real-world experience (phone plans)

Conjoint Analysis

When to use conjoint analysis?Types of conjoint analysis?How is it conducted?What output do you get?What is the value?

Conjoint Analysis

Steps:

Determine the feature set to testExperimental designSurvey programmingCollection of responsesAnalysis & reporting

Features to includeW

i-Fi Free /w room

Not Included Bre

akfa

st Buffet

Not Available

Room Service Included

Pric

e

$99 per night

$150 per night

$250 per night

$500 per night

Experimental Design

Survey Programming

Analysis & Reporting

Conjoint Analysis

When to use conjoint analysis?Types of conjoint analysis?How is it conducted?What output do you get?What is the value?

Conjoint Analysis

We understand how important each feature isWe understand how preferred the levels are within each feature

Conjoint AnalysisFeatures Importance Score Level Level Preference Share

Cleanliness 

Extremely Clean  

Moderately Clean  

Not Clean  

Breakfast 

Not Included  

Buffet  

Room Service Included  

Balcony 

Included  

Included w/ great view  

Not Included  

Wifi  Free w/ room  

Not Included  

Cost (per night)

$500  

$400  

$249  

$179  

$99  

27%

11%

4%

19%

39%

93%

6%

1%

10%

45%

45%

35%

45%

20%

75%

25%

5%

10%

25%

25%

35%

Conjoint Analysis

When to use conjoint analysis?Types of conjoint analysis?How is it conducted?What output do you get?What is the value?

Conjoint Analysis

Closely models real-world decisions, we get highly relevant dataSimulate how product configurations will perform in market

Jet BlueCase Study

JetBlue - ConjointCredit card loyalty programs are perfect for conjoint analysis

FEATURE LEVEL 1 LEVEL 2 LEVEL 3APR 5.99%-9.99% 9.99%-14.99% 14.99%-21.99%

Mileage Bonus 15,000 20,000 25,000Blackout Dates None Major Holidays Weekends and Holidays

Free Bags 0 1 2Minimum Spend for Bonus $0 $1,000 $3,000

Conjoint attributes are example only – not indicative of actual scenario

JetBlue - ConjointWhich card is best?

Card APR Free Bags

Blackout Dates

Minimum Bonus Spend

Mileage Bonus

A 10.99%-15.99%

0 None $3,000 50,000

B 15.99%-20.99%

2 Holidays $5,000 25,000

C 10.99%-17.99%

1 Weekends $2,000 15,000

JetBlue - ConjointDiffering priorities

FEATURE APRAPR 150%

Free Bags Nope

Blackout DatesEvery day but the second Tuesday in

SeptemberMinimum Spend

for Bonus $100,000,000

Mileage Bonus 12 Miles

Evil Corporation Ideal

FEATURE APRAPR No interest. Ever.

Free Bag Refrigerator boxes too!

Blackout Dates Never

Minimum Spend for Bonus Free

Mileage Bonus One Krazilion

Customer Ideal

JetBlue - ConjointWhat is most important to the customer?How can the mix be changed to balance the interests of both parties?

FEATURE IMPORTANCEAPR 32%

Mileage Bonus 20%Annual Fee 18%Free Bag 16%

Minimum Spend for Bonus

14%

Can’t budge

Some leeway

Some leeway

JetBlue - ConjointChange features to compensate for others

FEATURE LEVELAPR 5.99%-14.99%

Mileage Bonus 15,000Blackout Dates Major Holidays

Free Bags 1Minimum Spend

for Bonus$5,000

FEATURE LEVELAPR 14.99%-21.99%

Mileage Bonus 25,000Blackout Dates Major Holidays

Free Bags 1Minimum Spend

for Bonus$2,500

Customer Ideal APR Possible APR

Same adoption as

Mistakes of Conjoint Analysis

Including too many attributes/featuresUnclear on goals at onset of projectSample size too small

Qualtrics Professional Services

Contact Information

Craig LutzCraigl@qualtrics.comConsulting Services LeadQualtrics

Q & A