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MaxDiff Analysis/Best-Worst Scale for Market Research
Understanding what consumers like is super important for businesses. It helps companies to make great products, set the right prices, and plan how to reach customers. One powerful tool to figure this out is MaxDiff Analysis, also known as Best-Worst Scale. It's like a super detective, giving companies really valuable insights into what people prefer. MaxDiff is often better than other methods like Direct Ranking or Likert Scales it captures the smaller differences effectively . Conjoint Analysis is strong too, but it's not always the best fit for every situation and can take up a lot of time and resources.
What is MaxDiff Analysis?
MaxDiff, short for Maximum Difference Scaling, is a research technique used to gauge preferences among multiple items. It helps in identifying the Most and Least important features or aspects among a given set of choices. Rather than asking respondents to rank items directly, MaxDiff presents them with Subsets and asks them to indicate the most and least preferred options.
What are the benefits of MaxDiff Analysis?
Efficiency and Accuracy
MaxDiff efficiently handles a large number of items, providing a more accurate assessment of consumer preferences compared to traditional ranking methods.
MaxDiff helps in understanding the relative importance of each item within the choice set, offering deeper insights into consumer decision-making.
Reduced Respondent Burden
By breaking down the evaluation into manageable subsets, MaxDiff reduces respondent burden, leading to higher response rates and improved data quality. It's simple for respondents to evaluate a subset of 4 or 5 attributes and pick what is least and most preferred. For most market research surveys, a ranking question is inefficient for respondents to evaluate. When there are ten attributes to rank, it becomes increasingly difficult to rank items accurately, leading to fatigue and lower quality data.
MaxDiff Forces a respondent to pick what is least important and most important. Respondents will likely rate all features as important if separate rating questions or a matrix are used instead of MaxDiff. This drawback could be referred to as "List Order Bias." In that scenario, an organization wouldn't have the data needed to maximize the budget; the company would use resources in areas that aren't truly important.
How to set up a MaxDiff Question in BlockSurvey?
Let us consider an example where you wanted to know what facilities customers look forward to for their stay at a resort, BlockSurvey's Max Diff Question can be be used as follows to identify customer preferences.
1. Select the MaxDiff Question component from under the Market Research Question group.
2. Edit the data labels. For example, instead of default "Most", you could use "Most Important" or "Highest Priority." The custom labels will show throughout the survey and in your survey results.
2. Next add relevant Attributes to your MaxDiff Question. In the above example of the resort, facilities, ambience, services offered by them such as "Security", "Swimming Pool", "Entertainment Facilities", etc. become the Attributes.
3. Generate Subsets of Attributes for respondents to evaluate.
The subset generation depends on the following two factors set by the survey creator:
- Number of attributes per set
- Number of times each attribute should roughly repeat in the question
Suppose you want 4 attributes per set and each attribute to roughly repeat 4 times. Based on this you will see that BlockSurvey generates 8 sets to be shown to the respondent. BlockSurvey randomizes Attributes when showing multiple sets and has a system to ensure Attributes display as evenly as possible which helps prevent respondent fatigue.
That's it. Your MaxDiff Question set up is complete and ready to roll!!!
How To Analyze MaxDiff Data?
BlockSurvey offers a Simple Count Analysis and ranks answers based on a simple score, which is computed using the below formula:
Following inferences can be drawn from the analysis:
- The higher the score, the more appealing an attribute is to your audience.
- A positive score means that the attribute was selected as MOST appealing more often than LEAST appealing.
- A negative score means that the attribute was selected as LEAST appealing more often than MOST appealing.
- A score of zero means that the attribute was chosen as MOST and LEAST appealing an equal number of times OR it has never been chosen.
Analysis of the data collected for the above example shows that Entertainment Facilities offered by the resort had more appeal with the customers than say the Cleanliness of the premises; Complimentary Breakfast offered by the facility had the least appeal and so forth.
What are some applications of MaxDiff Analysis?
MaxDiff analysis finds applications in various domains, including product development, pricing strategies, brand positioning, etc.
When developing a new product or enhancing an existing one, understanding consumer preferences is vital. MaxDiff can help in prioritizing features, attributes, or benefits that are most valued by the target market, assisting in informed decision-making.
Determining the optimal pricing strategy is often challenging. MaxDiff allows businesses to identify the price points that consumers perceive as reasonable or attractive, aiding in setting competitive prices that resonate with the market.
In the competitive market landscape, positioning a brand effectively is crucial. MaxDiff helps in identifying the unique selling propositions (USPs) that resonate most with consumers, enabling brands to craft a compelling and differentiated brand positioning strategy.
MaxDiff Question offered by BlockSurvey is simple, efficient and accurate and makes it a preferred choice for businesses seeking to decode consumer preferences efficiently and effectively. It streamlines the decision-making process, enabling organizations to make data-driven strategic decisions that resonate with their target audience. Ultimately, BlockSurvey's MaxDiff analysis elevates the level of market understanding, giving businesses a competitive edge in an ever-evolving market.
MaxDiff Analysis/Best-Worst Scale for Market Research FAQ
What is MaxDiff/Best-Worst Scale in market research?
MaxDiff, also known as Best-Worst scaling, is a research method used to measure preferences by asking respondents to choose the best and worst options from a set of alternatives.
How does MaxDiff/Best-Worst Scale work?
In MaxDiff, respondents are presented with a list of options and asked to select the best and worst options in each set. This process is repeated multiple times, allowing for the ranking of preferences based on the frequency of selections.
Is MaxDiff/Best-Worst Scale an effective research method?
Yes, MaxDiff is widely regarded as an effective method for measuring preferences. It provides more discrimination and better insights compared to traditional rating/ranking scales.
How can MaxDiff/Best-Worst Scale benefit market researchers?
MaxDiff helps market researchers gain a deeper understanding of consumer preferences, prioritize product features, identify market segments, optimize pricing, and make data-driven decisions.
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