How to use MaxDiff analysis

If your business is successful, there are bound to be plenty of things about your products and services that your customers like.

Yet there are times when it’s important that you know what those customers value the most—even love—above all else that makes them loyal and repeat customers who readily sing the praises of your brand.

That’s where MaxDiff analysis can be your go-to tool for market research. The methodology provides useful data about your customer preferences so you can make sure you are meeting their needs and exceeding their expectations through ever-improving products and services.

MaxDiff analysis is an analytic methodology used to gauge survey respondents' preference score for different items that results in a best-worst ranking of those attributes.

With MaxDiff analysis, you can identify customer preferences based on lists of attributes or features for just about any product, service, or issue. So, if your company makes exercise equipment, you could conduct a MaxDiff survey asking respondents to choose what they like best about your treadmills such as quietness, online coaching, health metric electronics, or portability. The same type of approach could be used by a hotel chain seeking to learn what’s most important to customers during a stay, or a clothing retailer wanting to identify what customers appreciate most during an in-store shopping experience.

Gaining this insight through a survey using MaxDiff design can be the key to making better, more informed decisions and investments that can help drive growth—and prevent you from costly missteps based on assumptions that aren’t backed by data.

MaxDiff analysis works by forcing people to choose the most and least important attributes from a list they are provided in a survey. By respondents being forced to choose based on a MaxDiff survey question, they can do some heavy lifting for you by identifying what’s likely most important to most customers.

In this way, a MaxDiff design goes beyond standard rating questions that only ask people to provide feedback about the degree to which they like or dislike a product, service or specific feature, or questions that simply ask respondents to identify what they like without forcing them to identify which they value the most.

A potential challenge with those types of surveys is that people typically like many features of a product or service. But without insight on what they like the most, it’s difficult to make decisions and tradeoffs on what to invest in or improve.

Let’s use the hotel example again. There are likely a whole slew of amenities that your guests appreciate. They may like the convenient location, free breakfast, unlimited wi-fi, valet service, comfortable beds, and the full-scale gym with an indoor pool.

As a hotel operator, the fact that there are many features that customers like is great. After all, it only helps to enhance your overall customer experience, which leads to great reviews, return guests, and positive word-of-mouth buzz.

But say that business is so brisk that you now want to open another similar hotel in another section of the same city. Your budget and resources aren’t unlimited, and you want to make sure that you get the maximum value out of the new location by attracting the most traffic from your target audience. This is an instance in which MaxDiff analysis can work its magic.

After you determine the group or groups you plan to get feedback from, you can then create a MaxDiff survey that will give you greater insight into the amenities and services that members of that group value most.

From this survey you should get some instructive insights that can help guide your decision-making about the new hotel. For instance, you may find that the location with easy access to downtown is by far the most favored feature among the group you are surveying. Based on that insight, it may make sense to pay more for a location on some prime real estate that will allow guests to readily access the downtown district.

Yet, if “free” is what triggers the most positive response from your guests, then it’s worth considering investing less in location and other nice-to-have amenities so you can focus on offering free breakfast, wi-fi, and parking.

By forcing your respondents to choose, they have helped make choosing your own priorities that much easier.

You can also put a MaxDiff survey to work to help you figure out what features to prioritize in a product or service.  

For instance, when it comes to product development, MaxDiff can be a great tool in the process of developing an entirely new product, or creating an upgraded or “new and improved” version of an existing product for which sales may have flatlined recently. For example, maybe you’re a bakery that offers bagels, pastries, and other baked items. A recent trend of low-carb diets has you thinking that your customers are prioritizing healthier choices.

That’s the logical conclusion—but is it the right one? MaxDiff analysis can help you find out. So you could ask customers to rank the features they like best about your products, listing options such as:

If your initial hypothesis is correct then it would make sense to explore how to expand your low-carb and healthy options to better satisfy existing customers and hopefully attract new ones.

But say that your results come back and they end up in the following order, from most liked to least:

These results offer up an entirely new, and unexpected, insight. Based on the responses, it appears likely that the majority of your customers aren’t hyper-focused on healthy choices when they shop with you. Instead, perhaps they see your products as their go-to choice when they are simply looking for some great tasting baked goods, or even as a sweet reward for making healthy choices in other aspects of their lives.

In this example, if it weren’t for MaxDiff analysis you may have gone all-in on revamping your menu so it features a broader range of health-conscious and low carb products. That would have been a costly mistake if it ends up turning off your best customers, who may decide to take their business to Krispy Kreme.

Let’s assume you have a new product with a long list of great features.

That’s great, but it also raises the question: Which features should be emphasized in your product offering? 

In other words, you’re looking to showcase the most compelling aspects of your product in your advertising and marketing that will resonate most effectively with your target audience of prospects and customers.

Advertising demands focus—you only have an instant to catch interest and deliver your most compelling message. Consider an unscientific experiment by marketing expert Ron Marshall, who set out to see how many ads he was exposed to during a typical day. Marshall bailed on the experiment almost before he started when he counted 487 ad messages before he even had finished breakfast.

So yes, knowing which ad claims will resonate most effectively with your target audience is essential. And a great way to find that out is via a MaxDiff analysis. You can craft different messages highlighting various features of a certain product you are advertising, and then survey customers to see which ones resonate best with them. So if you aim to pitch a new cleaning product, some messaging choices might be:

Advertising dollars are typically tight, and the feedback that you get from a survey question such as this can help you nail down the most effective message. Also the next-best supporting messages for longer ads or marketing content.

Segmentation is nothing new in marketing. It’s all about sorting through your customers and grouping them in logical ways to better target them while meeting their product needs. Common ways to segment might be age groups, gender, geographic location or by products customers tend to purchase.

This segmentation is useful, but it doesn’t typically get to the core of what motivates your customers actions and decisions. Needs-based market segmentation fills that gap by segmenting your customers based on their underlying attitudes and behaviors. MaxDiff analysis can help identify the traits and priority needs driven by these attitudes and behaviors so you can then tailor your efforts and messaging to meet those needs.

For instance, a needs-based MaxDiff survey for a new kitchen blender might ask if the main motivation for those being surveyed is either:

In this instance, if the most important need by the majority of respondents is focused on convenience, then your efforts will likely be best spent emphasizing the ease and speed of the product—and future product enhancements can be focused on amplifying that convenience.

Clearly MaxDiff analysis can make a huge difference by getting to the heart of your customers top preferences, and then providing actionable data to help guide your focus and decisions. These key benefits include:

There are potentially a few challenges with MaxDiff analysis as well. Among them:

MaxDiff is one of several market research methodologies aimed at identifying and ranking customer preferences to produce best-worst data. Here is a breakdown on how MaxDiff analysis differs from other common methods: 

Armed with greater awareness of what MaxDiff analysis is, how it can benefit your market research, and its pros and cons, you can now get busy getting a better data-driven read on your customers preferences.

The more you know about what they like and value most, the better equipped you are to keep customers happy and attract new ones to grow your brand, and your business.MaxDiff analysis can play a key role in strengthening your brand. Work with SurveyMonkey’s expert research team to use MaxDiff to prioritize features and optimize your product.