Analytics from the Outside-In

The trend continues as consumers seek and demand high-value from products and services at the lowest possible price. The advancements in digital technologies and mobile apps will continue to shape consumers’ preferences and expectations in all markets and industries. They want personalized products that fit their lifestyles. They want services that change as they change. They want conveniences that contribute to a higher quality-of-life.

As consumers’ appetite and attitude toward digital technologies are in constant change and readiness, how can manufacturers respond? As social media platforms shape and form consumers’ perceptions on a daily basis, how can manufacturers react?

Data Science in B2B

Developed by market researchers in the 1970s, conjoint analysis has been widely applied in the new product design process. An analytical and quantitative tool, conjoint analysis seeks to evaluate customers’ preferences toward products and services, as well as a company. Customers tend to evaluate key attributes as a whole—the ‘bundling strategy’ message of a one-stop-shop has created this sum-total thinking. A good example is the Net Promoter Score (NPS) that measures total customer experience.


Conjoint analysis overcomes the shortcomings of NPS by evaluating and measuring key attributes individually, rather than whole. For example, TechPlus Inc (TPI) is a contract manufacturer of custom-engineered metal stampings. They serve OEMs in vertical industries of aerospace, military, medical, agriculture, and transportation. TPI prides itself on high-quality, on-time delivery, and excellent customer service.

Last year, however, the company sales decreased 7% or $4.5 million. Their industries, however, had growth in all segments.

TPIs marketing executive decided to use conjoint analysis to uncover its customers’ purchasing motives, that were identified through explorative qualitative interviews. He also used cluster analysis to segment its customers for future design of marketing strategy.

Respondents were asked to rank their preferences on eight TPIs core capabilities: quality, delivery, price, design, prototyping, lead-time, packaging, and customer service. The results indicated that TPIs customers wanted them to adopt a lean philosophy, to be ISO certified, and to replace its outdated ERP system. These three areas had the greatest influence on their customers’ buying intentions.

Interestingly, the study uncovered missing capabilities that were not even apparent to TPI. Their sales team always sold on quality, delivery, and price. These attributes, however, are readily available and accessible from competitors. TPIs customers wanted them to offer manufacturing processes that are both agile and flexible—adopt a culture of quick response and project management. These capabilities will evolve as a result of deploying lean, ISO, and ERP.

Using the results from the conjoint analysis, TPI decided to invest in their future. They also developed a strategic procedure to periodically survey their customers' preferences—by adopting an intense outside-in focus, TPI found a way to create and deliver new value to its customers.

Hartwig Consulting

© 2019 by Kurt  H Hartwig