An Introduction to MaxDiff
This is the first post in a planned series about MaxDiff. Guest Expert, Tim Daly, an Assistant Professor of Marketing at United Arab Emirates University, contributed this piece.
You can reach Tim directly via email at email@example.com and on Twitter @tmdalyu
Part 1: Introduction to MaxDiff
Hidden away at the bottom of the Matrix Table options is the MaxDiff question type. This low-key entrance belies the usefulness and power of this recent addition to Qualtrics Research Suite. In this and subsequent posts, I will give you a researcher’s guide to what, when, why and how to use this questioning technique. At this stage, it is important to acknowledge the developer of this technique, Professor Jordan Louviere, whose team at Centre for the Study of Choice (at the University of Sydney) are the world leaders in this technique.
Why should you be interested?
To illustrate, I will use a tourism-related marketing problem, and outline the differences we get using traditional rating scales compared to MaxDiff (by the way, this is based on my time working in the tourism research industry).
So, let’s say that my objective is to determine the two destination attributes (I don’t have a big marketing budget!) that are most important to my potential visitors when making their vacation choice. For this example: indulgent luxuries, quality beaches, cultural activities, unique cuisine, interaction with local wildlife, nightlife, and shopping.
Now of course, I can go ahead and ask respondents to rate the importance they place on the features I have identified (on our beloved 1 to 7 scales). However this often results in heavily skewed data, with people generally placing reasonable to high importance on the majority of features (sorry wildlife but if you’ve seen one koala you’ve seen them all). After all, we haven’t asked them to make a trade-off, so they don’t. So, as I so often ran into, everything is important. Not a great deal of insight there unfortunately.
Using the MaxDiff method however, we can get substantially more useful information (in subsequent posts I will explain the implementation and analysis of MaxDiff). The data we obtain through this method DOES require the trade-offs that we need, because we ask them to make choices. Hence we obtain not only greater discrimination between all of these appealing attributes, but the relative* degrees to which they are seen as important decision factors. So by being a little daring and different, we actually determine where to spend our resources, and we can be confident in our strategies.
OK, so what is it?
MaxDiff (otherwise known as Best-Worst) quite simply involves survey takers indicating the ‘Best’ and the ‘Worst’ options out of a given set. Implemented within an appropriate experimental design (I will get to that in a subsequent post) we can obtain a relative ranking for each option. As a simple example, if I asked you to pick your most and least important factor (from our previous example) when choosing your next vacation destination, it could look something like this:
Now this is a very simple and quick decision to make, and now we know that Shopping > Luxury & Culture > Wildlife. The next set in the design would look like this, as you can see some similar items and also some new items.
From this set we know that Beaches > Shopping & Nightlife > Culture. As the user progresses through the sets in the design, we get a fuller picture of what is most important, what is least important, and everything in between.
When and why?
What we are looking for here are situations where trade-offs or choices are required (so for instance, satisfaction surveys are generally not particularly well suited to this technique). If I want to know the relative preference for a type of soda, or the relative importance of various product or service attributes, then we are absolutely in business. Notably, this is an area when ratings scales often fail to truly differentiate, and researchers fail to notice!
* You will notice the word relative being used a lot. That is because the choice of attributes that the researcher makes constrains the information to be bounded by these attributes. Thus this places the onus on the researcher to be both discerning and careful in which attributes go into the task…not a bad thing really.