SKIM conference presentation 2011 about Menu Based Conjoint
Nicole Huyghe (solutions-2) and John Irwing (TalkTalk) discuss a recent study where the innovative MBC technique was applied. Subject of the study was the offering of digital tv.
For more info: check www.solutions2.be.
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SKIM congress Vienna 2011 - MBC by solutions-2 and TalkTalk
1. Optimisation of Digital TV offering through Menu Based Conjoint
John Irwin (TalkTalk) / Nicole Huyghe (solutions-2)
SKIM conference, 28 Oct 2011
2.
3.
4.
5. SET TOP MONTHLY
BOX PRICE FEE
INSTALLATION CONTRACT
CHARGE LENGTH
6. Originally just Essentials Expanded to include Plus & competitors „Inclusive‟ content
TalkTalk TalkTalk Plusnet BT Sky Virgin
Product Unlimited broadband
Unlimited L BB + XL Phone +
Essentials Plus and calls + Friends & Extra Anytime
Anytime Talk Mobile
Family Mobile
Speed Up to 24MB Up to 24 Mb Up to 20 Mb Up to 20 Mb Up to 20 Mb Up to 10 Mb
Inclusive calls 0870/0845 Free 0870/0845 7p fiat 0870/0845 25% 0870 25% 0870 Inclusive
cals rate on calls to discount on calls to 0870/0845 discount on calls calls to Virgin
to IT customers Mobiles mobiles to mobiles mobiles
Monthly £22.30 £28.30 £35.47 £51.40 £40.25 £41.00
Connection fee FREE FREE £0.00 £0.00 £0.00 £667.50
18 month total £372.15 £465.90 £643.45 £901.20 %688.50
18 month savngs with £177.55
£435.30 £222.60 £201.60
TalkTalk
HomeSafe network
security
Generous download
allowance
Will never restrict your
speed
Unrestricted streaming
Free calls to 3.5+
landlines
Calling Circle
UK’s best value mobile
calls
Intern. calls add-on
Speed Dial
Fibre Available
Other information Free security for 3 12 months free
- - - -
months security opt-out
9. Business questions
Optimum core YouView package?
Impact of bundling inclusive content in core
package?
Bundling by size or genre?
Take-up of bundles?
Price sensitivity of bundles?
10. The research flow
STEP A Core tv packages
STEP B Channel composition/take-up
2 TV package offers
Channels in core package
Channel bundle: size/genre
Bundle interest
Price sensitivity of bundles
15. RESEARCH PROCESS
Sample with size
2 core TV offerings Familiarising
bundles
Bundle concept Sample with genre
Inclusive content
and composition bundles
CORE STATED MENU BASED
OFFERING PREFERENCE CONJOINT
16. Core offering via basic questions
CORE choice between 2 core TV offerings
OFFERING preference of free channels
17. Based on the video you have just seen and the description you have just
read, which, if either, of the folling packages are you most likely to take if
TalkTalk offered YouView as part of a home phone, broadband & TV service?
Set top box - £X1
Essentials package - £X2 per month
Installation charge - £X3
Contract length - Y months
Set top box - £X4
Essentials package - £X5 per month
Installation charge - £X6
Contract length - Y months
I would not take either of these packages
18. Assume that the package just selected was offered with [Inclusive
content] A (at no extra cost), would you still be interested in this pack?
All details of the pack are outlined below.
Set top box - £X1
Essentials package - £X2 per month
Inclusive content – A
Installation charge - £X3
Contract length - Y months
I would no longer be interested in this
package
20. Please read the discription below for the Kids pack carefully. Please read the description below for the Entertainment pack carefully.
Focussing just on the channels that are included in this pack & ignoring the Focusing ojust on the channels that are included in this pack & ignoring the
cost for now, please indicate how interested you are in subscribing to this cost for now, please indicate how interested you are in subscribing to this
channel pakc. channel pack.
STEP 1: CORE OFFERING
Please use a scale of 1 to 5 , where 5 means that you are extremely interested
in subscribing to this channel pack and 1 means that you are not at all
Please use a scale of 1 to 5, where 5 means that you are extremely interested
in subscribing to this channel pack and 1 means that you are not at all
interested in subscribing to it. interested in subscribing to it.
STATED
PREFERENCE
21. 10 tasks
MENU 4/5 channel bundles
BASED 5 price points per bundle
CONJOINT Split sample(size vs. genre)
n=500 per sample
22. On the next ten screens, you will see all of the additional channel packs together with the TalkTalk home
phone, broadband & TV packages you have indicated you are moest interested in. The monthly price for each
channel pack wll vary from screen to screen and we would like you to indicate whether or not you would
subscribe to each channel pack at the price you see.
If you are not interested in any of the channel packs at anly of the given prices, please tick ‘None of the above’.
23. Below you will see the TalkTalk home broadband & TV package you have indicated you are most
interested in together with all of the additional channel packs at different monthly prices. For each channel
pack, please indicate whether or not you would subscribe to that channel pack at that monthly price.
If you are not interested in any of the channel packs at anly of the given prices, please tick ‘None of the
above’.
Set top box - £X1
Essential packages - £X2 per month
Inclusive content – A
Installation charge - £X3
Contract lenght - Y months
Entertainment pack £X1 per month
Hollywood TV pakc £Y2 per month
Knowledge pack £Z3 per month
Kids pack £V4 per month
Music pack £W4 per month
None of the above
TOTAL MONTHLY PRICE £Z
25. ANALYSIS APPROACHES
SERIAL
VOLUMETRIC CROSS- EXHAUSTIVE
ALLOCATION EFFECTS ALTERNATIVES
26. Predicts “volume” rather than choice
Total volume = number of items shown + none
VOLUMETRIC Results in a % likelihood to buy
ALLOCATION
Focus on marginal effects
Felt counter-intuitive (total %likelihood >100%)
27. One model for each channel pack
SERIAL CROSS Models marginal effects <->
EFFECTS combinations
28. Models all possible combinations of channel packs
e.g. with 4 channel packs : 24 = 16 combinations
e.g. with 5 channel packs : 25 = 32 combinations
EXHAUSTIVE Effect of each combination + marginal effects
ALTERNATIVES One model
More realistic approach of decision-making
Estimation time still ok
29. Exhaustive alternatives: results
Utilities for the desirability of each combination:
similar pattern as the count analysis
EXHAUSTIVE Prices – count analysis:
ALTERNATIVES All channel packs were quite price sensitive
BUT:
Utilities of the price levels showed less
differentiation and constraints were needed
31. Logical interview process &
answers!
Simple programmming exercise
EXHAUSTIVE Analysis : intensive exercise
ALTERNATIVES Which model to use?
CSV file
Dummy variables
Covariance matrix
Matching utilities with counts results
32. Actionable findings
Low cost set top box & higher monthly fee
vs. higher cost set top box & low monthly fee
Impact off inclusive content on set top box
EXHAUSTIVE choice
ALTERNATIVES
„Buy through‟ by:
• Content model
• Pay TV vs Freeview households
• Set top box choice
TT is a value phone & broadband provider with about 4 million customers in the UK. A small TV base was acquired when we took over Tiscali in 2009 but to all intents & purposes, TV is a gap in our offering. This is why we joined YouView in 2010.
The YouView VentureYouView is a new and exciting digital TV service launching in the UK next year and is a joint venture between some of the UK’s biggest names in TV and broadband, including the BBC, ITV, Channel 4, Channel 5, TalkTalk and BT.
Everything TV should beYouView will bring TV lovers all the Freeview channels they are familiar with, plus ‘High Definition’ (HD) channels from the BBC, Channel 4 and ITV, with 7 day catch-up services from BBC iPlayer, ITV Player and 4oD, all available instantly on your TV. What’s more, whilst standard TV guides only show you what’s on now or later, the YouView TV guide will also go back in time 7 days. So you can watch programmes that were on yesterday or even last week, whenever you want to watch them. And with the ability to pause and rewind live TV and record up to two different programmes at once – single episodes or whole series at the touch of a button - it means, you’ll never miss the TV you love. Getting YouViewAll you need to enjoy YouView is one simple set-top box, which you’ll be able to get through one of YouView’s broadband partners, or you can buy it directly from a high street department store and connect it to your existing broadband connection yourself.
We initially worked with Solutions2 to understand the relationship between set top box price, ongoing monthly fee, installation charge & contract length amongst our Essential customers. Unsurprisingly this showed us that set top box price & monthly fee had more of an influence on choice than engineer set up charge or contract length. What it also showed was that although most Essentials customers would opt for a lower cost set top box & a higher monthly fee, some customers preferred a higher cost set top box & have a lower monthly fee. That is, to maximise our share we should offer more than one set top box/ monthly fee combination.
We then did a second piece of research to:1) Reaffirm Essentials customers willingness to upgrade to TV at 2 price points2) Test Plus & competitor customers willingness to take TV at 2 price points3) Work out impact on uptake if some inclusive content was included in the core offeringThis third point was of particular interest because:Some people within our business believed that customers who had yet to take up a pay tv offering from one of our competitors – Sky or Virgin – would be turned off by a YouView service that came with ‘inclusive’ contentThere was also a school of thought that believed that bundling any content as ‘inclusive’ would reduce demand because for at least some customers they would see it as having a price
As well as using this research to look at what impact different types of inclusive content had on set top box choice, we also wanted to use it to look athow we structured & pricedour content packs.Sky & Virgin differentiate themselves from each other through having different content structures. Sky organises its packs by genre, Virgin by size. There was heated debate at TalkTalk over which model to adopt so we complicated things still further for Nicole & Solutions2 by asking her to test the two different content structures.
Finally, irrespective of whether our paid for content packs were split by genre or size, we wanted to test each pack at three different prices to get a read of how sensitive our customers were to price.
First alternative Traditional choice based conjointAttributes: core package, inclusive content or not, channel bundles at different priceSecond alternativeACBCTo allow respondents to exclude specific channel packages or core packages
Problem? show conjoint picture (selfdrawn) wherebundles are combined Unrealistic scenario as this is nothowconsumerswillbuy extra channels
Solution ! Pick and chooseapproach MENU BASED CONJOINT
Final research processStep 1Preferencequestionbetweentwo core TV offeringsPreference for inclusive contentEstablishment of core offering via basicquestionsStatedpreference of channel bundles mainly to familiarise the consumerswith the bundleconcepts and compositionStep 3Menu basedconjoint Split sample(onewithsizebundles, onewith genre bundles)10 tasks4/5 channel bundles5 pricepoints per bundleN=
% aantal keren dat een respondent optie 1 zou kiezenBeschrijft het volume van keuzes voor optie 1 over alle respondenten heenEen beetje zoals een volumetricAantal pakketten=het maximum dat ze aangeduid hebben over alle taken heen, dus er moet vermenigvuldigd worden met 5De link volume - %likelihood to buy is not necessarily a % likelihood to buyHow did we choose methodology:We tried all three choose on how we could match the utilties with the counts and which felt intuitive the best
Choice of each channel pack = F (desirability, price, price of other packs)Did not choose this as from previous research the results were not very promising (i.e. not better than the exhaustive option). I.e. a very intensive process with a low chance for exceeding the exhaustive route.
Ideal here because we did not have many channel packsIntuitively definitely the best, plus not many channels/combinations to estimate
Results of the Exhaustive Alternatives modelUtilities for the desirability of each combination showed similar pattern as the count analysisPricesCounts analysis: all channel packs were quite price sensitiveHowever, utilities of the price levels showed less differentiation and constraints were needed to go in the right direction
Gepaste model zoeken: de drie modellen afwegen à exhaustive alternatives (zie slides voor “waarom”)Zelf CSV-file opzetten met dummies voor elk van de alternatieven en referentielevelAanpassen van de covariantiematrix voor de dummyvariabelen, met user-specified codingUtilities voor de alternatieven matchten de resultaten van de counts analyseEchter, tamelijk veel constraints nodig om de utilities van de prijslevels in de juiste richting te laten lopen (ondanks het feit dat uit de counts analyse naar voor kwam dat er toch wat prijssensitiviteit was)Dus: Algemene ervaring was positief. De resultaten waren logisch en bruikbaar. In dit geval was de counts analyse eigenlijk al voldoende om alle vragen te beantwoorden.Dummy variables for all 32 combinations
Free box/ higher monthly fee still of greater appeal than paid for box/ lower monthly fee ‘Inclusive’ content was not the barrier we thought it might beLittle difference in ‘buy through’ by either approach to structuring paid for contentAppetite for paid for content highest amongst current Pay TV households. Current Pay TV households are also less price sensitive than current Freeview households (irrespective of approach to structuring paid for content)Uptake of additional paid for content is highest amongst those opting for paid for box/ lower monthly fee