Implementing Nobel-Prize Winning Theory to Key Driver Analysis

Key driver analysis is vital research for most businesses and is used to identify the most important aspects driving crucial business decisions. It can answer the common questions that may arise within your company, such as “What features of this product are influencing sales?” or, “Which areas of our service affect customer satisfaction the most?”

There are numerous methods of quantifying the variables that influence a key outcome, including various multiple linear regression techniques. However, linear regression can result in biased, spurious or suppressed results, most notably when some of the independent variables are closely correlated. The problem that occurs with highly correlated independent variables is multicollinearity, which is the inability to separate the contribution of the independent variables on the target.

Shapley Value regression analysis has been derived by Lipovetsky & Conklin from the Shapley Value method developed within the context of game theory. The Shapley Value gives an indication of the prospects of winning when co-operating with another player; the higher the Shapley Value, the better the player's prospects. The Shapley value analysis provides consistent results in the presence of multicollinearity because it calculates a score for all possible combinations of the independent variables, thus determining the effect of each one separately. Lloyd Shapley with Alvin E.Roth won the 2012 Nobel Memorial Prize in Economic Sciences for "the theory of stable allocations and the practice of market design."

Aside from the benefits of being less affected by multicollinearity, Shapley Value analysis also offers easily understandable results;  it shows the contribution of each independent variable as a percentage of the whole, so no negative results. Furthermore, this technique is stable when measuring effects over multiple waves.

After Shapley Value regression has been applied, significance testing can be implemented in order to see which variables have an influence on the dependent variable and to exclude irrelevant variables from the model. Different combinations of independent variables can be interrogated to see how they affect the dependent variable and each other, providing a deeper understanding of how the variables interact.

Remove the risk of erratic and illogical results by investing in Digitab’s Shapley Value Regression tool.

For more information on Shapley Value Regression or to speak to one of our consultants please call Mike Wright on tel +44 (0) 20 7031 0287 or email mike@digitab.uk.com.

Will they buy my product? Conjoint Analysis and New Product Development

In order to create new products and services you need to know your individual customer’s needs and preferences. You need to understand what features the new product should have and how it should be priced. Essentially, you need to know how likely it is that they will buy your product.

Conjoint Analysis is a special type of statistical analysis which is used to measure the perceived value of specific product features and to forecast the likelihood of buying/ using the product. It determines how people value the different features that make up an individual product or service.

There are various methods of Conjoint Analysis available to you and Digitab can help you to identify the appropriate approach for your needs and guide you through the research, however complex.

Conjoint methodologies available from Digitab include:

  • Choice based conjoint/ Discrete choice modelling
  • MaxDiff
  • K&S analysis
  • SIMALTO
  • Brand Price Trade-Off/ Essential Rank analysis

To learn more about our Conjoint Analysis offer please contact mike@digitab.com.uk

Top Excel tips from Andy Pope, MVP at Digitab

In 2014, Andy Pope, Programming Manager at Digitab, was once again presented with the award of Excel MVP from Microsoft.

MVPs are passionate about Microsoft technology and recognized for their exceptional technical expertise. Of the more than 100 million social and technical community members worldwide, each year only 3,800 are recognized as MVPs and only 130 in Excel.

Here are a few of Andy's top Excel tips to help you get more from the software, save valuable time and create charts with increased ease. We hope you find them useful.

Keyboard Shortcuts

  • F4 key can be used to toggle through absolute and relative cell references when editing a formula.
  • To alternate between displaying results or cell formula on the worksheet you can use CTRL+.
  • To quickly create a chart from the data in the current region use F11. If you want the chart as an object on the worksheet use ALT+F1 instead.
  • To make working with worksheet objects, such as shapes or charts, easier use ALT+F10 to toggle display of the Selection task pane.
  • If you have macros in your workbook you can quickly swap between the VBE and workbook by using ALT+F11.

Charts

  • Bar charts populate category axis from the bottom upwards, in effect reversing the labels compared to their order on the worksheet. To make the order in the chart comparable to worksheet, double click vertical axis and set Categories in Reverse and Axis crosses at Maximum.
  • Hide zero value data labels in charts by using custom number format General;General;; If the data source for your category labels contains dates it may produce unexpected spacing on the axis. Set axis to Text to have dates treated as simple categories.

At Digitab, Andy and his team are available to provide you support and help on MS Office automation, dashboard and charting.

For more information or to speak to one of our consultants please call Mike Wright on tel +44 (0)20 7031 0287 or email mike@digitab.uk.com