Feature Placement Matrix

Key outputs

Feature Placement Matrix

Categorise features into appropriate tiers based on users' preferences and willingness to pay for each feature

Generated with the MaxDiff scores on the x-axis and the willingness to pay from the Van Westendorp (VW) analysis on the y-axis, the Feature Placement Matrix classifies software features into four quadrants - premium, add-ons, every tier, and deprioritise.

In this example, a business messenger app identifies three features to be marketed as premium features, one feature to be offered in every tier and as optional add-ons, respectively, as well as three features to deprioritise.

Ranked list of product features based on users' perceived importance

Identify the most and least important features for your users

Through MaxDiff Analysis, each software feature is ranked by its prominence in users' subscription decision-making.

The example shows data history, free tutorials/guides, and cloud storage were identified as the most important features among file hosting service subscribers. On the other end, offering a all-in-one control, free gifts, and multiple user access were the least critical features.

Price Sensitivity Meter (PSM)

Reveal the too cheap, cheap, expensive, and too expensive price points for your software

Another key output of the Feature Placement Matrix is the Van Westerndorp Price Sensitivity Meter, a chart that highlights the psychologically acceptable range of prices for your software.

For example, this chart suggests that the acceptable range of prices is $7.50 to $12.00, with the optimal price of $8.50.

Recommended further actions

The Feature Placement Matrix helps you classify your software features into one of the four quadrants by comparing the users' perceived importance and willingness to pay for each feature. To craft a software offering that attracts users to premium offerings while not disenfranchising the basic tier users, Conjointly's recommendations for each quadrant are as follows:

Methodology

Currently being used and refined over hundreds of projects for SaaS brands, the Feature Placement Matrix was created by combining the MaxDiff and Van Westendorp's Price Sensitivity Meter (VW) analysis. Below is the summary of these methodologies:

How the Feature Placement Matrix is computed

The Feature Placement Matrix is generated using the MaxDiff scores on the x-axis and the willingness to pay from the Van Westendorp (VW) analysis on the y-axis. The MaxDiff scores are directly obtained from the MaxDiff question.

To compute the willingness to pay, Conjointly calculates the difference between the feature's optimal software price and average optimal software price. However, this calculation only takes into account the top 20% of respondents with the highest MaxDiff score for each feature.

This approach involves a simpler survey and focuses on respondents with a high interest in selected features. There are two realistic assumptions behind this approach:

1. The software value is rarely the total value of all features offered. Thus, this approach helps learn the overall value of the software for respondents and eliminate guesswork.
2. The respondents with a higher interest in selected features are more likely to use those features and hence should be given more weight than those with low interest in the selected features.

Minimum sample size required for Feature Placement Matrix

To generate the Feature Placement Matrix, a minimum sample size of 40 respondents is required. This is because the VW analysis itself requires a minimum of 8 respondents to compute the optimal price point. Additionally, for each feature, the VW "optimal" price is calculated using the top 20% of respondents with the highest MaxDiff scores for that specific feature (8/20%=40).

Survey flow

A Feature Placement Matrix survey consists of four following stages.

Stage 1: Screening questions

The survey begins with screening questions to filter potential survey respondents and ensure only the desired audience is re-directed to complete the survey. Some commonly used screening questions include demographics, usages, and behaviours.

Stage 2: MaxDiff questions

Qualified respondents then proceed with MaxDiff questions. The respondents are asked to choose both their most important and least important features shown.

Stage 3: Van Westerndorp Exercises

Then, respondents proceed to complete the Van Westendorp exercises. Each respondent is asked approximately four questions on the price perception. For instance, at what prices respondents would consider subscribing to the software:

• “Priced so low that you would feel the software couldn't be very good?” – to determine the “too cheap” price.
• “A bargain—a great value for the money?” – to determine the “cheap” price.
• “Starting to get expensive, so that it is not out of the question, but you would have to give some thought of subscribing it?” – to determine the “expensive” price.
• “So expensive that you would not consider subscribing to it?” – to determine the “too expensive” price.

Stage 4: Additional diagnostic questions

Lastly, the survey ends with additional diagnostic questions, such as gender, location, and current software usage, that help you perform the subgroup analysis for more in-depth insights.

Wonder what the actual FPM surveys look like? Take a sample FPM survey today..