Publication Date

11-2010

Abstract

Customer choice modeling techniques have grown in sophistication and applicability, so that this methodology can be useful for assessing the services and amenities that are market drivers for customers of hospitality businesses. In essence, customer choice modeling is an experimental process that seeks to identify the key market drivers by comparing respondents’ choices among packages of products and services, known as choice sets. By comparing the ratings of various choice set packages, one can assess which features of a product or service are most critical to the purchase decision. Also helpful in customer choice modeling is analysis of existing purchase patterns, which can be collected from point-of-sale devices and web activity. However, valuable though it is, collected data are backward looking—telling what customers did, but not what they will do. In contrast, customer choice modeling can look forward to see what customers might like, provided the experiment is designed correctly.

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