Optimising your development project with customer choice modelling

September 2020

Customer Choice Modelling is not only the world’s most advanced pricing research tool, it is also capable of quantifying other value perceptions and trade-offs, be it for a location, a service, an experience or a bundle of all of them.

What is Customer Choice Modelling (CCM)?

Our CCM is largely based on Prof Dan McFadden’s Nobel-prize winning ‘Decision Science’ work exploring human behaviour and decision-making patterns. It is guided by the principle that companies should concentrate on people’s choices rather than their preferences in order to accurately understand the underlying factors that drive purchase decisions.

Business, as well as life, is all about trade-offs. Simply understanding what consumers prefer hardly matters. CCM asserts that preferences without context are at best mildly interesting, and at worst useless, if these preferences are not subject to realistic market pressures. In other words, what really matters is not a preference, but what people actually choose in realistic situations.

 

Using Customer Choice Modelling to build better places

Through quantitative market research, we invite different consumer groups to choose between numbers of realistic, yet contrasting market scenarios. The choices reflect real life, so they are not easy and there is never an obvious right or wrong answer. By eventually choosing one scenario over another, respondents reveal the factors that dive their final decision.

Uniquely, we are able to test real estate innovations that are bespoke to a specific site or neighbourhood. In a residential setting, for example, our ‘bundle’ may include unit size, view-points, architectural design and price points as well as unique amenity, public space or attraction offers yet to be imagined.

Ultimately, the beauty of CCM is that it can be used for a plethora of real estate projects, from build to rent to mixed-use destinations. It is flexible and scalable able to trade-off everything from unit composition to community-wide amenity offerings, allowing you to create the optimal bundle of building uses, products, services and experiences for your project. MindFolio’s CCM provides managerial results that have the ability to future-proof new developments for years to come.

Further reading