CHAID, although limited in its capabilities provides a very cost effective way for organizations to dig deeper into understanding who their consumers are...
Trumbull, CT (PRWEB) April 26, 2013
When asked about the “Chi-Squared Automatic Interaction Detector” and if his clients would be intimidated by the name, Blum said, “No, not at all." The end-user does not need to know the statistical jargon behind the power. The beauty of CHAID is that the end result is a Segmentation Tree that divides your customers based on a single critical variable, like Purchase Intent, and then further divides the customers based on key factors such as lifestyle and household dynamics. The output, or the Tree, is created in pecking order. In other words, the most important factor that determines predictability will appear at the top of the tree and less important factors will follow below. When you examine the entire Tree, you quickly get a very clear picture of who your core target is.”
Segmentation Studies are a great way to gain deeper insights into consumer behavior as well as to more effectively and efficiently allocate resources. One reason segmentation studies aren’t done as often today is that the costs can be prohibitive, often times well into the six-figures and can take six months or longer to complete. CHAID, although limited in its capabilities provides a very cost effective way for organizations to dig deeper into understanding who their consumers are and to understand their needs and purchasing habits.
Timing and costs vary based on the number of Trees requested, but the typical CHAID analysis is delivered within 1 or 2 weeks and the prices start as low as $3,000. That includes the raw data file, the segmentation tree, and an executive summary.
Andrew Blum is a marketer, adjunct professor, and peer mentor at University of Connecticut, living in Trumbull, CT. He has 15 years of experience in consumer research and marketing strategy. For more information, Andrew can be contacted through his website for customized segmentation analyses.