Microsoft Streamlines Product Portfolio and Enhances Customer Satisfaction with Sawtooth Software

Overview 

Microsoft was facing a critical decision about its hardware product line, which consisted of around 20 different offerings. The company faced a challenging decision: could it scale back its lineup without sacrificing customer satisfaction or market share? The goal was ambitious but clear: maintain a competitive edge, meet customer needs, and reduce operational complexity. Microsoft turned to Sawtooth Software for help, leveraging its advanced choice modeling tools to guide this high-stakes strategy. As a result, Microsoft was able to reduce the number of products down to just 6 products, a 70% reduction, while maintaining customer satisfaction and sales.  

The Challenge 

For years, Microsoft relied on conjoint analysis to optimize product design and pricing. But now, it needed insights on a larger scale—to evaluate and reshape its entire product portfolio. Were there too many products, or too few? Were the right features emphasized? Microsoft aimed to answer these questions while also uncovering opportunities for greater product differentiation and market impact. 

The Solution

Microsoft utilized Sawtooth Software’s choice-based conjoint (CBC) and adaptive choice-based conjoint (ACBC) analysis tools to explore potential scenarios for its product lineup. Using a genetic algorithm (GA) model—a sophisticated tool included in Sawtooth’s market simulator—Microsoft ran a series of simulations to model customer responses to various portfolio configurations. The GA model, known for refining complex data, enabled Microsoft to compare candidate portfolios against competitors and continually optimize based on real-world customer preferences. 

The Outcome 

The analysis provided clear insights: offering more than six products in the lineup delivered diminishing returns. Although adding options increased customer preference share, each additional product beyond six contributed less than 1% to the overall customer preference. The findings revealed an ideal lineup that maximized customer satisfaction while minimizing operational demands. 

Thanks to Sawtooth Software’s tools, Microsoft achieved a streamlined, cost-effective product portfolio that met customer needs with precision. By reducing the lineup to a core of six well-differentiated products, Microsoft not only saved costs but also ensured its offerings were optimized for the market. This project showcased how Sawtooth Software’s choice modeling and simulation tools could drive impactful, data-informed strategic decisions, creating a replicable framework for future product evaluations.