Simple Tools: Measuring Customer Delight
The Kano Model
Have you ever used a product or experienced customer service that made you feel pleasantly surprised? Such moments can be hard to come by when using stale or routine products and services. Companies innovate to delight their customers. How do you know if your product or service is meeting expectations? How do you prioritize your investments to avoid developing gimmicks and dedicate your scarce resources to the features that matter?
Unlike exact sciences, there is no simple formula for measuring customer delight. It is as if every company has its own fundamental laws of “business physics” that require discovery and understanding. By the time you think you have figured it out, the markets have changed, new technologies have emerged, and now it is time for you to rewrite the laws of your business’s physics. One tool that can be used for defending against obsolescence is the Kano Model.
The Kano Model is a theory on product development that was developed by Professor Noriaki Kano from the University of Tokyo in the 1980s. This model has been adapted in various forms over the years, but the underlying principles remain intact:
- Customers have some degree of satisfaction with the features in your product or service.
- You invest in developing or providing those features.
- We can study these parameters to understand where to invest next.
These principles may be easily understand in a visual representation. Figure 1 is a notional Kano Diagram that contains curves that describe the relationship between developed features and customer satisfaction.
Going from left to right in the plot can be understood as increasing level of feature development. For example, a typical car manufacturer will spend less time investing in unimportant features (left), such as the ability to operate underwater, than they would fuel efficiency (right). Going bottom to top represents how satisfied the customer is with the developed feature. For a typical consumer, the threshold for satisfaction on car underwater ruggedness is very low. On the other hand, if the vehicle gets average fuel efficiency, they may feel satisfied but not quite delighted.
Applying the Kano Model
How can we use this simple diagram to our advantage for your business? If you are not already aware, it is a mistake to not perform your due diligence on customer discovery. Approximately 34% of failed startups are due to a lack in customer demand for their product or service [1]. Entrepreneurs get excited about developing their great idea and forget to truly understand their customer. I learned this the hard way! Consequently, these companies invest their scarce resources into developing in the upper-left or bottom-right corners of the Kano diagram. Lots of resources are put into developing features that do not satisfy a critical need or barely manage to meet expectations. An example of how your solution might actually compare to the customer’s wants is provided in Figure 2.
In general, your innovation practice must involve customer discovery because it helps you establish an understanding of which features in your product or service are actually important. You can iterate from there. It will help you keep your costs down and improve your customers’ willingness to pay if you can do it well. Your goal will generally be to reduce the “error” between your solution and what the customer wants (or rather, needs).
Over time, your solution, the straight line through the center of the plot, moves downward as your customers get comfortable or their needs change. This is a ripe situation for disruption and a competitor can swoop in by delightfully satisfying the customer’s important needs. Your solution, in the worst case, becomes obsolete or uninteresting. Your best defense is to develop a comprehensive innovation strategy that will keep your solution relevant and satisfying for the customer.
Beating Obsolescence
The Kano Model alone is insufficient to accelerate your business’s innovation practice and measure customer delight. Innovation is rarely intuitive and as straightforward as applying a few tools. Take a look at our services to learn more about how an innovation practice expert can help your unique situation, or get in touch if you are ready to take your practice to the next level!
Analytic Forms of the Kano Model
An analytic form of the Kano model, named A-Kano, was developed by a group of researchers as a means to help balance customer satisfaction with production capacity [2]. The basic principle of A-Kano is the ability to “dial in” your production capacity plus inputs from customer responses to obtain an optimal product configuration. When we talk about production capacity, we could also refer to service throughput. For example, instead of number of cars (products) coming off the assembly line, we may consider the number of yards mowed and trimmed (lawn maintenance service) and use an analytical model to optimize profits.
The same concept applies to your business, whether you provide products, services, or both to your customers.Your business runs under your set of rules and view of the world. It is unique compared to your competitors, so it is not reasonable to expect that you can apply a single formula to solve your business goals. However, you can use business frameworks to guide your decision making. Putting these frameworks into an analytic form can make this process much more objective and data-driven. Let’s face it, data is an essential commodity in 21st century business, so leverage this resource in creative ways to give you a competitive edge.
References
[1] Kotashev, K. (2022, March 26). Startup mistakes: First-hand lessons from 80+ failed startups. Retrieved July 25, 2022, from https://www.failory.com/blog/startup-mistakes
[2] Xu, Q. L., Jiao, R. J., Yang, X., Helander, M. G., Khalid, H. M., & Anders, O. (2007). Customer requirement analysis based on an analytical Kano Model. 2007 IEEE International Conference on Industrial Engineering and Engineering Management. https://doi.org/10.1109/ieem.2007.4419400