Establishing customer value: The Kano Model

“What would happen if I removed this feature?”

“What features should we start with?”

“How do we know that feature is worth the investment?”

If these questions sound familiar, it is because everyone working in a digital products agency is challenged on every project to answer them.

Clients work with Waracle to get a product built and shipped, or to improve an existing one, and they rely on our expertise to guide them through the shaping of these products – or services – into something people will use and love. Each project we embark on has unique requirements, although there are common techniques and approaches we can bring to the table, with Kano being a key element to establish customer value.

Establishing customer value is a crucial step in the process of creating a functional bespoke solution to our client’s ambition. It provides us with the scientific data necessary to support our decisions and to answer the questions at the beginning of this article.

 

How do we establish customer value?

What is customer value? Customer value measures how each feature within a product impacts customer experience and satisfaction.

In early digital services, this metric existed on a scale where usability brought the greatest value to the users, while frustrating experiences delivered the least value. At the time, the novelty of the technology was enough to compensate for poor user experience, and therefore high grade usability wasn’t widely expected by the public.

As digital products consolidated their place in everyone’s daily lives, and design started to influence the way they were developed, usability slowly became a standard users expected. Today, with usability being the norm, the greatest customer value is delivered by delightful and extraordinary experiences, this has become the ground companies compete on.

Satisfaction is not the only variable playing a crucial role in delivering customer value; if it was, it would mean that improving each attribute of a product – or service – will always, automatically lead to a better customer experience, which has been proven not to be true. In the early 1980s Noriaki Kano, a Tokyo-based lecturer and quality management consultant, understood this and started developing a method that predicts the customer value of each feature of a product or service by comparing two variables: satisfaction and investment. This method later came to be known as The Kano Model.

 

The Kano Model

Kano proposes a form of feature analysis that is based on a two-dimensional graph: the y-axis tells us the level of satisfaction delivered by a certain feature, from total dissatisfaction to total satisfaction; the x-axis shows us how much of that given feature will need to be implemented in the product, from no functionality at all to the best implementation possible. By analysing the satisfaction (or lack thereof) caused by a feature, and the implementation cost associated to it, we can match each feature to one of the 5 Kano categories.

 

Kano examples

 

Performance

Performance features work in a simple way; the more we provide, the more satisfaction they will bring to our customers. If done well, Performance features can lead to delightful experiences, and will be how you are compared against your competitors.

Since Kano can be used to establish the customer value of any types of products, not only digital ones, let’s use cars as a practical example. Fuel economy is an example of a Performance feature: if your car can only do 2 miles per litre, you will probably be dissatisfied; bring that number up to 10 miles per litre, and it is likely to be in line with your expectations. But if you are considering buying a car that can do 20 miles per litre, fuel efficiency will probably be a delight factor that will put that manufacturer ahead of its competitors – at least within your decision making process!

Must Be

There are many factors to consider in addition to fuel economy: you’d probably check the quality of the interiors, its drivability, and many other things before making a decision. But would you check if it has a steering wheel? Probably not. A steering wheel in a car is a good example of a Must Be feature.

Must Be features are basic functionalities customers expect to find in a product or service: if yours lacks one or more of them, it will be considered bad or incomplete, and users will become frustrated and angry – and yes, that probably means they will stop using it altogether. At the same time, if they are there users won’t be satisfied, they will just be neutral.

This means that the smallest investment is enough to reach the maximum level of satisfaction for a Must Be feature. When building a new product or service, these are the basic requirements that should be included in the first MVP – without necessarily worrying too much about including other categories of features – as the absence of one or more of these is likely to lead to highly negative feedback from the customers.

Delight

As the name suggests, Delight features (also sometimes referred to as Attractive) are the functionalities that create a wow factor. They are not expected by the users, and cause different degrees of positive reactions. For this reason, these features will impact the NPS score of your product the most, and they represent your chance to do something truly innovative.

Let’s jump back to the car analogy: it has autonomous parking. That is probably not something you were expecting – or that you required it to have – but the fact that it has it will most likely lead to some excitement over the thought of buying it. Delight features often only require a small investment to achieve a good level of customer satisfaction. And since your product or service will require some serious time and money spent on expected basic features, it is a good thing to know you won’t need an overwhelming amount of work to get someone to say “Wow, that’s cool!”.

When Clydesdale Bank asked us to work with them to create new innovative features and ideas, we used the Kano survey to identify an AR currency converter feature as a Delight factor.

Indifferent

Does your car have a card holder? If you don’t know, that’s normal. Not all features and functionalities are important, there will always be some of them we are simply not interested in as customers. These are called Indifferent features: their presence (or absence) doesn’t make a real difference, as they are not normally expected and don’t bring any satisfaction when fully fulfilled, no matter how much effort we put into them. In other words, these features are money sinks.

Reverse

Finally, some features actively make customers dissatisfied with a product. What if the car has autonomous parking, it does 20 miles per litre, and it’s got everything you wanted. Only to then discover it has manual winding windows. Would you have second thoughts at that point?

A manual window in a car is an example of Reverse feature. These features will cause dissatisfaction if present, and will result in negative feedback. There are situations in which a Reverse feature might need to be included in a product because of certain business requirements – advertising being a good example. In these cases it is still valuable to know if said feature belongs to this category, as it allows us to focus on how to minimise the negative effects of its presence.

 

The natural decay of delight

One thing that always needs to be kept in mind when looking at Kano categories is that they are not static – they change and evolve over time. And in digital products, this tends to happen quite quickly.

With the improvement of existing technologies, Performance features tend to become Must Be; as new cars are built with more and more efficient fuel engines, 20 miles per litre might become the norm over time. The good thing is, the investment associated with that feature will adjust as well, so there won’t be a significant increase in spending needed to build an improved version of the same Performance feature. Delight features cease to generate their wow factor once the novelty has worn off, and extraordinary experiences become ordinary and expected as more and more competitors include them in their products. This phenomenon is known as the natural decay of delight.

When the first manual windows appeared in cars in the 1920s, they generated a wow factor: it wasn’t long though before they just became a basic expectation for anyone buying a new car. As it usually happens, technology progressed and electric windows were first introduced in the 1950s, and they immediately delivered a new, delightful experience: it took them about 30 years to turn into a Must Be feature as they were built into more and more models and drivers grew accustomed to them. That’s when manual windows stopped being a common expectation, and (almost) suddenly became something people didn’t like anymore, or in other words, a Reverse feature.

 

Natural Decay of Delight

 

This phenomenon reminds us that the Kano Model only paints a picture of the current customers’ perception of features within a certain field. Kano categories are bound to change over time as technology progresses and users get used to new features and functionalities; implementing this method regularly as we work on a project at Waracle always gives us new insights on how the market we are operating in evolves and transforms.

Implementation

This is how the Kano Model works in theory. But how do we at Waracle implement it? By working with our client to secure access to a good segment of prospective and/or existing customers. We conduct studies and surveys asking a number of questions per feature we want to validate, and we analyse the answers to position each solution within an evaluation table.

This manual process usually takes 6-8 working days to implement – plus some calendar days needed to get all the responses back. Our Design team has found a faster and more efficient way, automising the evaluation process and reducing the time down to 1-2 working days, making this method more viable and cost-effective.

So, is it worth it?

Absolutely. What made the Kano Model so successful is the fact that when it is fed a backlog of functionalities that are being considered for a product, it will always return a list of features prioritised by customer value. And even more importantly, this list will be backed up by indisputable, mathematical data that is based on the customers’ needs and expectations. At that point, all we have to do is take that list and compare it against the business value and cost of each feature, and we will have a clear idea of what our product will look like.

Kano is one of the tools Waracle use when working with clients on their requirements and digital strategy. It gives us and the client a solid ground to build upon, practically meaning we can work faster, with less risk and more confidence around how the solutions we build will be received by their users. All before a single screen is even designed. If you’re considering a new mobile or digital project – or maybe need to revisit an existing one that’s not performing quite as well as expected – we’d love to hear from you.


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