The Kano Model: How to delight your customers

in: Preprints Volume I of the IX. International Working Seminar on Production Economics, 1 Innsbruck/Igls/Austria, February 19-23 1996, pp. 313 -327 THE KANO MODEL: HOW TO DELIGHT YOUR CUSTOMERS Elmar Sauerwein , Franz Bailom, Kurt Matzler, Hans H. Hinterhuber* Department of Management, University of Innsbruck Which products and services can be used to obtain a high level of customer satisfaction? Which product features have a more than proportional influence on satisfaction, and which attributes are an absolute must in the eyes of the customer? So far customer satisfaction was mostly seen as a one-dimensional construction - the higher the perceived product quality, the higher the customer’s satisfaction and vice versa. But fulfilling the individual product requirements to a great extent does not necessarily imply a high level of customer satisfaction. It is also the type of requirement which defines the perceived product quality and thus customer satisfaction. Departing from Kano’s model of customer satisfaction, a methodology is introduced which determines which influence the components of products and services have on customer satisfaction. The authors also demonstrate how the results of a customer survey can be interpreted and how conclusions can be drawn and used for the management of customer satisfaction is demonstrated. Kano’s model of customer satisfaction In his model, Kano (Kano, 1984) distinguishes between three types of product requirements which influence customer satisfaction in different ways when met: Must-be requirements: If these requirements are not fulfilled, the customer will be extremely dissatisfied. On the other hand, as the customer takes these requirements for granted, their fulfillment will not increase his satisfaction. The must-be requirements are basic criteria of a product. Fulfilling the must-be requirements will only lead to a state of "not dissatisfied". The customer regards the must-be requirements as prerequisites, he takes them for granted and therefore does not explicitly * Professor Hans H. Hinterhuber is head of the Department of Management at the University of Innsbruck and professor of international management at the Bocconi University of Economics in Milano; Franz Bailom, Kurt Matzler and Elmar Sauerwein are assistant professors at the Department of Management at the University of Innsbruck in: Preprints Volume I of the IX. International Working Seminar on Production Economics, 2 Innsbruck/Igls/Austria, February 19-23 1996, pp. 313 -327 demand them. Must-be requirements are in any case a decisive competitive factor, and if they are not fulfilled, the customer will not be interested in the product at all. Customer satisfied One-dimensional requirements - articulated Attractive requirements - specified - measurable - not expressed - technical - customer tailored - cause delight Requirement Requirement not fulfilled fulfilled M ust-be requirements - implied - self-evident - not expressed - obvious Customer dissatisfied Fig. 1: Kano’s model of customer satisfaction (Berger et al., 1993) One-dimensional requirements: With regard to these requirements, customer satisfaction is proportional to the level of fulfillment - the higher the level of fulfillment, the higher the customer’s satisfaction and vice versa. One-dimensional requirements are usually explicitly demanded by the customer. Attractive requirements: These requirements are the product criteria which have the greatest influence on how satisfied a customer will be with a given product. Attractive requirements are neither explicitly expressed nor expected by the customer. Fulfilling these requirements leads to more than proportional satisfaction. If they are not met, however, there is no feeling of dissatisfaction. The advantages of classifying customer requirements by means of the Kano method are very clear: • priorities for product development. It is, for example, not very useful to invest in improving must- be requirements which are already at a satisfactory level but better to improve one-dimensional or attractive requirements as they have a greater influence on perceived product quality and consequently on the customer’s level of satisfaction. in: Preprints Volume I of the IX. International Working Seminar on Production Economics, 3 Innsbruck/Igls/Austria, February 19-23 1996, pp. 313 -327 • Product requirements are better understood: The product criteria which have the greatest influence on the customer’s satisfaction can be identified. Classifying product requirements into must-be, one-dimensional and attractive dimensions can be used to focus on • Kano’s model of customer satisfaction can be optimally combined with quality function deployment. A prerequisite is identifying customer needs, their hierarchy and priorities (Griffin/Hauser, 1993). Kano’s model is used to establish the importance of individual product features for the customer’s satisfaction and thus it creates the optimal prerequisite for process- oriented product development activities. • Kano’s method provides valuable help in trade-off situations in the product development stage. If two product requirements cannot be met simultaneously due to technical or financial reasons, the criterion can be identified which has the greatest influence on customer satisfaction. • Must-be, one-dimensional and attractive requirements differ, as a rule, in the utility expectations of different customer segments. From this starting point, customer-tailored solutions for special problems can be elaborated which guarantee an optimal level of satisfaction in the different customer segments. • Discovering and fulfilling attractive requirements creates a wide range of possbilities for differentiation. A product which merely satisfies the must-be and one-dimensional requirements is perceived as average and therefore interchangeable (Hinterhuber/Aichner/Lobenwein 1994). In the following we will explain how product requirements can be classified by means of a questionnaire. The ski industry, where more than 1500 customers were interviewed, is used to demonstrate how product requirements are ascertained, how a questionnaire is constructed, how the results are evaluated and interpreted and used as the basis for product development. Step one: Identification of product requirements - "Walk in you customer’s shoes" The starting point for constructing the Kano questionnaire are the product requirements which have been determined in explorative investigations. Griffin/Hauser (1993) found that only 20 to 30 customer interviews in homogenous segments suffice to determine approximately 90 - 95% of all possible product requirements. Many market research institutes use focus group interviews to determine product requirements, assuming that group dynamic effects enable a greater number of in: Preprints Volume I of the IX. International Working Seminar on Production Economics, 4 Innsbruck/Igls/Austria, February 19-23 1996, pp. 313 -327 more diversified customer needs to be discovered. Compared with the expense, individual interviews seem to be more favourable. Customer interviews are useful for registering visible product requirements and customer problems, but when investigating potential new and latent product requirements they usually do not suffice. Especially attractive requirements are not expressed by the customer, as these are the features he does not expect. Analysing customer problems instead of customer desires If customers are only asked about their desires and purchasing motives in the exploratory phase, the results are usually disappointing and the answers already known. The product expectations mentioned by the customer are only the tip of the iceberg. It is necessary to ascertain the "hidden" needs and problems. A detailed analysis of the problems to be solved, of the conditions of application and the product environment can lead to instructive information on promising product developments. The following four questions are of assistance when investigating customer problems (Shiba/Graham/Walden, 1993): 1. Which associations does the customer make when using the product x? 2. Which problems/defects/complaints does the customer associate with the use of the product x? 3. Which criteria does the customer take into consideration when buying the product x? 4. Which new features or services would better meet the expectations of the customer? What would the customer change in the product x? Fig. 3: Identification of customer problems The answers to the first question are generally of a very vague nature.