Published March 2018
Roughly 40 years ago Professor Noriaki Kano of the Tokyo University of Science led research for predicting customer satisfaction which is still very relevant today. At a crude level, one might believe that if a product or service meets customer needs, they will be happy. If needs are not met, customers will be dissatisfied.
Kano determined that it’s a bit more complicated than that. He found that not all product/service features are created equally. Understanding this is critical to designing, producing and marketing your products or services.
Kano defined features which are expected by all customers as basic or must-have features. These are the minimum expectations which customers have established. For example, anyone purchasing a vehicle in a developed country today expects a spare tire and air conditioning as standard.
Basic features aren’t differentiating characteristics, but merely a threshold that must be met in order to play the game. Automobile companies don’t get extra credit for supplying two spare tires. The only way suppliers can hope to differentiate themselves via basic features is by providing them with minimal trade-offs of other features, such as the temporary use spare tire which minimizes cost and expended trunk space.
One can only dissatisfy customers by failing to meet basic expectations. Thus, because they are not differentiating, basic features should not be marketed. Imagine driving down the highway and coming across a hotel sign advertising “Free HBO.” The sign basically screams, “We haven’t updated anything within the last 40 years!”
Kano identified a second category of features as performance features. These features are directly responsible for customer satisfaction. Returning to our vehicle example, if fuel efficiency is important to a customer, the higher the mpg delivered, the happier they are. If they are price conscious, happiness is directly related to the sticker price.
It’s important to realize that each customer has their own unique priority list of performance features for a product or service. Often there are trade-offs between various features (e.g. increasing storage space may negatively impact fuel efficiency and cost). Understanding how various customer segments prioritize performance features is critical to the future success of any new product or service. This information will drive the design focus and later the marketing focus.
Performance features can be effectively marketed if they establish new benchmarks (e.g., fuel efficiency with hybrids) or they surpass the levels provided by competition.
The final category acknowledged by Kano is excitement features. These are innovative ideas that most customers haven’t even thought of yet. At best, customers may have identified a problem or inconvenience that they would like solved.
I vividly recall driving home from a high school girls’ basketball game ten years ago in a friend’s car on a night when the temperature was near zero. When he switched on the electric seat heaters it was a near religious experience. My opinion of electric seat heaters went from a frivolity to a near necessity in the time it took the seats to heat up.
Because excitement features are unique to your product or service, they also represent a marketing opportunity. Depending on the degree of novelty, the marketing effort may have to take extra care to explain the feature (who really understood Bluetooth when it was first introduced?).
The lack of excitement features doesn’t cause customer dissatisfaction so these only add to satisfaction … assuming they perform as advertised. They also attract the early adapter crowd as customers, those folks who have to be the first person to own a new innovation.
Obviously with time, excitement features become basic features. The standard for performance features also continues to rise over time.
OK, this all makes sense when designing a car; but what about those of us providing services? Let’s look at an example for a tax accountant:
Spending time face to face with your customers is vital to understanding their needs, wants and issues so that you can effectively design, deliver and market products and services that hit the mark.
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