Kano’s Model of Customer Satisfaction How to Delight Your Customers A. Nitipan Ratanasawadwat Assumption University of Thailand

Origins of the Kano Model Noriaki Kano Professor at Tokyo Rika University International Consultant Received individual Demming Prize in 1997 Know the Voice of the Customer Translate the V Kano Model concept first published in an article by Kano, N., Takahshi, F & Tsuji, S. (1984). Attractive quality and must-be quality. The Journal of the Japanese Society for Quality Control, April, pp. 39-48.

Introduction Product/service quality is main antecedent of customer satisfaction (Cronin & Taylor 1992; Anderson & Sullivan 1993; Brady et al. 2002) Important to find out how each attribute performance impacts on satisfaction Prof. Kano pointed out that not all product/service attributes have same role in satisfying customer needs

Origins of the Kano Model Developed foundation for an approach on “Attractive Quality Creation” commonly referred to as the “Kano Model” Challenged traditional Customer Satisfaction Models that More is better, i.e. the more you perform on each service attribute the more satisfied the customers will be

Origins of the Kano Model Proposed new Customer Satisfaction model (Kano Model) Performance on product and service attributes is not equal in the eyes of the customers Performance on certain categories attributes produces higher levels of satisfaction than others

Introduction Separate among satisfaction, dissatisfaction and delight since factors that dissatisfy and that delight are often different (Rust, Zahorik & Keiningham 1994) Ex. If a customer approaches an ATM then finds it to be out of cash, the customer will likely be dissatisfied, but it is unlikely that finding an ATM stocked with cash would satisfy or delight the customer

Kano’s Model of Satisfaction Technique use to determine which influence the attributes of products and/or services have on customer satisfaction (Kano et al. 1984)

Kano’s Model of Satisfaction 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 Which attributes are an absolute must in the eyes of the customer?

Kano’s Model of Satisfaction Product/service attributes can be classified into three groups Basic attributes/dissatisfiers/Must-have Performance/one-dimensional attributes Exciting attributes/satisfiers/Attractive

Basic Attributes/Dissatisfiers Minimum required features that customer naturally expect from a product/service Not able to elicit satisfaction but can produce dissatisfaction when not fulfilled ex. Punctually and safety of airline the customer takes these requirements for granted, their fulfillment will not increase his satisfaction. The must-be requirements are basic criteria of a product, comparing with category point-of-parity.

Performance/One-dimensional Attributes Produce both satisfaction dissatisfaction depending on performance levels satisfaction is proportional to the level of fulfillment of these attributes ex. Gasoline consumption of a car; lower consumption leads to higher customer satisfaction 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. Comparing to competitive point-of-parity.

Exciting Attributes/Satisfiers Produce satisfaction when delivered but cause no dissatisfaction if not delivered High performance on these has a greater impact on overall satisfaction rather than low performance ex. (unexpected) promotional offers 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.

Three-Factor Theory

Typical Research Framework

Kano’s Model Process Identify the Voice of the Customer Translate Voice of the Customer into Critical to Quality Characteristics (CTQs) Rank the CTQs into three categories: Dissatisfier - Must be’s – Cost of Entry Satisfier – More is better – Competitive Delighter – Latent Need – Differentiator Evaluate Current Performance Surveys Interviews Focus Groups Observations Customer Complaints

Kano Model  The Kano Model is a tool that can be used to prioritize the Critical to Quality characteristics, as defined by the Voice of the Customer and the three categories identified by the model are: Must Be: Whatever the quality characteristic is, it must be present, such that if it is not, the customer will go elsewhere! Performance: The better we are at meeting these needs, the happier the customer is. Delighter: Those qualities that the customer was not expecting, but received as a bonus. Link to Six Sigma: Lean Six Sigma Design for Six Sigma Model Structure The model is represented in an (x, y) graph The x-axis represents how good we are at achieving the customer’s outcome (s), or CTQ’s. The y-axis records the customer’s level of satisfaction the customer should have, as a result of our level of achievement.

Kano Model Procedure Research Analyze & Brainstorm Plot & Diagram Strategize Research available data sources Determine data collection strategy Design data collection instruments Collect and summarize data Analyze results from data collection Brainstorm list of features and functionality Develop Functional and Dysfunctional Questionnaire Distribute Questionnaire Develop Customer Requirement Matrix Record Questionnaire results in Matrix and Summarize Plot results on Kano Model Determine Project selection Product Development Service Development Identify Marketing Strategy

1. Research Must Be’s - Focus Groups, Lawsuits and Regulations, Buzz on Internet Satisfiers - Competitive Analysis, Interviews, Surveys, Search Logs, Usablity Testing, Customer Forums Delighters - Field Research, Marketing/Branding Vision, Industrial Design, Packaging, Call Center Data, Site Logs

2. Analyze & Brainstorm Analyze data from available sources Brainstorm list of features and functionality Determine type of requirements: Output Requirements Service Requirements Kano Model Requirements Survey User Survey “Functional form” vs. “Dysfunctional Form” “How would you feel if the product had feature X?” “How would you feel if the product didn’t have feature X?” Kano Questionnaire Answers: I like it. I expect it. I’m neutral. I can tolerate it. I dislike it. Output Requirement – Features of the final product and service delivered to the customer at the end of the process Service Requirements – More subjective ways in which customer expects to be treated and served during the process itself - How should we interact with and treat customers?

Example: Requirements Survey

Example: Requirements Questionnaire

Functional vs. Dysfunctional Comparison

Functional vs. Dysfunctional Comparison Basic Attribute

Functional vs. Dysfunctional Comparison Performance Attribute

Functional vs. Dysfunctional Comparison Exciting Attribute

Evaluation Customer Requirements C.R. A E O R Q I Total Grade 1 3 6 14 23 2 5 11 4 13 10 9 All CR are not created equal. Improving performance on a Must-be CR that is already at a satisfactory level is not productive compared with improving performance on a one dimensional or attractive CR. Insight into which CRs fall into which quality dimensions can improve one’s focus on the vital few. In general, must-be requirements must be adequately covered, the set of one dimensional requirements must be competitive, and some attractive requirements are needed for competitive differentiation. Customer Requirement is: A: Attractive R: Reverse Q: Questionable Result E: Expected O: One Dimensional I: Indifferent

3. Plot & Diagram Plot Attributes Lean - Waste Six Sigma – Defects, Variability DFSS – New Product/Service Development

Kano Model & QFD

4. Strategize Project Selection Lean Six Sigma Design for Six Sigma Organizational Strategy Dissatisfier – Must be’s – Cost of Entry Satisfier – More is better – Competitive Delighter – Latent Need – Differentiator

Application Break into Teams Select Team Leader Select Scribe Select Presenter Scenario – You work for a Hotel chain and your company is trying to identify Voice of the Customer information to improve Hotel performance. Instructions: Brainstorm important characteristics you expect when staying at a Hotel Identify whether they are a Must be, Expected or a Delighter from a Business Client perspective and from a vacationer perspective Add in what the current performance is for the Hotel

Example Results

Debrief Analysis Strategy Recommendations

Summary of Kano Model Analyze and rank the voice of the customer data Develop into Categories Dissatisfier – Must be’s – Cost of Entry Satisfier – More is better – Competitive Delighter – Latent Need – Differentiator Identify and implement strategy

Questions?

References Walder, D., (1993). Kano’s model for understanding customer-defined quality. Center For Quality of Management Journal, 39, 65 – 69. Jacobs, R., (1997). Evaluating customer satisfaction with media products and services. European Media Management Journal, 32, 11 – 18. Ungvari, S., (1999). Adding the third dimension to auqlity. Triz Journal, 40, 31 – 35. Sauerwein, E., Bailom, F., Matzler, K., & Hinterhuber, H. (1996). The kano model: How to delight your customers. International Working Seminar on Production Economics, 19, 313 - 327 Zultner, R.E. & Mazur, G. H. ( 2006). The Kano Model: Recent Developments. The eighteenth symposium on Quality Function Deployment.

Dimensions of Quality Performance Reliability Convenience and Accessibility Features Empathy Conformance to Standards Serviceability Durability Aesthetics Consistency Assurance Responsiveness Perceived Quality

Dimensions of Quality ( 1 of 6) PERFORMANCE: How well the output does what it is supposed to do. RELIABILITY: probability of operating for specific time and conditions of use

Dimensions of Quality (2 of 6) CONVENIENCE and ACCESSIBILITY: How easy it is for a customer to use the product or service. FEATURES: The characteristics of the output that exceed the output’s basic functions.

Dimensions of Quality (3 of 6) EMPATHY: The demonstration of caring and individual attention to customers. CONFORMANCE: The degree to which an output meets specifications or requirements.

Dimensions of Quality (4 of 6) SERVICEABILITY: How easy it is for you or the customer to fix the output with minimum downtime or cost. DURABILITY: How long the output lasts. AESTHETICS: How a product looks, feels, tastes, etc.

Dimensions of Quality (5 of 6) CONSISTENCY: The degree to which the performance changes over time. ASSURANCE: The knowledge and courtesy of the employees and their ability to elicit trust and confidence; The ability of the output (and its provider) to function as promised

Dimensions of Quality (6 of 6) RESPONSIVENESS: Willingness and ability of employees to help customers and provide proper services. PERCEIVED QUALITY: The relative quality level of the output in the eyes of the customers.

When is there too much Quality The cost of quality erodes the profit The quality is too far exceeding customer expectations Rational turns to Irrational

Importance of Customer Satisfaction and Loyalty “Satisfaction is an attitude; loyalty is a behavior” Loyal customers spend more, are willing to pay higher prices, refer new clients, and are less costly to do business with. It costs five times more to find a new customer than to keep an existing one happy

Measuring Customer Satisfaction Discover customer perceptions of business effectiveness Compare company’s performance relative to competitors Identify areas for improvement Track trends to determine if changes result in improvements

Difficulties with Customer Satisfaction Measurement Poor measurement schemes Failure to identify appropriate quality dimensions Failure to weight dimensions appropriately Lack of comparison with leading competitors Failure to measure potential and former customers Confusing loyalty with satisfaction

Creative Problem Solving Mess Finding – identify symptoms Fact Finding – gather data; operational definitions Problem Finding – find the root cause Idea Finding – brainstorming Solution Finding – evaluate ideas and proposals Implementation – make the solution work