Understanding Value using Dr. Kano’s Model

How do you define quality? That’s an important question for those engaged in quality improvement. Defining things can be difficult, doubly so when the definitions concern something as vague as quality.

Yet define we must, especially if we want to measure current quality levels, or improvement to quality. After all, if you can’t define something, you sure can’t measure it.

Some years ago, Dr. Noriaki Kano recognized the need to link what is measured by quality professionals by what is important – value. Dr. Kano argued that process improvement activities, new product introductions and the like were all about the value added to the company and to the customer. In the process, quality, from the customers perspective is defined and made measurable.

However, the relationship between the performance characteristics (what gets measured) and value is not a simple or direct one. At times, we can improve some product or process characteristic without affecting perceived value. Many organizations have been left confused and bewildered after improving some product significantly only to find the customer never noticed. So while all increases in value (expressed as customer satisfaction) require an improvement to product or process (expressed as improved process or product performance), not all improvements result in an increase in value.

Kano’s Value/Quality Characteristic Model

Dr. Kano developed a two-dimensional model of the relationship between performance (expressed as performance measures) on the one hand, and value (expressed as customer satisfaction) on the other. It should be considered a basic tool in the effort to overcome simplistic, linear thinking regarding the relationship between what an organization does and how this is perceived by the customer.

Kano Model of Quality Characteristics

Kano Model of Quality Characteristics

Kano Model of Quality Characteristics

The model identifies three types of characteristics, depending upon the type of expectation the customer has for the product being delivered. The model defines type of expectation, because it recognizes that these differences go beyond differences in degree; they define different forms of the performance/value equation.

Basic Characteristics.

These are the characteristics we take for granted. Customers don’t typically mention them, simply because they are so important or basic to the value equation.

In banking, for example, having accurate statements is a basic characteristic. People expect the bank to count well. Customers don’t generally thank a bank for getting their bank balance correct – it’s expected. In the airline industry a basic characteristic is arriving at the destination – alive! In other words, don’t crash the plane! No kudos from your customers for getting them there safely – it’s expected.

No matter how well a company delivers these basic characteristics, the customer will never be more than neutral in terms of satisfaction or perceived value. But fail to deliver one of these characteristics and a great deal of dissatisfaction will be expressed. In other words, basic characteristics tend to be noticed only when absent.

This, by the way, is what so often underlies employees’ complaint about customers: never a thank-you for doing a good job, but sure letting you know it when an error has been made. In these cases, the employee has just identified typical customer response to expected performance levels of a basic characteristic.

Satisfiers (More is better characteristics)

Satisfier characteristics are those that customers want as opposed to expect. The more we deliver, the happier the customer. Doing well here allows us to create satisfied customers.

Satisfier characteristics include lower price, larger amounts, faster delivery, greater reliability, more convenient packaging and greater effectiveness.

It is interesting to note that most customer and employee research is focused on satisfiers. This is because satisfiers are what most people think of when asked questions about what is important. Rarely do fundamentals (basic characteristics) come to mind. The result can be research focused on the obvious – forgetting or omitting some of the more important points of the customer satisfaction (value) picture.

Delighters

Delighters are those characteristics that represent a positive surprise to the customer. They are totally unexpected. As such, if they are not present, they cause no dissatisfaction. Moreover, customers will not mention such things as important on customer surveys because they are, after all, totally unexpected by definition. But when delivered to the customer, delighters raise satisfaction and loyalty.

Some years ago my wife and I were traveling extensively across the United States and flying with Delta Airlines exclusively. At the end of our travels were found ourselves in Los Angeles waiting to catch our last flight home. We were tired and generally fed-up with the world as people tend to be at the end of a lengthy trip. While waiting we were paged by Delta. Being an experienced traveler, I immediately assumed the worst. Nothing could be further from the truth. One of the front line staff at Delta had noticed how extensive our itinerary had been. Reasoning we were tired of it all, she had paged to inform us that Delta would be upgrading my wife and I to first class as well as providing us with full access to Delta’s lounge. To this day my wife books through Delta whenever she can. That is a delighter.

Determining What is Important to the Customer: Using the Kano Model

The Kano model provides insight into the dynamics of how people in a system arrive at some outcome (level of satisfaction, repurchase behavior etc.), by comparing expectations (basic, satisfiers or delighters) with experience (quality characteristic performance). It tells us that different quality characteristics will elicit different responses from the customer depending upon what the customer expects relative to that characteristic.

The bottom line here is that all quality characteristics (performance measures) are not created equal. They are created in the mind of the customer and the customer not only has different expectations for each characteristic, but different types of expectations as well.

When identifying quality characteristics to measure, it is important to identify the type of expectation held for that characteristic by the customer. Doing so helps identify what characteristics should be measured and where priorities for improvement lie. Identifying the type of characteristic may prove difficult, in which case some empirical customer research would be worthwhile. The research must be designed carefully, however, as customers will find it difficult to identify basic characteristics and nearly impossible to identify delighters.

The bottom line is that if your organization is focused on value and makes some attempt to measure value added, the Kano Model is indispensable. It provides a useful tools to both design the measurement system and to interpret the results. In my view, no set of performance measures should be designed without it.

Other Applications of the Kano Model

The Kano model, while originally designed to describe customer expectations of certain characteristics can be used to describe other relationships as well including:

  • Examining the expectations of our own organization for any process or product. Our organization has expectations for the product or process and these expectations can and should be classified by the type of expectation held. Is some characteristic a basic expectation or a satisfier? What would it take to delight the organization?
  • Examining the satisfaction levels of employees. Organizations often survey employees to assess levels of satisfaction and morale. All too often, the approach is a simple set of questions about how employees feel about their salary, benefits, hours of work, relationship with supervisor, scope of work or other variables. This approach ignores the reality that employees consider these things differently. Fair salary, for example, would likely be a basic characteristic – we should not expect any employee to be satisfied simply because they are being paid the going rate. Allowing that same employee a little more say in how they do their job may be an example of a satisfier, or in some cases, a delighter.
  • Examining our relationship with suppliers. Our suppliers also have expectations of their relationship with us. What do they require or expect of the relationship? What characteristics would improve the relationship? Understanding the nature of the expectations helps us improve levels of trust and build a win-win relationship with those we depend on for our inputs.

Beware Creeping Expectations

The Kano model depicts the relationship between performance as measured and as perceived. But things change and this is especially true with delighters. Once delivered, the customer is delighted. But the customer’s expectations are also modified. Soon, customers come to expect those delighters. Thus, what was once a delighter evolves to become a satisfier or perhaps a basic characteristic.

Which means that when organizations speak of ‘delighting the customer’ they had best be careful. It may be easy to delight the customer once, perhaps even twice. But as expectations change, organizations will need to address issues of sustainability. Specifically, can the organization continue to deliver a delighter if it evolves into a satisfier or basic characteristic.

Summary

The Kano Model is one of the more useful tools in the quality professional’s toolkit. It provides a whole new way to consider what is important in an organization and how the organization can add value. If adding value is important, then the Kano model will quickly become your new best friend.

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Filed Under: Operational ExcellencePerformance MeasurementSurvey ResearchTools and TechniquesVoice of the CustomerVoice of the Employee

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  1. Hi Guys,
    Thanks for posting. I hope the new year has started out great for all of you!
    Miss you,
    Nance

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