A company could create a product with the same features as its competitor’s product, but customers are still not enthusiastic about it. There are several reasons for this, but one of the most common is that the product team focused too much on functionality while ignoring what the customers truly desired.

Customer satisfaction is not always tied to product functionality. As a result, product designers and developers must strike a balance between product functionality and customer fulfillment for companies to compete favorably in the global market.

Using Kano analysis helps companies achieve the harmony of product functionality with customer satisfaction. It’s a method for analyzing the non-linear relationship between product performance and customer satisfaction.

What is Kano Analysis?

The primary goal of Kano analysis is to understand, categorize, and prioritize customer requirements or expectations for products.

The Kano analysis is a product development model designed to help organizations identify customer needs and product performance features. It is also known as the “Customer Delight vs. Implementation Investment” strategy.

The analysis helps organizations in prioritizing features on a product roadmap based on their likelihood of satisfying customers and the implementation investment.

The analysis states that there are five categories of a customer’s emotional responses to any product. These emotional responses include the following: must-be or must-have features, performance features, attractive features, indifferent features, and reverse features. 

This analysis helps organizations in launching into the market by establishing what product features consumers consider essential. It also helps organizations stay competitive by showing them how to optimize product performance.

Finally, it helps organizations compete favorably by knowing what product features to avoid and what product features excite consumers. 

Origin of the Kano analysis

Professor Noriaki Kano developed the Kano analysis model for product development in the 1980s. Noriaki Kano was a quality management professor at the Tokyo University of Science.

Before 1984, when he published the Kano model analysis, organizations relied solely on complaint processing and the enhancement of popular features to ensure customer retention and loyalty. Product quality was measured based on operational parameters only. 

This meant that all efforts were concentrated on developing products that were free of flaws. The product with the fewest flaws was deemed to be of the highest quality.

However, with modernization and increased competition, producing non-defective products is no longer enough; the new challenge is to outperform the competition.

This prompted Professor Noriaki to investigate what customers desired. He was looking for proactive measures that brands could rely on to maintain and improve customer loyalty levels. 

He enrolled 900 participants for his study to demonstrate how customers’ emotional responses to products work. He concluded that quality should be a two-dimensional relationship.

The dimensions are customer needs fulfillment (i.e., product functionality or performance) and customer satisfaction. 

Professor Kano developed a functionality scale that ranges from best to good to basic to some to none. This scale investigates how customers decide whether a product is valuable enough for them to buy it.

He also developed a satisfaction scale that ranges from delighted to satisfied, neutral, dissatisfied, and frustrated. This scale assesses customers’ actual emotional responses to products.

Why Would You Use Kano Analysis?

• Measuring customer satisfaction
• Enhance and optimize customer satisfaction
• Product features vs customer fulfillment
• Product features that are not yielding returns on investments for the organization. 
• New products that will excite customers

Benefits and Advantages of Kano Analysis

• It helps in analyzing competitive products. The Kano analysis reveals exactly what fulfillment the competition has to offer that you do not.
• It responds to what customers consider non-negotiable features of a specific product. So the product team knows what to prioritize and what can be dropped.
• The analysis help organizations save money by pointing out product features that should be eliminated or reversed to improve customer satisfaction.
• When there are tight deadlines, the Kano analysis expedites decision-making because peering into the minds of consumers is always a reliable way to assess how to improve a product.
• The Kano analysis is also relatively inexpensive because it only requires customers to answer a few questions. You don’t even need to hire a professional to create the questionnaire; you can simply create a survey to ask customers to rate each product feature.
• It prevents overloading customers with unnecessary or unappreciated features. The product will be lean and contain only features that customers value.

Disadvantages and Weaknesses of Kano Analysis

• There is no accurate gauge of qualitative customer satisfaction in Kano analysis; it focuses on the quantitative aspects of customer satisfaction. So, it cannot reveal the precise extent and causes of customer satisfaction or dissatisfaction.
• The survey results still require analysis and interpretation. You will need to have skills or hire someone who knows how to interpret the results and apply them which may cost you money.
• Kano analysis is customer-driven; it ignores the organization’s required production capacity and costs. It does not even consider the possibility of working solely with the priorities of the customers.
• The Kano analysis does not account for the heterogeneous nature of customer groups. Different demographic groups would feel different about the same product features because their needs are different. 

How Does Kano Analysis Work

According to the theory, a product must provide emotional satisfaction to customers in addition to functionality. This means that a product may have the features customer needs and they’ll still be unimpressed by it.

For example, people buy cars for transportation but then upgrade to newer models because they are dissatisfied with their current model and want the new model’s features.

Applying Kano analysis helps organizations’ product teams understand basic customer needs and additional features that will impress and retain customers.

The end goal of any Kano analysis method is to measure customer satisfaction. So,  frame your questions in a questionnaire or survey to elicit the range of feature categories in the Kano analysis.

The best two questions for determining the product attributes are:

• Rate your satisfaction with this attribute of the product
• Rate your satisfaction with the absence of this attribute of the product

The range of responses provided by customers will now tell you how customers feel about each attribute of the product. For example:

• I like it
• I find it necessary
• I am neutral about it
• I don’t mind its presence
• I dislike it

Those responses that fall under necessary and neutral are usually what the consumers consider as necessities that the product must provide- the “Must-be.”

Customers’ responses that hint at appealing attributes may be used as a cost-cutting factor. You can ask customers if they are willing to pay more for the continued enjoyment of the product’s exciting features.

Categories of Features in Kano Analysis

The potential emotional reactions of customers to product features classify those features into five categories-

• Must-be

These are the main qualities that the product must have. Their presence does not improve the product, but their absence causes significant dissatisfaction. They are also known as threshold features.

A customer renting an Airbnb, for example, expects it to be clean and have a bed. It is the bare minimum. Customers expect these features to always be present, so they don’t even bother to mention them.

• Performance Features

An increase in these features will lead to higher customer satisfaction. They are also known as one-directional attributes.

For example, a car with a standard storage tank is okay and falls under the “must-have” category, but an increased storage tank for the same car becomes a performance attribute that increases customer satisfaction.

• Attractive

Customers are pleasantly surprised when a product has these features. They would not have noticed if these features are absent nor would they be dissatisfied.

However, the presence of attractive features over time raises them to the status of “must have” features. Customers may begin to expect them to be the bare minimum if competitors copy them, and they will lose the initial excitement they provided.

• Indifferent

These features have no impact on customer satisfaction. They should be removed if they are not needed for the product’s functionality and are simply consuming resources.

• Reverse

These are not even present on the Kano graph. So you’d know that they bring dissatisfaction to the customers.

Customers tend to experience feature fatigue if a product is overloaded with features, so it’s best to get rid of them.

How to Apply Kano Analysis Results

• Using in Conjunction With NPS or Customer Reviews or Feedback

Net Promoter Score (NPS) is a single-question survey used to assess a company’s customer loyalty. 

Would you recommend [Organization X/Product X] to a friend or colleague? Their answers should range from 0 (not at all) to 10 (very likely). 

Loyal customers usually give a score of 9 to 10, while satisfied but unimpressed customers give a score of 7 or 8. Those who tick 0-6 are extremely dissatisfied and may even discourage others from using the product.

Analyzing customer feedback with the Kano analysis graph enables your product team in developing positive features and increasing customer satisfaction. As a result, your NPS will rise.

• Benefit vs Cost Modeling

Once you’ve identified your customers’ top priorities, you can tailor your product’s features to meet them. Examine each feature’s cost and benefit model to see if it provides an acceptable return on investment. 

Then you can easily eliminate features that cost you money but provide no benefit to customers. This will save you time and money during your product development cycles.

• Deciphering Persona Traits  From Kano Results

The answers from the Kano analysis make it easier to divide your audience into segments. Likes and dislikes shared by certain demographics are easily visible.

This helps you identify what each segment wants and improves your sales and marketing efforts. It helps you draft and direct future marketing efforts to each of your marketing personas.

• Improve Your Products and Services

Kano analysis helps you generate ideas for future products. Once the analysis provides insights into what customers find essential and attractive, you can use those ideas to develop similar or improved products in the future.

After applying the Kano analysis categories to all of your product’s features, you can even draw the Kano analysis graph to show where each product feature fits.

It also helps you improve the positive features, such as performance and attractiveness, and eliminate customer pain points.

Best Practices and Tips for Kano Analysis

• Don’t overwhelm your customers with questions. An excellent range of questions to ask is 20 and they should be about relevant product features.
• Get the best data by having clear and simple questions. 

Avoid asking questions that your customers could easily misinterpret. Check to see if the questions you’re using can elicit unambiguous responses.

• To avoid an indecipherable exercise, try to include or follow up on your Kano analysis-inspired questions with a technique for collecting qualitative responses as well. 

It will explain the “why” behind the many options available to customers for each product feature.

• Hear from all your customers. Choose a sample that represents all of your target personas, market segmentation, and customer segmentation.

Conclusion

The Kano analysis is the best place to start if your product team is looking for customer-driven inspiration to create a new product or modify features of an existing product. 

It will save money and time because it provides a clear window into how customers rank each product feature.