What is Kano analysis and how do you use it?  Kano Analysis is a tool that helps you understand how changes in your service and product offering drive increased interest and satisfaction.  Our guide to the Kano Analysis model will show you how this tool can help your organisation better understand how to improve customer satisfaction and motivate customers to choose your products and services.

At the heart of Kano Analysis is the understanding that while several features may be viewed as important to a customer, changes to that feature can have very different impacts on satisfaction or using your service.

You may have seen this difference already when a customer tells you something is important, but when you make improvements, nothing happens!  Yet a small change in another area has a much more significant impact than expected and something that was ranked as important suddenly becomes critical.

Kano Analysis looks at the dynamic relationship of importance.  How changes in a feature can have non-linear impacts, and how can changes in other features or contexts change how people value.

 

What is kano analysis?

Kano Analysis was originally developed by Dr. Noriaki Kano (pronounced “Kah-no”) to understand how to prioritise investment in improved product quality based on what features were likely to lead to improved satisfaction.  As a professor of quality management at the Tokyo University of Science, Dr. Kano understood that technical improvements do not always improve perceptions of quality or make customers feel more satisfied.  He wanted a way to understand how emotions (interest and satisfaction) changed as quality changed or features were added.

Compared to understanding the importance of features in the current form and in isolation, this was a more strategic way to prioritise investment and understand what drives behaviour.

In developing his model, Dr. Kano discovered there were five ways that changes in features impacted satisfaction.

  1. Must have features
  2. Performance features
  3. Attractive features
  4. Indifferent features
  5. Reverse features

 

The Five Categories in the Kano Model

The five categories of features show how customer reactions change to changes in a feature.

Kano Analysis Summary

Hygiene Features (Must-Haves)

Hygiene Features are features that no longer improve satisfaction or drive decisions once they meet a threshold.  These features are considered Must-Haves, because without them, customers feel the product or service is not meeting their core needs.  For example, increasing fluoride levels in toothpaste beyond regulatory levels does not increase interest in buying, increasing the frequency of rubbish removal beyond a certain level, or opening hours for some services.  The level of delivery meets the needs.

Customers will abandon you or become very dissatisfied if these features become absent or fall beneath needed levels.  Airline safety is a classic example.  Once an airline has a safety issue, customers are only interested in having that feature fixed.

Must-haves are also referred to as Basic and Hygiene Features because they are foundational to the health of a service.  Hygiene Factors are also the same as Hygiene Need in the two-factor theory of motivation.

Caution:  Features are Hygiene Factors may appear in studies as unimportant because they are assumed to be met. 

 

Performance Features

Performance Features behave in a more predictable linear way to changes.  As they are improved, satisfaction increases.  As they decline, satisfaction decreases.  In the case of products, the probability of choosing changes linearly.  Examples of this feature are service response times, computer memory and speed, price/ fees (sometimes!) and the variety of vendors at a community fair or people attending.

Caution:  Performance Features at their extreme can change behaviour because they become seen as a different type of feature.  For example, increased variety can be seen as overwhelming, or event popularity becomes framed as too crowded. When this happens we need to understand the difference between a feature and its underlying attributes.

 

Delight Features

Delight Features are the opposite of Hygiene Features.  Delight Features only become important once they meet a threshold.  Delight Features are often only considered once Hygiene Features meet basic needs.  An example of Delight Features is environment-sustainable features.  Only once people know a product or service will be delivered do they value environmental claims.  Only when customers know they can easily access your service do they value customer loyalty giveaways.  In childcare, parents value extra-curricular activities like music when the basics of care and education levels are met.

Delight Features are similar to higher-order needs in Maslow’s Hierarchy of Needs, with lower order (basic) needs having a similar role Hygiene Factors.

Delight Features can differentiate offers and add excitement to an offer.  The Aldi special offers leverage this principle.

 

Indifferent Features

Indifferent Features are those features that a product or service has or a business offers that has no notable impact on satisfaction.  They are unimportant!

Caution:  Hygiene and Delight Features can be mistaken for Indifferent when they are above or below their needed thresholds.

 

Reverse Features

Reverse Features are features that people don’t want.  Adding them leads to dissatisfaction or avoidance.  Organisations rarely add these features deliberately.  An example of a Reverse Feature was the infamous Microsoft Paperclip.  This early AI would continually appear to offer help, but it just made it harder to get things done.  Some of the new AI features, along with some applications and websites, may also become reverse features.

Caution:  A Reverse Feature may be an incorrectly implemented feature.  

In a study for telecommunications providers, customers felt a dedicated account team would increase satisfaction, yet when it was added, satisfaction fell.  The cause of the fall was not the initial idea of having well-trained small business staff that could reduce resolution time but increased difficulty in accessing service for small businesses that required additional stages to get to the account team.

 

How Features Can Change Over Time

How features behave can change.  As discussed, a feature that may appear Indifferent can become Delighter once all Hygiene needs are met. This change could be driven by your organisation’s continual improvement, by others, or by context.   For example, the environment has become more critical in consumer decision-making, with recycled material a Hygiene Feature.  Customers may also expect free Wi-Fi access as part of the service offering when using a library or hotel.

It is essential to periodically review how your service offering is viewed and improve priorities.

The diagram below shows how each of the features relate to each other visually for changes in quality and delivery levels.

Kano Analysis Diagram

How Do You Conduct Kano Analysis?

In undertaking Kano Analysis, we use different approaches to best match the situation and client needs.

  • Qualitative research
  • Surveys
  • Choice modelling (experimental design)

 

Using Qualitative Research for Kano Analysis

We need to understand what features are used and how they change over time, as well as other features, so we use qualitative research—interviewing people to understand how having something and its changes would shape their views and behaviour.  Using qualitative research, we can also understand potential segments and the impact of broader factors like life stage on their interpretation of factors.

In qualitative research, we can also explore why a factor is important by using methods like laddering.

Using qualitative research for Kano Analysis is ideal when you explore a wide range of features and want to understand how different contexts impact the satisfaction and value of features.

 

Using Survey Research for Kano Analysis

With a survey, we asked two questions to classify each feature into the kano groups.  The first question asks how a person would feel if the feature was offered, with the second question asking how they would feel if it was not offered.  For features with different levels, follow-up questions ask how a person would feel about the product or service if that feature was changed.

When there are many features, an additional question asking how important a feature is can help to prioritise further which features to include or develop.

Survey-based analysis is ideal when you have many features and want to understand how different segments value features differently to help market segmentation.

 

Using Choice Modelling Research for Kano Analysis

The most sophisticated approach to undertaking Kano Analysis is using choice modelling.  Choice modelling, a type of conjoint analysis, is a statistical and experimental design technique used to understand the relative importance, referred to as utility in economics, for different features and levels.

In choice modelling, a person is shown a series of offers and asked how satisfied or interested they would be in that option.  Each option is experimentally adjusted to allow testing that shows how important a feature is and how that importance interacts with other features — producing a dynamic understanding of feature importance.

By mapping out changes in utility for each feature, we can classify and understand each feature.

With choice modelling, we can also include price and forecast potential demand.  Adding additional strategic insights into the analysis allows for a more fine-tuned cost-benefit analysis.

Choice modelling is preferred to undertake Kano Analysis when you only have a few features and levels to test.  Choice modelling is a powerful technique that requires larger sample sizes and can quickly become complex as more features are added.

 

Where to Use Kano Analysis In Your Business

There are several ways you can use Kano Analysis in your business.  Kano Analysis is used when you need to understand the importance of features and how that importance changes.  Kano Analysis is ideal when you need to prioritise and decide how to develop your products and services.   The main areas where Kano Analysis is used include:

  • Designing new products and services
  • Prioritising the development of features
  • Segmenting your market based on their needs

 

How can Eris Strategy help you with product and service development?

Kano Analysis is one of the techniques we use to help clients build and transform their business.  When looking at using Kano Analysis with clients to work closely with, we need to understand not just what features they can offer customers but also the cost implications of different levels and what those levels could be.

Before taking those features to the market to test, we also determine who the target market is and who we need to include in the study to provide the right insights to support decision-making.   Once we have the needed insights and classification of each feature, we then workshop the results with clients to help them determine which features they need to provide, and which will provide the best return on investment.