In the on-going war to increase customer loyalty, should you focus more on responsiveness or that cool new feature? Halve your telephone queue wait time or revamp your website? These are difficult questions to answer but Kano analysis is one tool that you can use to help you make a decision.
What is Kano Analysis
Kano Analysis is a way of classifying product and service attributes into the three key types of attributes: Hygiene, Performance and Excitement Attributes.
Each of these product and service attributes has a different relationship with customer loyalty. By splitting them apart you can more effectively prioritise where to invest precious time and dollars to improve customer loyalty.
So Who is Kano?
Noriaki Kano is an educator, lecturer, writer and consultant in the field of quality management. He is a professor emeritus of the Tokyo University of Science. 1
Kano Attributes Defined
Note that different authors call these attributes groups by different names but the concepts are all the same.
These are attributes that customers expect you to deliver but delivering more or better on those attributes will not drive customer loyalty or increased Net Promoter scores. The problem is that not having those attributes will impact substantially on your customer loyalty.
Typical hygiene attributes include:
- Bank statement accuracy: customers simply expect statements to be correct. Not having any errors will not win you any customer loyalty but one error will decrease it quickly.
- Hotel room cleanliness: past a certain standard additional room cleanliness is not important. Hospital grade sanitization of the glasses in a hotel room will not win you new customers but a lipstick smudge will lose you some.
- Adhere to employee safety standards: you need to ensure that your staff are safe but at some point increasing complexity maxes out customer loyalty impact.
These are the attributes that you simple must get right to even be in the competition. They are often called “table stakes.”
In contrast to Hygiene Attributes, Performance Attributes do directly drive customer loyalty. The more/better the attribute the more/higher will be customer loyalty. For instance:
- Ease of website use: an easy to use website will make more sales than a confusing layout that is difficult to navigate.
- Website responsiveness: Google has done extensive research on this area and confirms that faster websites make more sales.
- Increasing functionality: For the most part increasing the functionality of, say a piece of software, will increase the customer loyalty. Note that this is not a continuous curve and many would suggest that Microsoft Word, for instance, has so many features that adding a new one probably does not change customer loyalty.
Excitement Attributes are the ones that we all want to find. These are the attributes that just need to be there, almost no matter how poorly implemented, and they will garner huge customer loyalty. The problem is that these attributes are hard to find and even harder to keep:
- Having an e-commerce enabled website: it’s hard to believe but not too long ago just having an e-commerce capable website was an Excitement Attribute. The ability to log-on, select, purchase and have your product delivered at 10pm at night was a boon. Now of course it’s expected.
- Twitter support: Do you remember when companies started actively monitoring and responding to customer Tweets? That was a way to drive loyalty, now if no-one responds to your tweet within 30mins it’s reason to move your business.
- Frequent Flyer miles: when American Airlines first launched their frequent flyer program it was a game changer and a real reason to be loyal to the company. Now it’s hard to find the differences between different airline programs.
The biggest problem with Excitement Attributes is clear from these examples. They don’t stay exciting forever. In fact they almost always have a use by date so you cannot rely on them long term. But while they last they can be real drivers of customer loyalty.
Where do you find these attributes?
So then the question is how do you find these attributes and ensure that you are delivering on them for your clients?
The chart above shows some of the ways that you can identify old and new attributes of all three types. If you are using the Net Promoter Score® approach then you have some additional tools at your command.
Combining Net Promoter® and Kano Analysis
Note that you can run all of these processes by product, business or customer segment, if you can extract your data on that basis.
A simple way to look for Hygiene attributes is to focus on feedback from your low “would recommend” scores. Start with 0, 1, 2’s or even Detractors and extract all of their comments. When you have a good list of qualitative feedback, look for some common themes in the data.
This can be done manually using simple brainstorming or outline software. I find Microsoft Word is better than Excel for outlining because you can move the data around more easily but there are other tools.
These attributes can typically come from any of your customers but those around the 6-8 scores will probably provide most of the relevant information in this area.
Again, extract all of your comments and review for themes as you did for the Hygiene attributes.
Look to Promoter comments for potential insights in this area. Often these are the customers to which you are most aligned and who are most engaged with your brand so they can provide some excellent insights into what other, similar, customers would find exciting.
It might sound boring to have to read all of the customer comments but as one client told me: 1 in 1,000 customer comments is the core of a game changing business concept. You don’t want to miss that opportunity, do you?
Measure Performance and drive change
Once you have a good idea as to what the different attributes are you should circle back and put them into your customer feedback process. If you think that Attribute A or Attribute B is a hygiene attribute for your business you need to ensure that you are delivering on it well enough to push it below the conscious level with your customers.
For Performance Attributes, more is better so continue to invest in them to build customer loyalty.
If you find an idea for an Excitement Attribute start to investigate how you could build it into your customer experience.
Have you ever done a Kano Analysis on your customer feedback? What did you learn? Let me know in the comments section below.