The Kano Model - Helping CX Leaders Prioritize?

One of the key goals of every CX Leader is to increase Customer Satisfaction. Todays CX world offers endless possibilites, including GenAI solutions. However, as budget and ressource availability is limited, it's essential to prioritize those actions which will drive measurable improvement and ROI for their organization and customers.

This article sheds some light on an approach which helps CX Leaders identify those areas, where changes can drive the biggest improvement and thus help prioritize actions, budget allocation and ressources accordingly. Consequently, develop an effective customer satisfaction improvement strategy by focusing on customer expectations in a structured manner.

The Kano Model is an approach in product development and customer satisfaction analysis to understand how different features or aspects of a product or service impact customer satisfaction. It was developed by Professor Noriaki Kano in the 1980s and is often used in CX to prioritize improvements effectively.

The Kano Model divides product or service features into five categories based on how customers perceive them and their effect on satisfaction:

1. Basic Needs (Must-be)

These are the essential features that customers expect. If these basic needs are not met, customers will be dissatisfied. However, if these needs are met, they don’t necessarily lead to increased satisfaction because they are simply expected.

An example is Service Level / ASA, customers expect timely responses. If the support does not adhere to certain defined SLAs, dissatisfaction arises, but meeting them or increasing them won't necessarily lead to extra praise since they are expected by Customers as "basic needs".

If you are not meeting the “must be’s", work on these first to eliminate low performance. Don’t manage “must be’s” as “more is better”, more of it (in this exmaples a higher service level / ASA) wont increase your customer satisfaction results.

2. Performance Needs (One-dimensional)

These are the features that directly affect customer satisfaction. The better these features are, the more satisfied the customer will be, and the worse they are, the more dissatisfied the customer will be.

As an example you may consider issue resolution. The higher the issue resuliton, the happier the customer will be. Conversely, a low issue resolution will cause dissatisfaction.

These are characteristics where the better you get, the higher the customer satisfaction. These characteristics should be maximized since they will increase your customer satisfaction!

3. Delighters (Attractive)

These are the unexpected or innovative features that pleasantly surprise customers and create excitement. These features can significantly boost satisfaction, but their absence doesn’t cause dissatisfaction because customers don’t expect them.

For example a gift card or Customer loyalty bonus, if you provide them to Customers they may be delighted, but the absence of these in a "routine" customer service scenario does not necessarily lead to dissatisfaction.

4. Indifferent Needs

These are the features that customers don’t really care about. Whether they are included or not doesn’t really affect customer satisfaction. Therefore it is important to understand which of your service features dont really add value to the customer satisfaction but may mean investment for your organization.

An example can be the related to the font of your Email message to a customer. If the customer doesnt pay attention to the font type, the font will not add any value.

5. Reverse Needs

These are features that some customers might like, but others dislike. In some cases, offering a particular feature can lead to dissatisfaction for certain customers.

For some customers, automatic software updates are a benefit, but others may find them frustrating due to unwanted changes cuasing dissatisfaction. Another example could be the contact channel, if a customer has a prefferred channel the customer doesnt care a lot about other channels and may perceive the forced push or transfer to another channel as generating dissatisfaction.

Therefore its key to understand your customer clusters better, to calculate risks or provide the option for your customers to chose their preferred solution.

How It Helps CX Leaders?

In simple terms, the Kano Model helps CX leaders focus on the most impactful areas when improving customer satisfaction:

• Meet basic needs to avoid dissatisfaction.
• Optimize performance features to drive satisfaction.
• Invest in innovative features (delighters) to differentiate and surprise customers.
• Prioritize where to spend resources by understanding which features provide the most significant benefit.

By categorizing features, businesses and CX Leaders can better align their service/product development strategies with customer expectations and drive a more effective CX strategy. However, to be able to do that, you have to be able to understand the "key drivers" from your customer perspective first.

How to Use the Kano Model Approach?

To effectively apply the Kano Model, you need a clear structure and process for gathering, evaluating, and acting on customer feedback. The data collected from your customers and CX operations should have a high data integrity, be organized and analyzed to identify the factors that significantly impact both customer satisfaction and business outcomes.

Typically, a multiple regression analysis is used to identify key drivers of customer satisfaction. Some companies also ask customers to rate how important each attribute is, alongside their satisfaction with that attribute by conducting specialized Key Driver Surveys on a regular basis, such as every six months. These surveys help not only to assess satisfaction with specific drivers but also to understand the importance of each factor to your customers.

The following is an example of understanding key satisfaction drivers within a business and their relationship with customer satisfaction based on a project that COPC conducted:

The analysis conducted by COPC and the example above revealed some traditionally over focused as well as under focused drivers. As you may have noticed, the "more is better" approach is relevant for satisfiers of which usually the most commonly found drivers are "Issue resolution" followed by "Accuracy". However, it also revelead surprises which werent known to the CX Executives before COPC conducted the project. This gave the brand the opportunity to focus on selected drivers of customer satisfaction and prioritize their ressources and investments to improve these drivers, consequently the customer satisfaction and overall customer experience.

While the above exmaple only focuses on satisfaction drivers and doesnt take dissatisfaction drivers into account. It's recommended to conduct an analysis for dissatisfaction drivers as well since these reveal different insights from the satisfaction drivers to ensure to minimize customer dissatisfaction. The "Must Be" to meet the minimum acceptable level, or in other words "the sweet spot", for dissatisfiers are usually Service Level / ASA / Cycle Time, followed by lack of empathy, lack of friendliness / courtesy and last, poor agent communication and understanding.

Obviosuly, satisfaction and dissatisfaction drivers differ by business type, industry and other factors. The above is just an indication of the typical drivers but every organisation shoud be conducting analysis accoridngly to identify those drivers specific to their customers.

Following the analysis of key drivers, the next step would be to understand the root causes for why a specifc driver is "as-is" and the required steps for change. For example, as issue resolution is typicall found being an important satisfaction driver in our experience, from more than 2500 global COPC assessments, only 20-25% of the reasons for poor issue resolution are agent-caused defects. In the majority of cases, 75%-80% of issues impacting resolution are process issues, such as:

• Company Policy
• Customer Expectations being unrealistic
• Tools or sytems issues
• Wrong content in the knowledge base

Conclusion

Using the Kano Model in CX operations, CX Leaders and businesses can create more effective strategies that align key drivers for customer satisfaction and dissatisfaction with their customer experience strategy. This approach not only helps to prioritize ressources and investments, but also enhances customer satisfaction driving brand differentiation in a competitive market.

The Kano Model presented above is also part of our COPC training programs. For more detailed insights on the Kano Model as well as revealing key drivers of your customer satisfaction and dissatisfaction, please contact me and we would be certainly delighted to assist in helping you to find and deploy the perfect balance between improving quality and service, while reducing costs!

About COPC Inc.

At COPC, we've helped hundreds of brands in the past 29 years improve their customer experiences by deploying proven approaches and methodologies exceeding 49x ROI measured. Our methods are grounded in data, not guesswork, utilizing scientific approaches to improve CX. From small 20-seat operations to 5,000-seat enterprises, contact centers of all sizes have benefited from COPC's expertise. We don't just understand CX challenges – we're committed to solving them – and our promise is clear: We will improve the performance of your CX operations.

Our journey-based design approach combines process redesign, strategic technology implementation (including knowledge management systems, AI-powered bots, AI-driven agent assist technologies, etc.), training and education as well as optional COPC certification, with each solution tailored to each client's unique needs and goals. For example, our approach has recently unlocked the real ROI of optimized agent assist technology for one of our clients:

• $728,000 annual savings for a 100-agent contact center
• 4-5 month average payback period
• Significant improvements in agent satisfaction and retention

Whether it's customer satisfaction improvement, efficiency optimization, technology optimization or transformation - COPC Inc.'s expertise in CX transformation helps you achieve and exceed your goals. We don't believe in "revenue at any cost." Instead, we only propose valuable solutions that genuinely benefit you and your organization, so we work in partnership with you to make sure that our consulting, training and technology solutions are 100% what you need and are backed by our experience and research!