A Real-World Application of The Kano Model of Customer Satisfaction and Loyalty

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While traveling recently for a business meeting, I read an article in USA TODAY reviewing some findings from a travel study conducted by the Global Business Travel Association (GBTA) Foundation. It struck me that some of the findings from this study represent a good example of how the Kano Model applies to managing customer satisfaction and loyalty.

The GBTA survey included 1,650 premium-class fliers around the world. The study was filled with a number of interesting findings relating to what first-class and business-class fliers want from an airline. Two factors in particular were most important in deciding which carrier to fly. Among these global flyers, 84% said that an airline’s safety record and reputation mattered most when deciding which carrier to fly. And 67% said that it was important that the carrier offer seats that fully recline (i.e., lay flat). A number of other comfort-related features such as access to airline lounges, internet access onboard, food quality, etc., were also mentioned as being important to enhancing the experience. But these other factors were not as universally expressed as safety and lie-flat seating.

The Kano Model

These airline survey results are very much in-line with the Kano Model as it applies to customer satisfaction and loyalty. Basically, the Kano Model emphasizes the importance of differentiating between performance that drives customer dissatisfaction from performance that drives customer delight. Poor performance on things that dissatisfy customers (i.e., ‘Key Dissatisfiers’) will have a dramatic impact on overall customer dissatisfaction and can create disloyalty, while even slight improvements in performance on things that delight customers (i.e., ‘Key Enhancers’) will increase overall customer satisfaction and create long-term loyalty. The trick is to know which areas are Dissatisfiers, which are Enhancers, and which act like both (i.e., they are both a Dissatisfier and Enhancer—which GfK calls a “Dual” Dissatisfier/Enhancer).

In terms of the global airline business, keeping planes reliably in the air is a far more important in preventing dissatisfaction than installing lie-flat seating, throwing open the airline lounge door, or offering some spiffy cuisine at 35,000 feet. However, once the safety reputation of the airline is well established and maintained, then the comfort-delighters (i.e., Enhancers) become critical to future growth and customer preference.

Differentiating and understanding customers’ perceptions of performance on these three types of expectations are critical to any business:

  • Failing to meet minimum expectations on any Key Dissatisfier will critically harm a company, lead to suppressed financial outcomes, and increased customer churn. Most often, avoiding poor performance perceptions on any Key Dissatisfier becomes a top priority for most product or service providers. At the same time, expending precious corporate resources to greatly exceed customer expectations on these same Key Dissatisfiers can be wasteful, and may not have a positive impact on business results.
  • Failing to deliver exceptional experiences on Key Enhancers may not drive customers away, but exceeding expectations (even just a little) will delight customers, create points-of-difference from competitors, lead to stronger sales/profits, and heightened customer preference and choice.
GfK applies the Kano Model to help our clients better understand what to focus on and how to effectively prioritize product or service performance-improvements that will have the most impact on overall customer satisfaction and loyalty. The top priority is to avoid customer disappointment on the expected “basics” of a business (i.e., Key Dissatisfiers). Next, it is important to delight customers on attractive elements (i.e., Key Enhancers) to create differentiation and a competitive advantage.
 
Do you know which performance criteria are the Key Dissatisfiers and which are the Key Enhancers for your customers? Do you know how well you are performing against customers’ expectations on these criteria? If not, you are missing the chance to effectively focus your company’s performance-improvement efforts and precious corporate resources on the things that matter most to your customers—the ones that also have the greatest impact on achieving your corporate financial/growth goals and putting distance between you and key competitors.

Republished with author's permission from original post.

Erik Andersen
Erik Andersen is Senior Vice President, GfK Customer Loyalty. He provides research design and customer management consulting to clients who oversee customer loyalty programs in a wide variety of business sectors both domestically and globally. Erik has over 25 years market research experience, including positions on both the client and supplier sides. Prior to GfK, he held senior positions in the market research functions at the Carlson Marketing Group, Ecolab Inc., and the Lutheran Brotherhood (now Thrivent Financial).

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