Hearing what they say
Editor’s note: Karen P. Gonçalves is president, and Michelle P. Gonçalves is a consultant, at Delphi Market Research, Inc., Medford, Mass.
Honeywell Corp., a large manufacturer of consumer, industrial and commercial products and services, conducts extensive research as part of its product development process. The most important underlying goal for all of its customer research is to use customer input to improve product-related decisions.
Honeywell has experimented with several processes, and several divisions that operate in commercial and industrial markets have agreed to rely on a multi-step research process which they call the market driven product definition (MDPD) Process. One step within the MDPD process is a Kano method survey, for markets large enough to justify a survey. Among other things, Honeywell uses the results of these surveys to determine which products to develop or change, and how development resources should be allocated — in other words, it meets their most important goal of providing relevant customer input to decision making.
Honeywell’s new product development process includes a range of internal and external exploration and analysis, with the early stages of the process focused on developing an extensive qualitative database on customer needs, applications, and preferences. Once qualitative data has been collected, a Kano method survey is completed as a way of quantifying some of what the firm is learning.
At Honeywell, Kano is used to validate and refine two things: first, what was learned during the earlier steps in the new product development process; second, the new product development process itself.
Several years ago, Honeywell was using quality function deployment (QFD) analysis, often referred to as the house of quality (HOQ) process. Honeywell found that for its particular business, QFD/HOQ was not being consistently applied, and as such, the firm recognized the need to evaluate other “voice of the customer” processes. It decided that future processes should provide a thorough, easy-to-follow logic and structure, to help ensure consistent administration of whatever techniques were used.
Honeywell worked with a consulting firm to develop the multi-step process it now uses. This method includes a Kano method survey, so two Kano surveys were completed internally. Honeywell learned a great deal, but felt it could benefit from outsourcing future Kano work. It contacted Delphi Market Research, Inc., and Delphi has been assisting Honeywell with the Kano portion of its process since then.
What is the Kano method?
The Kano method, developed by Noriaki Kano of Tokyo Riko University less than 10 years ago, is a new technique in a researcher’s toolbelt. It is related to conjoint analysis, in that comparisons, rather than discrete answers, are an important part of the interpretation. But unlike conjoint analysis, the respondent is not asked to make trade-offs or choices among options. Rather, respondents independently rate their pleasure or displeasure with the way in which up to two dozen variables are delivered to them. The pleasure/displeasure answers allow researchers to classify each variable as “attractive,” “one-dimensional,” “must-be,” or “indifferent.”
An attractive attribute is simply that - attractive. There is no penalty for not including an attractive element, but including it makes the product or service better to use (i.e., enhanced functionality), differentiates it from competing offerings, and “delights” the user. Customers will often pay a premium for products and services that include attractive attributes.
A one-dimensional characteristic is one for which more is always better. A lower degree of functionality in a one-dimensional characteristic will displease customers, and a higher degree of functionality will please them.
A must-be characteristic is one the customer considers essential. It is much closer to binary than a one-dimensional characteristic. Without it, a consumer will not buy - you are not a serious contender in an industry unless your offering provides all of the must-be characteristics.
An indifferent attribute is one that consumers do not value. It is important to note that each segment of your market may be indifferent about different characteristics. While this may not be the case for a product or service with a very narrowly defined use, a general use product or service may have a large degree of variation in the indifferent category from one target market to the next.
Once each variable is categorized as attractive, one-dimensional, must-be or indifferent, researchers use the rest of the survey instrument to further break down and understand consumer needs and preferences.
Issues when applying the Kano method
An important issue emerged almost as soon as Honeywell decided to use the Kano method - how to word the scale for part one of the Kano questionnaire. There are four parts to each Kano method questionnaire, and the first is a series of paired comparison questions that are answered using a five-point ordinal scale.
The first U. S. published article on the Kano Method, which appeared in the Fall 1993 issue of The Center For Quality Management Journal, provided the original scale designed by Dr. Kano along with several variations developed by early adopters of this method. In each case, companies using this method believed that rewording the scale would yield more useful results. The original wording of the scale, as first introduced by Dr. Kano, along with three typical paired comparison questions is provided in Exhibit 1.
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The Honeywell team was not in agreement about the wording of the five-point scale. Some clients have used the scale as is, to help build experience and a body of knowledge about the scale, while other clients have revised the wording. Honeywell tried several variations over the course of a year, and after considerable discussion and experimentation agreed on a revised scale. It now uses the exact same wording for all of its Kano method surveys, to ensure consistency over time and across markets.
There continues to be considerable debate about how to word the five options among firms using the Kano method. As long as experimentation continues, it will be difficult to determine which (if any) set of words is “best” across all markets. However, regardless of the final scale used, the goal is to include a scale for which each available choice is clearly understood and there is no confusion about what each choice means.
The second big issue to emerge was how to word the paired comparison questions in part one. It is very difficult to word each pair so that one half of each pair will be viewed as “functional” (positive) and the other half as “dysfunctional” (negative, or at least less positive than the functional half). Furthermore, it is often difficult to determine how general or specific each question should be. If the questions are too general one may not learn a great deal from the research. If the questions are too specific, there may be too many “indifferent” responses, as respondents may not have strong opinions about subtle product changes.
When it completed the first Kano survey, Honeywell found that a larger percent of questions than anticipated fell into the “indifferent” category. This was useful, as it helped the company determine priorities for further development. However, it had hoped to discover more about the other three categories - attractive, must-be and one dimensional.
Respondents will only spend a certain amount of time on a survey, so there are limits to how many variables can be tested in a single questionnaire. Every “indifferent” characteristic takes the place of what a client might have learned about the other three categories. Therefore, one of the goals for later Kano surveys was to rule out as many potentially indifferent attributes as possible, replacing them with pairs that had a high potential to fit into a more helpful category.
Honeywell accomplished this in four ways. First, it refined the earlier steps in the product development process, to help identify and rule out “indifferent” attributes before it was time to complete a Kano method survey.
Second, to the extent that it is practical, Honeywell matched what customers actually said with the wording of each paired comparison question.
Third, the firm worked with Delphi Market Research on the final wording for each paired comparison question, to make sure each included both a functional and a dysfunctional half.
Fourth, Honeywell and Delphi both pre-tested each proposed questionnaire, and revised them as appropriate before each survey was administered. Steps two and four are particularly satisfying to Honeywell, because they provide a very effective way to use direct customer input to make decisions, even during the research process.
Results
The results were both surprising and rewarding. During the first year Honeywell and Delphi worked together, they jointly completed five Kano method surveys, all for highly technical, complex commercial and industrial products. Honeywell has been in these businesses for many years and has devoted considerable effort to remaining up-to-date on the needs and preferences of its customers. Despite this, there were several surprises.
In one market, Honeywell thought it understood all the applications for a group of products used in factory automation and in vehicles. As a result of the Kano survey on this product line, the company learned about some additional product uses, and has since been able to respond with product refinements.
For another product line that is sold into commercial and military markets, Honeywell knew that differences existed in customer needs and preferences, but did not fully understand why. The Kano survey was extremely helpful in defining and confirming these differences, as well as the reasons why these differences exist. With this new knowledge, the firm has been able to re-focus its development efforts and its marketing materials and approaches.
In another instance, Honeywell had developed a new technology, and customer reaction was being tested through the Kano survey. The firm was prepared to devote considerable resources to a new line of products using this technology. Surprisingly, customers thought the new technology was interesting, but they felt that it offered no constructive benefits and did not want to pay more for the new technology. Therefore, unless or until a viable market is found for this technology, internal resources will be used elsewhere.
An aspect of Kano that Honeywell finds most helpful is the ability to sort and order data into the four Kano categories — attractive, one dimensional, must-be and indifferent. Another aspect the company finds particularly useful is the ability to rate and rank attributes within each of these four categories. By using the complete analysis, Kano method users can decide exactly how to deploy their development resources, and which aspects of product or service development can wait or be halted.
The category and ranking data which Kano generates have been extremely helpful for Honeywell executives, as they allow the firm to make decisions based on quantifiable results, as opposed to the earlier-stage qualitative data, which can be hard to interpret. The earlier-stage data is critical in developing broad directions and in understanding customer needs, applications and preferences. However, only with quantifiable results can solid decisions be made. As one Honeywell executive said, “Kano helps us do what the customer says is important, rather than what we think we’re supposed to do.” As the Honeywell example shows, clients are often surprised by data, and by how straightforward the decisions can be, when objective, quantitative results are available.
In the end, what makes Kano so effective for Honeywell is its role in the company’s multi-step product development process. For example, questionnaire generation is strengthened by the qualitative research that precedes it – voice-of-the-customer research allows Honeywell to identify a range of key issues, some of which will be tested through the Kano survey. This makes the questionnaire more effective, and also helps attain a high response rate to the survey, because customers already know that they are being asked to participate in a process that will provide them with better products and services.
After some of the Kano surveys, key customers were contacted to test whether or not the more surprising findings were in fact correct and not due to respondents’ misunderstanding certain questions. These follow-up meetings validated the Kano results and demonstrated Honeywell’s commitment to meeting its customers’ exact needs. By combining qualitative and quantitative research, Honeywell was able to gain significant insights into their markets and to more effectively meet its customers’ needs.