“Doing product configuration right means you design a product with the right features for a segment—that is, just the features customers are willing to pay for.” – Madhavan Ramanujam and Georg Tacke, Authors of Monetizing Innovation
Product improvements don’t all hold the same value in the eyes of customers.
Some features create higher levels of customer loyalty and have a greater potential for impacting customer satisfaction than others.
The best way to explain this is through the work of Dr. Noriaki Kano, the Japanese professor who created the Kano model. In his research, Dr. Kano concluded that product improvements fall into one of five categories:
The 5 Types of Product Improvements
- Mandatory (Must-be): These features are the must-haves of a new product like a login or a user profile. They aren’t perceived as adding any value to the product, but they are expected to be there. These are features that your product needs, but that users take for granted.
- Performance (One-dimensional): These features represent the core of your product—they’re the two or three features that your customers pay for. These features are the main value you provide, what you write your marketing collateral around, and what businesses typically compete on.
- Exciter (Attractive): These features are not expected by customers, but are perceived as adding value. For example, an accounting solution might have automatic tax calculation or local tax rules and exemptions. These features help delight customers, but they don’t cause dissatisfaction when they’re absent.
- Indifferent: These features don’t make a difference in whether people want to use your product. They tend to be perceived as bloat, or non-monetizable and non-value-adding features.
- Reverse: The presence of these features has a negative effect on customer satisfaction.
According to the Kano model, a winning product meets all mandatory requirements, outperforms competitors along the performance dimension, contains a few exciters, and avoids bloat, reverse, or indifferent features.
Why it’s Difficult to Pick the Right Features
The problem is twofold:
- Performance features don’t excite and don’t tend to get requested, while customer requests and exciters don’t tend to impact performance. You have to find a way to balance these different types of needs.
- The features that fall into each of these categories will change as customer and market expectations change. This process is sometimes called the natural decay of delight.
Over time, exciters no longer excite (e.g. Wi-Fi in hotels or coffee shops), performance expectations increase, and the list of mandatory requirements grows and grows.
This is one of the reasons why a product that doesn’t get better over time doesn’t just stagnate, it regresses.
Conversely, it’s important to know when to stop improving certain criteria when it’s well satisfied.
Ultimately, the pace of evolution in a market determines how quickly features get re-categorized.
Your product won’t beat the competition by handling mandatory features better, but it can lose customers if these bases aren’t covered. You need to make sure you always know what the “must-have” expectations are.
You should have a good idea why customers are buying your product, and how they evaluate the success it allows them to make. This should help make clear what your product’s performance features are.
By digging deeper and keeping in mind the five types of product improvements of the Kano model, you’ll be able to add value to your product time and time again, while ensuring that your bases are covered.
This post in an excerpt from Solving Product. If you enjoyed the content, you'll love the new book. You can download the first 3 chapters here →.