Friday, August 25, 2023

Kano: Utility at work

"Customer value", aka "the value proposition", is complicated. 
Books fill the shelves on those topics. 
  • What do 'early adopters' value?
  • How does age come into play?
  • Is economic willingness different from economic capability in the value equation?
  • How do culture and relationships figure in the proposition?

All good questions, to be sure. 

But the missing quality is "UTILILTY", specifically "marginal utility." Marginal utility is the added satisfaction a user (customer, or consumer) gets from having one more unit of a product or service. 

Marginal utility separates the "willing" from the "capable", given the capacity to spend. The whole idea of working on the margin begs images of value plots that could be anywhere from linear (the last unit is just as valuable and desired as the next unit) to various shapes of non-linear (the last and next units' values are different)

One might ask: is there a way to map all this stuff so that a picture emerges? Yes. Kano Analysis may help see the bigger picture.

What is Kano analysis?
Kano analysis is a product feature/function evaluation tool that gives visualization to relative merit over time as trends change. The usual presentation is a four-sector grid with trend lines that connect the sectors. 

The grids are defined by the horizontal and vertical scales. Don't take the word 'scale' too seriously; for the most part the scales are non-calibrated, but informed, opinion:
  • Vertical: customer attitude, feeling of satisfaction, or other elements of value appeal.'
  • Horizontal: some quality (or metric) of the feature/function that's important to the customer.

Trends and Utility
The trends plot the utility of changing customer satisfaction (vertical) as a function of product functionality (horizontal). These plots vary from linear to nearly exponentially non-linear.  And, the utility of satisfaction need not maintain only one direction; direction can change, trending up or down, as customer/user attitudes change.

Developers use the Kano board with sticky notes to show how feature/function in the form of stories or narratives might play out over time.

 And, we take the trouble to do this because:
  • There's only so much investment dollars available; the dollars need to be applied to the best value of the project.
    Presumably that's the "ah-hah!" feature, but the "more is better" is there to keep up with competition; and, some stuff just has to be there because it's commonly expected or need by regulation.
  • Trends may influence sequencing of iterations and deliveries. Too late, and decay has set in and the market's been missed.
  • The horizontal axis may be transparent to the customer/user, but may not be transparent to regulators, support systems, and others concerned with the "ilities". Thus, not only don't forget about it, but actually set aside resources for these 'indifferent' features and functions.
How far ahead of the trend can you be and not be too far ahead? Just a rhetorical question to close this out.

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