Volume 8, #4 May 2010
Design Feature Rationalization
How to distinguish between what the customer wants and what the customer wants to pay for
by
Wayne Mackey
If your company has been following best practices in design and development, chances are you have some way of gathering and applying information on customer needs to product or service features. You may even have added on-site interviews, ethnographic research, and other more advanced methods to your old standbys of market research and focus groups.
But even with a sophisticated approach to developing requirements based on customer input, I'll bet you are throwing away money—maybe a whole lot of money—by overdesigning your product or service. That's because, while it's straightforward to determine what customers want vs. what they don't want, it’s much more challenging to figure out what customers want and will pay for. And when you don't know what customers will or won’t pay for, you overdesign—loading up on nice-to-have features, often implemented using that nifty new technology your engineers have been itching to play with.
Overdesign not only burns profit margins, but also results in an overly complex product that ultimately may frustrate customers. (Think of all the unused features on your cell phone that sometimes get in the way of making a basic call or snapping a quick picture.)
Stop the Insanity! Innovate for Value, not Function
To stay out of the overdesigning/overcomplexity trap, you need to quantitatively differentiate between offerings that delight the customer and those that just satisfy the customer. Companies often pursue customer satisfaction as if it were the Holy Grail. I would argue that customers expect to be satisfied, but are willing to pay much more to be delighted. Have you noticed that those little press-to-test built-in AA & AAA battery strength meters have all but disappeared? Extensive marketing research showed that customers wanted them, but extensive sales data and market share losses proved that customers refused to pay even the slightest bit more for them. Battery makers had successfully innovated a function that lacked real value.
The most objective distinction between a delighter and a satisfier in your product or service is whether or not the customer could have anticipated the solution themselves. For example, prior to the 2006 holiday release cycle, video game systems from Nintendo, Microsoft, and Sony had been following a predictable technology path: faster graphics, more memory, and games aimed primarily at teenage boys. Then Nintendo released Wii—an underpowered, more expensive system versus its competitors—with a little something extra: the Wii controller. It was an instant (and continuing) smash hit, because the Wii controller added three dimensional arm and body motion sensing input as a completely new and unexpected feature that delighted a broader demographic interested in playing an even broader spectrum of active games.
SATISFACTION + UNEXPECTEDNESS leads to DELIGHT.
The attributes that delight the customer are those for which the customer is most likely to pay a high price. Developing a product or service that delights means listening beyond the customer's words to tease out unarticulated needs by understanding the customer's environment, frustrations, and joys.
Listen carefully
First, use a limited number of one-on-one interviews to understand the customer's environment and what problems or challenges they face. Combine those environmental insights with their stated wants to determine what they may actually need.
STATED WANTS + ENVIRONMENTAL INSIGHTS leads to NEEDS.
But even if you do this expertly, you are only halfway there. The next step is to quantify the customer's response so that you can distinguish—even if the customer can't—which product attributes will delight and which will merely satisfy. The potential needs tell you what questions to ask of a broader customer group.
The final step to evaluate each possible need is to survey a broad group of potential customers. Very specific kinds of survey questions are the key to quantifying customers' responses. These are often phrased as pairs of questions that ask customers to reflect on how they would be affected if a certain need was or was not met. Five potential answers cover the range from “It must not be that way” through “I’d be neutral” to “I’d be delighted to have it that way.” (The idea of these question pairs is loosely based on the Kano Model, a method of evaluating customer satisfaction developed in the 1980s by Professor Noriaki Kano.)
There are three basic categories of attributes, which go by different names in the Kano model. What’s important for distinguishing delighters are these:
1) Who cares? - The customer is either completely indifferent about the need or is neutral if it's there, but unhappy if it’s not (e.g., choices for console appearance or size of the video game console).
2) Satisfiers - Marginal satisfaction of the need makes the customer happy and its relative absence makes them unhappy. These are the traditional battleground of the “also rans” (e.g., graphics speed or processing power of the video game console).
3) Delighters - The presence of the attribute makes the customer very happy and in its absence they are neutral, since they were not expecting it (e.g. inputs for sensing three-dimensional arm and body movement).
Here are some specific examples of survey question pairs and corresponding customer answers that tell us exactly which category each need falls into:
Who cares?
Q1) HOW WOULD IT IMPACT YOU IF YOU COULD CHOSE BETWEEN MORE OPTIONS FOR CONSOLE APPEARANCE THAN YOU CAN TODAY?
A1) I’D BE NEUTRAL
Q2) HOW WOULD IT IMPACT YOU IF YOU COULD CHOSE BETWEEN THE SAME OR FEWER OPTIONS FOR CONSOLE APPEARANCE THAN YOU CAN TODAY?
A2) I’D BE NEUTRAL
Satisfiers
Q1) HOW WOULD IT IMPACT YOU IF YOU HAD FASTER VIDEO RESPONSE ON YOUR GAMES THAN YOU HAVE TODAY?
A1) I EXPECT IT TO BE THAT WAY
Q2) HOW WOULD IT IMPACT YOU IF YOU HAD SLOWER VIDEO RESPONSE ON YOUR GAMES THAN YOU HAVE TODAY?
A2) IT MUST NOT BE THAT WAY
Delighters
Q1) HOW WOULD IT IMPACT YOU IF YOU COULD INTERACT WITH THE GAME USING MORE BODY MOVEMENTS THAN YOU CAN TODAY?
A1) I’D BE DELIGHTED TO HAVE IT THAT WAY
Q2) HOW WOULD IT IMPACT YOU IF YOU COULD INTERACT WITH THE GAME USING THE SAME OR FEWER BODY MOVEMENTS THAN YOU CAN TODAY?
A2) I’D BE NEUTRAL
Once the broad Kano-style survey has distinguished the category of each need, we have to determine the final menu of design features, including as many delighters as we can possibly afford. There is (so far as I know) no perfectly accurate formula for predicting a customer's buying patterns. But by distinguishing delighters and further anticipating how much your customer values different levels of satisfier and delighter performance, you can narrow the gap between what you offer and what the customer will pay for—minimizing design costs, optimizing resource allocation and maximizing price without making costly errors or overcompensating by overdesign.
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Wayne Mackey has been a Principal with Product Development Consulting, Inc. since 1997. Prior to joining PDC, he worked in industry for 20 years in high tech, aerospace and automotive fields. He is a natural change agent and leader, having counseled Fortune 500 companies, major universities (Stanford, MIT, Carnegie-Mellon) and government agencies in product development, supply chain management, and rapidly implementing enterprise-wide change. Mr. Mackey also has worked as a senior scientist, program manager, engineering manager and systems engineering manager.
