The Kano Model defines three kinds of Quality or Customer Satisfaction: Basic (fully expected), Performance (incremental improvements), and Excitement (unexpected or radical improvements).
When using the Kano Model don’t think of “Quality” solely as in engineering quality, such as zero defects. Here “Quality” means how well your product or services meet or exceed what the marketplace anticipated or desired.
For example, if your market desired a particularly stylish jacket, and when it arrived via overnight delivery it did not look or “feel” or exude the stylish “cool” factor the buyer expected—it was nothing like how your website made it appear, you would quickly fail at the “basic” quality level by not meeting expectations. Perhaps your photos made it look like soft, very refined leather, and when it arrived it was a bit “patchy” and stiff. You failed at the “basic” quality level—not because the jacket had defects, but because it did not meet the buyer’s expectations.
However, if the buyer received the jacket and the material and fit was even better than they expected you would score higher up on the “performance or incremental” quality.
Finally, if your jacket made the buyer look and feel like a supermodel, and all of their Facebook and Pinterest friends screamed positive reviews of how hot she was and they were jealous, you have now exceeded your buyer’s expectations and supplied something they did not really expect–excitement quality!
Basic Quality cannot differentiate your offering in the marketplace, but if its missing can greatly harm your offering’s perception in the marketplace.
Performance Quality can give you an incremental edge but only temporarily as your competitors will quickly match your offering.
Excitement Quality or radical innovation can greatly differentiate your offering’s perception by the marketplace and is difficult for your competition to match.
However, over time improved offerings by your competition and new entrants cause the marketplace’s expectations to pull all three qualities downward, making what was once excitement quality but performance quality, performance quality but basic quality, and basic quality no longer acceptable.