A DOMANI Press Release
From: JustMeans
DOMANI demonstrates how TQM ‘Kano Analysis’ can strengthen brand value
Last year could easily have been called the “Year of Emerging Green.” The top stories in 2006 included General Electric’s ambitious “Ecomagination” campaign and the surprising emergence of Wal-Mart Inc. into the sustainability arena–with bold sustainability goals. Even Vanity Fair dedicated one of its 2006 issues to environmental issues and climate change.
Environmental Awareness Accelerates in 2006. As Corporate Social Responsibility (CSR) and sustainability programs gathered momentum, 2006 saw a shift toward increased public awareness of environmental issues, particularly regarding climate change. This trend was brought to the forefront of popular awareness by three significant events:
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Weather deviations throughout the world, including the warmest year recorded in North America, and news reports that 10 of the warmest years since the 1850s took place in the last 12 years;
Former Vice President Al Gore’s documentary about global warming, An Inconvenient Truth, which is one of the most successful documentaries of all time;
California Assembly Bill 32, the first binding greenhouse gas (GHG) emission reduction target initiative (25% by 2020).
In response to these notable events, CSR reporting, environmental branding, and sustainability strategies ‘came of age’ in 2006. The year even saw marketers messaging their products and services specifically to target increased customer awareness of corporate environmental performance and responsibility.
Forecasts for 2007 and beyond. What can we expect in 2007 and beyond as a result of the watershed events of 2006?
DOMANI foresees a continued shift in customer expectations and demands across a wide range of industries. We anticipate the imminent coming of a “tipping point” where end users and other stakeholders routinely request companies to move forward with improved environmental performance, including reduced GHG emissions.
DOMANI envisages that many customers will no longer be passive supporters of corporate environmental performance. We anticipate the emergence of active stakeholders who aggressively demand sustainability, CSR branding, and accurate environmental reporting. These stakeholders will only support responsible companies with purchases and investments.
Profiting from Total Quality Management. Companies are asking us how they can capitalize on the profound environmental and sustainability developments of recent years. They want to know how they can benefit from the aforementioned shifts in customer expectations.
The answer lies in the evolving business tool called Total Quality Management (TQM). One important TQM tool, Kano Analysis, helps companies prioritize customer requirements (expectations) based upon customer satisfaction. Kano Analyses reveal which traits are important to customers as they make decisions about whether or not to buy a particular product or service.
Most Kano Analyses have 3 common key characteristics, which are described and illustrated below:
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Basic Factors
These are the “must have” traits that a customer requires of a product/service;
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Excitement Factors
These are “delighter” factors that increase customer satisfaction but do not cause dissatisfaction if not delivered; and
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Performance Factors
These factors result in satisfaction when delivered and dissatisfaction when not delivered.
Domani - Newsletter
A Kano Analysis of 2006 indicates that customers have begun to expect companies to demonstrate environmental performance and communicate their progress to the public. The analysis also suggests that sustainability strategies and CSR are becoming performance factors companies are expected to achieve. In other words, sustainability strategies and CSR are no longer merely excitement factors that, while delightful, are not expected to happen.
With this fresh perspective, the widespread emergence of sustainable business strategies and consumer awareness of environmental issues suggests a coming paradigm in customer expectations. Sustainable business and CSR initiatives, such as the Ecomagination campaign, recyclability and energy efficiency, were historically classified within the realm of excitement factors. As environmental awareness increased during 2006, consumers began switching their perspectives of corporate environmental/sustainability initiatives and deliverables from excitement factors to performance factors.
This switch means that the business value of sustainability initiatives and CSR is now measurable–and real.
A Critical Time for Making Progress. Companies that agree to abide by sustainability and CSR initiatives are reaping significant market benefits, many of which were documented by the media during the year. But what has been less documented is the following: companies that do not engage in environmental performance initiatives will increasingly encounter public scrutiny. Ultimately, they will be penalized in the marketplace–and this will be documented in the media.
DOMANI sees 2007 as a critical point in time for American business– where stakeholders will witness large-scale shifts in business strategies to meet customer expectations for sustainability and CSR. What we expect is that these actions will result in enhanced brand recognition and increased business value.
