Product Value Explained
Understanding the Dimensions and Dynamics of How Products Create Customer Value
First, it's important to understand that product features and functionalities depend on both their value and complexity. Product value is the benefit that customers get from using your product. Complexity is the effort required to build functionality (Post is about Product Value). Product value has different dimensions, which we'll explore one by one.
Product value: Absolute & Relative
Your product's value depends on the importance of your customer's goal and the alternatives available in the market. Absolute value measures how well your product helps customers reach their goals. Relative value compares your product's worth against other solutions. Understanding both is crucial for making good product decisions.
Product value: Increasing, Diminishing & Declining (value vs #of features)
Products are typically a combination of features that together provide value to customers. However, it's a misconception that more features always mean more value. Your 2-3 key features provide the most value, while additional features only add marginal benefits. Adding more features can make your product complex and diminish its value. The key is only to add features that increase the product's overall value. If a new feature makes the product more complex or increases task completion time, it should be avoided.
Product value: Real vs Perceived (value vs time)
Real vs. perceived value relates to the marketing side of your product. Sometimes users have high expectations from your marketing, but the actual product experience falls short. This creates a gap between perceived and real value.
Conversely, when users expect less but get more value from the actual product, it's great—though this might initially attract fewer customers.
Product Value as a Habit (value vs time)
One important aspect is the power of habit. Users go through a habit-forming phase when they start using your product. Over time, they become accustomed to it. This is crucial when competing with existing products—your solution must be significantly better to convince users to switch.
Product value isn't simple. To succeed as a PM, you need to understand all aspects of value to build products that customers love.
Source: Hubert Palan