Have you noticed that some products take off like wildfire and others fail no matter the marketing budget? It all comes down to product value. Whatever the industry, product value always wins. Slack provided a faster, more organized way to communicate with colleagues virtually, Spanx offered the tummy control without having to wear out-of-fashion nylons, and Verizon has continuously brought wireless cell coverage to rural America.
Entrepreneurs talk frequently about product-market fit and product validation. Product value is central to both of these essential strategies. Without great product value, you can't achieve product-market fit or validate your product.
In this ultimate guide to product value, we define this slippery concept, show you how to uncover it yourself, and offer plenty of examples to inspire you.
The real definition of product value
Product value refers to the reason a customer wants to purchase and use a product. The value it holds for the customer might be convenience, ease of use, effectiveness, speed, performance, reliability, or style. Consumers and businesses weigh product value relative to cost in order to make balanced purchasing decisions.
Product value quotes
These smart quotes about product value remind us that successful products not only satisfy some need for the customer, but also hold value that the customer recognizes and desires.
The product has to work. It has to be a good product. An enormous number of them are all hype with no value at all. People get into them because they want to make a lot of quick, easy money.
What a customer buys and considers value is never a product. It is always utility, that is, what a product or service does for the customer.
It doesn't matter how much 'real' (objective) value you have baked into your product if your customers don't perceive that value.
Why is product value important?
We hear the word “value” so much in the business world, that it’s easy to get fed up and ignore the concept altogether. But value is paramount to the success of your product.
To put it bluntly, product value represents the reason why customers are willing to pay for your product. Without product value, buyers will pass your product by and put their credit cards back in their wallets.
But with clear and compelling product value, you can drive subscription renewals, repeat purchases, and word-of-mouth referrals.
There has to be some form of value given to the customer, whether that’s pure entertainment or something more practical like cost savings.
How do you determine product value? (Our 5-step process)
Determining product value should be a collaborative, reiterative process. It involves your target customers, current customers, colleagues, executives, and other stakeholders.
Follow these steps:
Step 1. Do your research
First, you'll need to research your market and competitive landscape.
Customer research - Talk with your current customers and/or your target customers. Use a combination of surveys, focus groups, and 1:1 interviews. If your business is brand new and you're in the process of developing your first products, you'll want to ask questions that get at the target audience's current pain points. For example, you might ask "How do you currently achieve X?" and "What are the pros and cons of that method?" But if you already have a product and want to better understand its value so that you can scale your customer base, you might ask questions like, "Why did you decide to purchase X?" and "How does it impact your life?"
Competitor research - You should also research your direct and indirect competitors so you can find out how your product compare. Document your competitors' products, product prices, product descriptions, marketing messages (on product pages and advertisements), and customer reviews. Hunt for ways that your products are better than competitors, so that you can use these for marketing inspiration, and ways that your products are worse, so you can make improvements. To make the task easier, use competitor analysis tools like Sprout Social, SEMRush, SpyFu, AdSpyder, Owletter, and BuiltWish.
Gather insider industry knowledge and visualize the future - While research is important, you don't want to ignore your strategic vision. Maybe you know what customers want before they know that they want it. This is true for many of the best B2B SaaS companies. Oftentimes, their users can't imagine a better way of doing things until a founding team creates it. Of course, these strategic visions are grounded in research, but it's worth mentioning that you can't just follow what customers ask for. You need to chart the path.
Step 2. Narrow down your research to the biggest values
When talking to customers and researching competitors, you're going to gather a ton of data. Sometimes, it'll be easy to spot trends and competitive advantages. But you might encounter conflicting product values, or so many different values that you aren't sure which are the most important.
Spend some time whittling down to the core 1-4 values that your product offers.
Here are some tips to help you choose the top values:
Turn qualitative research into quantitative data by distilling responses into categories and counting similar responses so you can find the most frequently mentioned values.
Place a higher importance on product values mentioned by your ideal target customers or current customers who match your new ideal customer profile (ICP).
Consider which product values put you in the best position against your competitors and provide clear differentiation.
Brainstorm which product values will have the most relevance and importance in the next 5 years. Which will be the most relevant?
Which values raise your overall perceived value and the amount that you can charge for your products?
Step 3. Use a template for communicating product value
After you've narrowed down your top product values, it's time to communicate them.
The Jobs to Be Done framework serves as a smart template for communicating product value, and that's because for most companies, the product value comes down to the product's utility.
Use this template, which we've filled out using travel management company TravelPerk as an example:
Customer avatar description (job executor): Office manager at a company with less than 100 employees.
Core functional job: Book travel for executives and other business travelers.
Emotional job (how the executor wants to feel when doing the core job): On top of it, relaxed and capable when responding to changes and issues quickly, pleasing others on the team.
Related jobs: Provide support when trips are canceled, submit invoices to finance team, answer questions about travel budget usage
Product values (your value proposition): Reliability (24/7 trip support so office manager doesn't have to always be available); Efficiency (monthly invoices instead of one invoice for every travel transaction), Accuracy (travel data for tracking budgets in real-time).
As you can see from the above example, it's much easier to determine your product values when you start with what customers want to achieve and what matters to them. This way, you're not choosing values arbitrarily but are grounding them in customer needs
Step 4. Validate your understanding of your product value
The next step is to validate your product values.
Share your documentation on your product values with the following people:
Executive leaders - See if executive leaders agree on the current product values. Ask if their strategic vision for the future will add or remove any values soon and what those changes are predicted to be. This will help you stay on top of your marketing strategies.
Current customers - Share your product values with a selection of top customers. 80% or more should agree that the values you've listed are the top ones.
Active leads - You can also have sales reps share the product values with some active leads and ask if these values matter to them or if there are other values that matter more. This can help you tweak your product strategy to what target leads really want.
Pay attention to the feedback you receive and consider updating your product values document or even building additional features.
Step 5. Weigh product updates and additions against your top values
Now that you know what your customers truly care about, you should use this as a guiding light for all product development.
Whenever you're considering adding new features or products to your product roadmap, you need to consider how these will uphold your product values.
Anything you build should be in line with what your customers care about. For example, if they've told you that they care about accuracy above all else, then you shouldn't build something that prioritizes affordability over accuracy.
What are the types of product value?
There are many different types of product value, from time savings to convenience.
Below, we list out the main forms of product value:
Helps to save money on other expenses
Excellent customer service
Ease of use
Effectiveness in achieving desired results
Efficiency and speed
Convenience and ease of access
Longevity, and/or durability
Sustainability, lower energy use, lower carbon footprint
Attractive, novel, or useful packaging
Connection with others
Product value VS product value proposition
While the terms “product value” and “product value proposition” are similar, they refer to very different concepts. Product value is what your customers get out of your product (why they use or consume it) and product value proposition is how you communicate that value to potential customers.
Product value examples
Below, we’ve got 9 great examples of product value across B2B and B2C brands. For each example, we include a list of the different values being offered. As you can see, most products offer more than one type of value.
StoryChief is a content marketing platform that allows marketers to publish and promote content across their channels—all in one place. You can organize content marketing campaigns, brief collaborators, review and approve content, and distribute it across your blog, social media, employee advocates, and more. The software can replace Google Docs and project management tools, while saving marketing teams a lot of time.
Effectiveness in achieving desired results
WhatsApp is a popular messaging application that utilizes the internet to send messages—instead of SMS technology. The app also allows you to place voice and video calls. This circumvents the need for expensive mobile plans. Users can connect with friends, family, and colleagues all around the world without having to pay international rates.
Connection with others
Helps to save money on other expenses (free messaging and calling)
Ease of use
Convenience and ease of access
3. Warby Parker
Warby Parker has disrupted the eye glasses industry. The company makes it easy for customers to purchase prescription glasses at a fraction of the cost. Customers can try on glasses at home, select the one they want, get their prescription glasses delivered, and then return them if there are any issues. The company also has retail locations so that customers can purchase affordable glasses in person.
Convenience and ease of access
Loom is a freemium tool for recording and sending screenshare videos. Before Loom came out and grew like wildfire, digital workers had to record a video with their webcam and upload it to an email. The recipient would then have to download the video to view it. Loom drastically improved convenience and efficiency by offering a no-download way to send videos. People can share the links to the videos and only download if needed.
Ease of use
Terzo brands itself as a CRM for the buyer. This vendor management software helps large corporations track the third-party solutions they use and include purchaser and renew information all in one place. This way, IT staff can ensure that solutions are actually being used and catch unnecessary contracts before they renew. They can see who in the company approved the purchase and reach out to them to see if it's still needed.
Helps to save money
Airtable offers spreadsheets on steroids. Many people love working in spreadsheets. Airtable provides this format but with advanced features like resource planning, task designation and tracking, work visualization, integrations, workflow automations and more. You can view the same data in different formats and easily report on project progress and results.
Released over 10 years after the first Toyota Prius, Tesla offered sustainability with style. While the brand isn't exclusive per se (anyone can buy it), it does have an air of exclusivity due to the price. Plus, the round shape and style of a Tesla is easily recognizable and very different from every other car on the market. All in all, Teslas offer sustainability, performance, and style, while the Prius doesn't pack the same punch.
8. Dyson Airwrap
A $600 hair styling tool? In the world of hairstyling, Dyson is an unlikely luxury winner, but is highly popular. The Dyson Airwrap is a pricey piece of bathroom equipment that works as a blow dryer, curling iron, and straightener all in one. Touted by influencers, it has a gotta-have-it sort of appeal. The product is unique from other items on the market and is backed by Dyson's unique technology (the company has been making powerful and expensive vacuums for decades).
9. McCafe by McDonald's
McDonald's made a smart move when coming out with their McCafe line. Coffee houses like Starbucks typically charge $4 to $6 for one of their fancy coffees. McCafe offers very similar items at half the price, plus their drive-through lines tend to move a lot faster and their stores are easier to find. With this product, convenience and affordability are top of mind with customers.
Ultimately, your product value isn't what you think it is. It's what your customers care about: the money they want to save, the things they want to experience, and the emotions they want to feel.
5 ways to increase product value
If you’re curious how to increase product value, then keep reading. We’ve got tips on how to find room for improvement plus ideas
1. Conduct a product value analysis
What you think is valuable might not be what your customers care about. That’s why, when attempting to increase product value, you should start with a thorough analysis.
Follow these steps:
Define the goals and scope for your analysis - Start off by clarifying your goals for the analysis (such as uncovering competitive advantage and opportunities). When you have clear goals, you can more accurately set a scope for data collection and ensure that you’re using the right research methods.
Identify stakeholders - Next, make sure you involve the right stakeholders early on in your analysis. You might want to chat with the head of product, head of customer service, the CEO, and the CFO to make sure that you’ll be able to gather all of the data and feedback you need.
Gather product data - Now it’s time to gather data on the current state of your product’s value. This might include customer surveys, customer interviews, heatmaps, session recordings, user testing, UX audits using heuristic analysis, customer reviews, and financial data from direct sales and retailers.
Study the competition - You should also review as much data as possible on competitors’ products, including their UX, product features, and customer reviews.
Organize your findings and recommendations - And lastly, you should format your findings into a clear report. Include the goals, scope, and research methods used. Then include a summary and description of your current product value, your main competitors’ product value, and your recommendations for increasing product value.
2. Up the entertainment value & enjoyment factor
You can make your product more valuable simply by making it more enjoyable to use.
For example, sales email AI tool Lavender has fun branding and UX. The playful style is worked into every aspect of the buyer and user experience, making it stand out in a crowd of boring B2B software tools.
When your product is more enjoyable to use, it’s more sticky. Users will return to it again and again and refer it to others.
3. Improve convenience or ease of use
You might also want to try upping the convenience factor. Amazon is an ecommerce powerhouse because they make it ridiculously easy to find, vet, purchase, receive, and return products across all product categories.
How you can make your product…
Easier to purchase?
Easier to use?
Easier to return?
Easier to reap results from?
The answers can put you in a stratosphere far above your competition.
4. Lower the cost of your product or add pricing options
The less you charge, the more value that customers receive for their money. You can drastically improve the value of your product simply by changing its pricing. You could lower the price permanently or offer a temporary discount.
If a lower price isn’t the right strategic move, you could also try creating a new version of your product that costs less. For example, a SaaS company could remove some advanced features to create a subscription plan that meets the needs of small businesses and charge a fraction of the typical enterprise price. Or, a consumer brand could create a mini version of their product, maybe with less items in the package or with more affordable materials.
5. Bundle products for maximum value
Try bundling products to bump up the perceived value. Then, offer a slight discount on the bundle versus what someone would pay if they were to purchase all of the items separately.
For example, a curling iron could be bundled with a heat protectant spray and frizz-reducing serum. A software product for marketing agency owners could be bundled together with a contract template, proposal template, and other digital resources needed to run a successful agency.
You can bundle products that you already sell, or create new small add-ons to include in the sale of your main product.
How DevSquad can help you discover and build product value
Without compelling value, your software or app is dead in the water.
At DevSquad, we structure our product development services to ensure product value at every step. We include several checks so that you never over-invest in an idea that’s destined to fail.
User-centered design for great UX and ease of use
Month-to-month billing and absolutely no long-term contracts so you’re never locked in
Partner with us to clarify your software or app idea, prototype it, test it with users, and—only if the concept is validated—build it.