8 min read

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.

Brian Tracy

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.

Peter Drucker

It doesn’t matter how much ‘real’ (objective) value you have baked into your product if your customers don’t perceive that value.

Dharmesh Shah

How do you determine product value? (Our 5-step process)

DevSquad Infographic The Complete Guide to Understanding Product Value v1 1 scaled

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.

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:

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:

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:

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?

Examples of product value in software

As a software development company, we’d like to kick off the examples with some B2B SaaS platforms:

Loom

loom

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.

Product values:

Terzo

terzo

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.

Product values:

Airtable

airtable

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.

Product values:

Examples of product value in consumer products

And here are some product value examples from physical products created for consumers:

Tesla

tesla

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.

Product values:

Dyson Airwrap

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).

Product values:

McCafe by McDonald’s

mcdonalds

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.

Product values:

Ulitmately, 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.

Ready to build a beautiful SaaS product your customers will love? Learn more about our SaaS development services.

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