The success of any product is measured in the value that it creates for its customers and its company. That means that understanding how your product will create value and how its beneficiaries will understand that value should be at the center of your product and marketing strategy.
But the equation that measures your product’s value can be complicated, leading to misinformed strategy that fails to identify the biggest problems or capitalize on the biggest opportunities. It is especially tricky when you consider that every stakeholder in your product has a different way of measuring the value it offers them, and most of the time these measures combine objective metrics like ROI, and subjective ones like how it makes them feel.
That’s why the most effective product strategy takes a value-based approach that aims to understand the expectations of every stakeholder and track how that value is being delivered and communicated across your product’s lifecycle.
To create an effective value-based strategy, all you need to do is ask the right set of questions. Candid assessment of your product through this lens will allow you to solve bigger issues and discover big opportunities to improve your product and marketing. Moreover, you will be able to constantly return to the same framework to identify your next area of focus.
The framework that I use is broken down into three parts: the building block questions, questions that examine how and where value is being created, and questions that how effectively your are reinforcing that value through your communication (after all, the best product in the world can go unsold if no one knows the value it can bring them).
Your first iteration does not have to be deep. Just sketch out your answers and take your best guess (but don’t sugar coat them). Anything that you didn’t rate highly or answer with confidence is the first place to start a deeper dive. And if nothing stands out, that’s when you should begin fact-checking each of your answers by asking the follow up “how do I know this for sure?”
The Building Blocks
If you don’t understand the answers to these questions, then your strategy is doomed!
- Who is this product intended for?
- What are their pain points or needs?
- How does the customer measure value?
Are You Creating Value for Your Customer?
A good product delivers value that aligns with your customers needs. When you are determining how to improve your product, these questions should provide a basic litmus test. Likewise, if you current product doesn't deliver on these main questions, get ready for poor adoption and retention.
- How does your product address the needs of your customer?
- What unique value does it offer, if any?
- Can you objectively measure the value that you are delivering to your customers?
- If so, for the average customer how much value does your product deliver? Is it commiserate to what they are paying?
- How often does your product deliver extreme value (ie. value that is self-evident/needs no explaining)?
- Is there anything you can do to replicate the cases of extreme value?
What Are You Doing to Communicate and Reinforce Value?
In an ideal world, your product would create so much value that it needs no explaining. But in the real world, having a great product is only half the battle. Your product must be combined with effective communication (sales or marketing) to make it easy for your customers to see the value.
- How easy is it for people to discover your product?
- Where do they discover products like yours?
- When they do discover your product, does your message speak to their pain points? Does it accurately portray the value they can expect to get?
- Is it easy for a prospect to understand the unique value of your product?
- After someone becomes a customer, how frequently are you reinforcing the value of your product?
- Are you communicating value in a format they expect and that is easy for them to understand?
Depending on the maturity of your company, these questions could be easy or difficult to answer. Obviously the more data you have, the better picture you can draw, but even in the absence of data, answering these questions from your gut is likely enough to highlight some weaknesses and opportunities. Make a habit of returning to them regularly.
Symptoms to Look For
For any analysis, context is important. That’s why, whenever I find myself running through these questions, I tend to look for validation of my answers through evidence.
Here are some common symptoms that could indicate that your product that doesn’t deliver good value:
- It is difficult to keep a customer
- Customers aren’t willing to advocate for your product
- Your product rarely produces extreme value that is self-evident to the customer
- You and your customer have no objective way to measure the value of your product
And here are some symptoms that probably mean you need to do a better job communicating value:
- No one is discovering your product
- You lose out on deals frequently to competitors
- Your product is objectively producing value, yet customers are still leaving
Remember that your business is a machine designed to do one thing well: create value. As you are building your product or planning your marketing campaigns, keep your eyes set on creating and reinforcing value. Whenever you get stuck, return to value-based questions to gain insight, look for supporting evidence for your analysis, and prioritize action.