When it comes down to it, your users are the only ones who know what brings value to their lives. When you deliver on that value, sales and customer satisfaction rates soar. Companies often get caught in the trap of outrunning competitors, making products bigger and better without stopping to think about what “better” actually means to their unique audience. In this post, we’re covering how to define and measure user value to help you meet your customers’ wants and needs with a product that actually brings value to their lives.
Define value for your audience
The first step here is to determine what value is for your audience, which requires actually talking to your users about what their goal is when using your product, how they are currently accomplishing that goal, and what problems they face throughout the whole process.
You can’t just survey customers on what is valuable to them. It’s difficult to put that into words. Instead, you have to use specific questions that draw out that customer’s definition of value in relation to the problem your product solves.
To define user value, you have to follow the steps below:
Identify the value proposition
The value proposition is what your product offers to its users. For example, Uber’s value proposition is “The smartest way to get around”. They offer a convenient mode of transportation. Budgeting tool Digit’s value proposition is “Save money, without thinking about it.” The tool optimizes your spending habits and automizes saving for different goals. Each of these value propositions clearly illustrates how the tool benefits its users.
Defining your value proposition starts with identifying the problem statement. Use these five prompts to brainstorm:
- I am…
- I’m trying to…
- Which makes me feel…
An example using Uber might be: I am a traveler trying to visit a location but can’t because it is out of walking distance which makes me feel like I need to spend money on renting a car or finding alternate transportation.
The value proposition above is the perfect solution to this problem statement. Do this correctly, and yours will be too.
Identify the core action
For every value proposition, there is a core action that must be taken for the customer to experience the value. If the user does not connect their bank accounts to Digit and start spending, the product will be useless to that user. The core action needs to be easy to do within the app if users are going to follow through.
Measuring user value by interviewing customers
The information in steps one and two will then be used to interview users about the product and its value in this step.
First, prompt users to complete the core action. Once they’ve done this, ask them to rate the experience in reference to your value proposition. Keep questioning to identify why that score was given as well as what specifics about the product contributed to their decision. Ask about competing products that also help the user with your value proposition, gathering information on how your experience holds up in comparison.
Listen to your audience
By defining and measuring user value, you gain visibility into what your product should be accomplishing and whether or not it is meeting that goal. Use this data to make adjustments so that your product continuously meets customer expectations.
While the financial cost of the product does play a role here, there are also intangible costs that impact user value. Here are some examples:
- Customer experience
- Time to purchase
- Core action
User research might reveal that your core action is not intuitive enough, meaning customers cannot figure out how to use your product after opening it. Or maybe the core action requires more effort than its perceived value. In this case, updates are necessary to clearly define the core action and make it effortless so that customers will know exactly what is required for them to get value out of the product and will take the action necessary to do so.
Prioritize the customer experience so that users can get value from your product without friction. The higher the customer costs, the lower the user value. The overall user value is comprised of the benefits minus the costs. So if your value proposition is ranked 10 and your customer costs are 5, your overall user value can only be 5. To increase your user value, you need to think about knocking out some of those customer costs– which brings us right back around to understanding and improving the product’s user value.
At the end of the day, products and services that don’t offer value to the customer are a waste of time for everyone involved. The most successful products are the ones that fill a need and do it well. Speak to a Marin consultant on how our tools can help you identify the right customer for your products or services and the best moment to engage them. Learn more now.