Within Product development we often talk about delivering value, but what specifically are we referring to?
Value does have multiple interpretations depending on context. However this is usually Business or Customer value. Focusing on the subject of Customer value, 2 points can be highlighted.
- Point 1 is that Customer value can be delivered and measured at different points of a Customer Journey.
- Point 2 is that the Customer desires/needs will change overtime and during the use of a product, changing what you have defined and measuring as Valuable.
Understanding the different points you can deliver and measure value. We can deliver Customer value by meeting customer needs at two levels, pre-purchase and post-purchase, which have multiple sub-touchpoints. Before a customer buys a product, they often have needs they expect the product to meet and therefore already have an idea of “desired value”. When optimising your acquisition, engagement and conversion strategy you will want to pay attention to this. Once the customer has converted, the benefit that a customer believes they receive from a product is the “Perceived value”. In addition, Cost of ownership can impact “Perceived value” so you have to look beyond the price paid considering the non-cash elements as time spent, effort and convenience. By zooming into these aspects, Value delivery can therefore be orchestrated and measured at all stages of the purchase journey, Awareness, Consideration, Purchase, Retention and Advocacy.
My second point is that customer desires/needs will change overtime and during the use of a product. Your customer will constantly benchmark your product against other alternatives available in your marketplace. What a customer perceives as value could also change over time. The work of Noriaki Kano helps us chart the relationship between investment and customer satisfaction for products. In this article by Jared Spool, he explains how excitement generator of a product eventually migrate to basic expectations over time.
If you are developing products that have since move from excitement features to basic features, then you may not have real differentiators. Take an Omni-channel as an example, the consumer just expected a mobile shop to complement the web shop in the past. Now they expect a consistent experience when moving between channels. The Omni-channel capability has at some point moved from an excitement feature to a basic expectation. Understanding this concept is important, as what you measure as delivering customer value will eventually change over time.
My point is, Product teams should continuously strive to understand where to deliver value but also anticipate changing trends of what customers regard as valuable.