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Delivering Value in Your Products
Delivering Value in Your Products

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When considering or buying a product, consumers have several questions. What exactly is the value of the product? Is it a fair return in goods, services, money, or some other benefit in exchange for something?

Value represents the ends, and features are the means to those ends.

Value needs to be clear, explicit, testable, and transparent to make smart product decisions.

As you can already tell, value is a vital determinant of a successful product. What is value? Value is what we get in return based on what we give. For intangible goods and services such as software, value is often measured in the context of features.

Features are a bundle of functionality that align goals with objectives. Features come in various forms and levels of granularity. This can include user stories, minimum marketable features, epics, minimum viable products, and so on.

Value can be tangible or intangible. An increase in revenue or customer base is tangible. Goodwill, brand projection, and a positive reputation are intangible.

There are two key elements that are always considered by product owners and agile product managers:

  1. What is the value being offered by your product? Value lies in the eye of the beholder, who can be a consumer, business, or technology stakeholder.
  2. Can the product adapt to changing market dynamics? With time, the value proposition changes. Value changes can be impacted by several factors, including competition threats, market and economic conditions, and internal factors (such as changing leadership, budget cycles, and the impact of customer feedback.)

Here are some common decision points that must be considered when considering a new product to be developed:

  • Market — What is the market segment you want to play in, and who is your customer? Who is your competitor? What are they doing in the market? What are the market trends? What advantage will you and your product bring to the market? These questions can be beneficial when conducting market research or competitor analysis.
  • Value to different stakeholders — Variables are used to evaluate product options keeping in mind the different types of product partners. For example, saving time is a cost consideration for customers. Providing consistent customer service is a valuable consideration for business partners while leveraging modern technology to increase technical skills is a worthwhile consideration for technology partners.
  • Goal and Strategy — Goals need to be identified by multiple indicators. Ask questions such as, “Why does your company exist, and what do you need to do for your customers”? Does your product align with your business strategy? Does it answer the question, “How can you achieve your desired position and sustain a competitive advantage?”
  • Risks — There should be a focus on reducing risks that can potentially impact profitability. Such costs can stem from regulatory non-compliance, loss of reputation, or reducing waste. Factors or events that may delay, reduce, or slow down delivery also need to be identified. Such risks can come from different sources, including customers, businesses, or technology.
  • Time/Duration — How long will it take to deliver the product in the context of product acceptance, success, or increased value proposition.
  • Costs — Supplementing the previous point, this is money spent on discovering and developing the product’s features.
  • Revenue — This can be determined by conducting financial analysis to discern potential Return on Investment, Net Present Value, or break-even analysis. Profits can be determined by new revenue, an increase in fees, or an increase in sales volume.
  • Product Life cycle — What are the different stages of your product’s lifecycle? How will it be introduced? When will it transition to growth, maturity, and finally, its decline stage? When will product refreshes be introduced?
  • Service — Your customers are also your biggest advocates. Making improvements in service, i.e., to make customers/end users happy or help them retain happiness, goes a long way in establishing the long-term reputation of the company while acting as providing another avenue for marketing.
  • Dependencies — Identify Business or product partners on whom your product is dependent. Dependencies are those factors that you need in order to introduce or finish your product.
  • Legalities — Does the product comply with all the legal requirements? If not, what needs to be done to achieve full compliance?

The above-mentioned indicators must be analyzed and combined to ascertain the value of a potential product. Value is not simply money. The above indicators show that by taking considerable time and making effective decisions, one is more likely to make a smart product that will exceed customers’ expectations!

 

Author — Santosh Kumar, DLT Labs

About the Author: He is an advocate of Agile (SCRUM) practices who focuses on turning business user concepts and ideas into comprehensive business requirements.


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