Warren Buffett once said: “Price is
what you pay, value is what you
get.”
This thought concerns the financial market and
business valuation (price value, stock, etc.). However, the
phrase is universal enough that I would use it for Product
Ownership and features usefulness in products.
This statement profoundly resonates with me, and I believe
it should also strike a chord with Product Owners.
Warren Buffett’s thought could be translated to
Agile Product Management and reflected as the difference
between the price that a customer has to pay and the value
delivered to customers and users.
What happens if a customer pays for a
product or service yet doesn’t get any
value (or little value)?
The answer should be obvious. However, I would like to
emphasize it. For instance, customers will be frustrated
and dissatisfied and will not recommend your product.
Moreover, the organization invested a budget, time,
people’s skills & creativity to deliver waste. The production
cost is huge.
Interestingly, in some organizations, Product Owners and
stakeholders still seem to ignore this fact.
Some companies think that a good marketing campaign
resolves some product issues. Obviously, ads may
temporarily increase product usage and revenue, but
cannot guarantee that customers will value these products.
Remember, the majority of features in products are used
rarely or not at all. The main reason is that organizations
deliver unnecessary functionalities.
But wait. What is value?
We define value as outcomes – measurable changes in
customer/user behavior and their desired experience.
For example, if your customers are frustrated because the
system requires a lot of effort to operate in, the outcome
for them potentially would be for our customers to reduce
their time spent on an activity “X”.
How to prevent this situation from
happening?
• Know your users and customers
• Focus on customers/users’ outcomes. Product
Goals should reflect these outcomes, not only
revenue Read more here.
• Experiment with functionalities before you will
invest time & money to deliver them.
Experimentation could be run directly with
customers/users. More about experimentation in
products you can read here.
Remember: the value is when your users and customers
benefit from your product or service. The more value you
deliver to the customers, the more revenue it should bring.¹
In this blog, I have discussed only one perspective of value.
I have focused on outcomes and customer value.
The business value is omitted in this text on purpose.
Barely I have meant revenue. There will be a separate
paper regarding this topic. Stay tuned!
________________________________________
1. https://hbr.org/2016/09/the-elements-of-value
This article was written by a human, me, not AI.
The first publication appeared on this website:
https://magdalenafirlit.com/price-is-what-you-pay-value-is-what-you-get/