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User Value

Definition

  • What is user value: User value is the user’s subjective perception of whether a product or service can solve their problem. We need to create products and services that can logically solve real problems, but we also need to make sure users understand and recognize that value.
  • A classic misconception
    • Product features are not the same as user value

Classification of User Value

  • Practical value: improving efficiency, saving time, reducing costs
  • Emotional value: providing companionship, making something more enjoyable, or creating a pleasant mood
  • Social value: offering a sense of belonging or identity

Good Products Care About User Value

  • Internet products are mainly software applications. Compared with products in traditional manufacturing, they have the following characteristics:
    • Distribution cost drops sharply -> products become easier for end users to access -> product quality becomes a core factor in product success
    • Products can collect comprehensive user data -> the team’s understanding of users improves qualitatively -> personalized recommendations become possible
    • Production cost drops sharply -> rapid iteration becomes possible
  • In the internet era, product quality has become more influential than user or brand awareness in determining whether a product succeeds. Because distribution cost is lower, the cost for users to compare alternatives also falls. Products that deliver more user value are more likely to win.
  • Well-designed internet products are designed and optimized around user value. Every feature, interface, and interaction should provide clear value to users. This requires product teams to deeply understand user needs, pain points, and usage scenarios, and to continuously adjust product strategy through data analysis and user feedback.

User Value Is Not Product Value

  • Product value consists of two parts: user value and business value. User value comes first, then business value. Together, they form the overall value of a product.
  • The user value part refers to the incremental value a product creates for users. It also needs to consider the relationship between individual value and group value.
    • User value increment = (new value - old value) - migration cost
    • User group value = average user value increment created * user scale
  • The business value part refers to the product’s economic value in the market, including direct returns such as revenue and profit, as well as indirect returns such as stronger brand value and increased market share. Its measurement ultimately depends on average order value, frequency, and user volume.
    • Business value = value per user * number of potential users = (price users are willing to pay - cost) * usage frequency * number of potential users

Case Study

In 2022, Yuque defined the target users served by its consumer product line, namely its note-taking product, along with the scenarios for recording, constructing, and sharing knowledge. Starting from human nature and usage scenarios, it clarified the problems to solve and proposed a productizable method for solving them, thereby creating user value.

Case Study: The What, Why, and How of Yuque’s Consumer Product Line

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The 7 QuestionCase Study: Yuque's Consumer Product Line