User Value

Definition

• What is user value: User value is the user’s subjective feeling, it is the user’s subjective idea whether the product or service can solve the problem. Not only do we need to create products and services that can logically help users solve problems, but also ensure that users understand and recognize the value of our products and services.
• Classic Misunderstanding
  • Product functionality is not equivalent to user value

Classification of User Value

• Utilitarian Value: Improves efficiency, saves time, reduces costs
• Emotional Value: Provides a sense of companionship, increases fun, makes people feel happy
• Social Value: Provides a sense of belonging or identification

Good Products Value User Value

• Internet industry products are mainly software applications, compared to traditional manufacturing, its products have the following characteristics:
  • The cost of product reach has dropped sharply → the product is more easily obtained by end users → product quality has become the core element of product success
  • Products can obtain all-round data from users → the understanding of users has undergone a qualitative leap → personalized recommendations are possible
  • The production cost of the product has dropped sharply → rapid iteration is possible
• Under the wave of the Internet, the impact of product quality on product success has surpassed user (brand) cognition: Because the reach cost is lower, the cost of user horizontal comparison is also reduced. Products that can provide more user value are more likely to win
• Well-designed Internet products will be designed and optimized around user value, ensuring that every function, interface, and interaction can provide clear value to users. This requires product teams to deeply understand user needs, pain points, and usage scenarios, and continuously adjust product strategies through data analysis and user feedback

User Value is Not Equal to Product Value

• Product value includes two parts, one part is user value, the other part is commercial value. First there is user value, and then there is commercial value, the two constitute the overall value of a product
• The user value part refers to the user value increment brought by the product to the user, and also considers the relationship between individual value and group value
  • User value increment = (new value - old value) - migration cost
  • User group value = average created user value increment * user scale
• The commercial value part refers to the economic value of the product in the market, including direct benefits (such as sales income, profit) and indirect benefits (such as brand value enhancement, market share increase), the measurement dimension falls on the unit price, frequency and user volume
  • Commercial value = single user value * potential user number = (price user is willing to pay - cost) * user frequency * potential user number