Tl;dr First, create User Value. If you don’t, your product will fail. The four Value Dimensions: Time, Money, Utility and Prestige, provide a framework for understanding how value is defined and perceived by your users, so you can design your products to meet, and exceed, their needs and desires.

Only a few online products become hugely successful. Vast sums of money get poured into startups that never make money, or achieve only limited traction and quickly crash and burn. So how can you be sure your great idea is worth developing into a product?

The answer lies in a simple question: “How will this product create value for the user?”

We can fall in love with our cool idea for a product, and may even be able to describe how its success would benefit our business, but without the creation of user value, users will not adopt it.

User Value and Adoption

Users adopt a product because of its value to them.

Breaking that sentence down…

Users adopt…
User adoption, which is analogous to ongoing usage, is the primary driver of recurring revenue and of users evangelizing your product. No user adoption, no business.

…a product…
Users actually don’t see your product as a product, in the way you do – for the user, the product is the sum of the experience of completing tasks. The larger task of say, paying a bill online, is made up of a number of sub-tasks, such as filling a credit card info form. These smaller tasks are made up of yet smaller tasks, such as selecting the State name on the credit card form. Any online experience is, at its core, a hierarchy of tasks, even if it’s only selecting the next Netflix movie with the Roku remote.

…because of its value to them.
Each of these tasks, large and small contribute to the user’s overall perception of value. If that perception is not initially created, and maintained in innovative ways over time, the product fails.

So it’s important to understand what tasks the user values in your product and make them even better, as well as discovering what the tasks user find less valuable and should be reworked or removed.

The sense of value is a perception that is different for each user, and therefore elusive to define. Also, users won’t tell you anything directly. If you ask a user a direct question, such as: “So, do you think this new feature will be useful to you?” they will say often say “Yes”, or whatever it is they think want you hear. Maybe it might be useful to them. Can they really know at first glance how much they will use it over time? This like leading the witness, as they say in courtroom dramas.

It’s better to have the user to show you how they perform the process, and encourage them to talk out loud as they go.

They you can look and listen for the user’s actions and comments around what I call The Four Value Dimensions.

The Four Value Dimensions

Because value is perception based, it can be discussed in many abstract ways. To simpify the concept of Value, let’s think of it in terms of just four “dimensions”. These dimensions are:

  • Time
  • Money
  • Utility
  • Prestige

Each Value Dimension has a relative and absolute aspect to it, as shown in this table (Fig. 1)

Value Dimensions Aspects

Dimension relative absolute
Time faster worth the time
Money less expensive worth the cost
Utility easier worth the effort
Prestige makes me look good makes me feel good

Fig 1. Value Dimensions table

It’s helpful to see the relationships of the value dimensions and their aspects in the following diagram (Fig. 2)

Fig 2 The Value Dimensions diagram

Let’s look at the two aspects of each dimension – relative (inner circle) or absolute (outer circle).

When you are on the inner circle of relative value, you are being compared to other products, and you are fighting a competitive war of feature differences, thin margins and low cost of entry for new competitors. While you can make money providing “inner circle value”, you will always be a commodity.

When you are on the outer circle of absolute value, you are moving away from being compared to other products and simply being adopted by users based on the absolute value you provide. Let’s consider that in respect to each of the four dimensions.

Money

A product can either be less expensive than another product that does something similar (relative value), or simply be worth the cost in its own right (absolute value). Either can be a win for your product, but absolute value is better.

Apple, and especially Steve Jobs, understood that design could create absolute value. Even though Apple came late to the game with mp3 players, phones and tablet computers, each time they delivered a competition crushing product with massive Worth the Cost outer circle value. Each product immediately became the benchmark, the object of maximum desire, and the high price didn’t matter because it was Worth the Cost. There was massive Money Value, and Apple now has massive cash reserves, i.e lots and lots of Money.

Time

Online, I’ve observed that time is somewhat elastic to users. If you actually compared your online store’s checkout process with a competitor’s, you may find it take a little longer for users to checkout at your store. In fact, that can be just fine, because the user isn’t actually timing the difference. The user’s perception of Time is closely related to the Perception of Effort.

So, for example, because your well-designed checkout process makes it super clear about total costs and delivery times at every step, and the task path is so well designed, the user completes the purchase in a continuous flow, without any “stop questions”. Stop questions are questions the user thinks of as they go along that break their task flow, such as “Where does it tell me if I’ll be charged state tax?”, or “Where’s the Done button?”). When the user “flows” through a task, they are left with the perception that they completed it quickly.

For that user, it was absolutely Worth my Time – they got checked out in one continuous flow, first time, no problems, and no unanswered questions through the whole process. A nice outer circle experience. This is very different from the inner circle Faster – no one who has an outer circle Time experience ever thinks: That took 10 seconds longer than last place I shopped online. However, lots of stop questions make time drag for your user, and that is an inner circle experience whose causes you have to identify, and then fix these problem issues in your task flows.

Utility

Utility is a functional value – how well does this product do what I need to do? Around Utility, we listen for use comments on missing (or available but unused) features, if the tasks offered enable to user to achieve their desired goal, and if the interface answers the big three UI user questions: Where I am? What can I do here? What should I do next? In short, is it obvious what is offered, and is it easy to use?

Prestige

Prestige can seem more abstract than the other three dimensions, but it’s actually very simple and an equally important component of Value. Users, like most of us, want status—they want to look good in the eyes of others in some way (relative). Getting lots of likes for your pics on the yacht in the Greek Islands is a manifestation of inner circle I Look Good prestige. Nice, but not 100% satisfying.

But we all know that feeling good in ourselves ultimately matters even more than what other think about us. Users become very attached to a product that lets them achieve a personal goal, such as “I’m creating a great photo library of my family and friends” or if it delivers some level of self-actualization, such as “I feel I’m good at my job when I use this product.” Even simply congratulating the user for completing a task in your product plays right into that feeling of Prestige.

Creating Absolute Value

While plenty of companies do very well on that inner relative value circle, creating absolute value is the path to a unique product. A relatively better product is easy prey to competitors who can always make their product that bit better than yours. In terms of the Value Dimensions diagram, we want to be on that larger outer “absolute value” circle where the opportunity for a “outer circle experience” product space exists.

As an outer circle example, Airbnb didn’t try to improve hotels. They created a totally new way to find somewhere to stay for the night.

Which circle is your product on? Are you offering a better version of what already exists or is your idea a new way to fulfil your users’ needs and desires? In other words, does your product sit on the inner, relative value circle, or on the outer absolute value? If it’s on the inner one, you might ask yourself: What would we need to do for our users to dramatically shift their perception of the value of our product, and move it on to the outer circle?

Value Dimensions Examples

To see how all this works, let’s look at examples of the Value Dimensions with a couple of well-known companies.

Chewy.com

A business based on shipping bags of dog food across the country might seem absurd, but lo and behold, chewy.com, the pet supplies delivery service, is thriving in 2019, because they deliver on all four of the Value Dimensions.

Riding on the wave of increased pet ownership, today’s perception of pets as family members, and the sheer weight of a bag of dog food, chewy.com’s 2018 revenue was $3.5+ billion dollars, up 68% over 2017.

So let’s put Chewy up against the Value Dimensions.

Time – why spend time going to the store to pick up heavy dog food bags when it can be delivered to your door?

Actually, delivery takes a day or two and your local Petco is probably just a short drive away, but generally, users can anticipate when the dog food will run out and add buying it to their weekend chores, so it’s probably never going to be like your teenager drinking all the milk and having to get some at 6 am for breakfast.

Money Price checking a few items with a Petco store reveals little or no difference in Chewy’s cost. The most important thing here is that the convenience of home delivery doesn’t affect the price you are used to paying.

Utility Here’s where they win—not only is it convenient to be able to order bulky products like dog food online, but Chewy’s Autoship subscription program lets you order on a recurring schedule: the dog’s food just shows up. That’s “don’t-think-about-it” easy. You are notified before each shipment goes out, so that you can delay delivery if Rover’s not quite ready for a new bag yet. Becoming a subscription service, instead of just a retailer—the Holy Grail of any online business—generates recurring revenue for Chewy. This also reduces the user’s Time factor to virtually nothing.

Prestige Buying through Chewy is carefully designed experience that lets “pet parents” (yes, that’s what Chewy calls them) feel very good about the way they are taking care of their furry child. Apparently, people love to open the boxes with their pet.

Instagram

Instagram is all about sharing photos. There used to be plenty of places to store pictures on the web, most notably Flicker, but Instagram changed the game, by focusing on sharing. Sure, Instagram could be thought of as a place to store your photos, but it caught on because it allowed you to share a carefully curated vision of your life.

Time It takes about 30 seconds to take a photo, add a comment and post it. So, good Time value, but no different time-wise from other photo sharing sites.

Money It’s free. But so are lots of other photo sites.

Utility It takes just a few clicks to post a photo with a comment, so pretty easy.

Prestige And here is where Instagram wins. Why does anyone put photos on Instagram? The answer, I think, is primarily Prestige. With a little careful curation, your life can seem legendary compared to others (and even to yourself), and oh, those likes. A big blast of feel-good dopamine with every heart. In short, at the core of Instagram’s success is the prestige of the recognition that comes with sharing your oh-so-interesting life with everyone else.

However, it’s game over for a social app as soon as the user’s feeling of “prestige with every post” starts to fade.

This why Facebook, who saw the writing on their wall (reading: “Teenagers are leaving in droves”), and in 2012 bought Instagram, with a measly 30M users, for a mind-boggling $1B — $9+ per user!

Social apps don’t sustain their popularity by pursuing incremental time savings or making it ever easier for users to post; their relevance is predicated on maintaining the user’s feeling of prestige.

Instagram filters were a huge boost to Instagram and now 18% of all posted photos are filtered. The user’s world looks even better through that Clarendon filter! You could say that that although the Time dimension is slightly impacted by adding a filter, the perceived Prestige boost more than makes up for it.

In recent years, Instagram focused on the Prestige aspect of their product, realizing that if you see your favorite celebrity, or even a friend, wearing a particular brand of sneakers, you might just want to buy them (more prestige), and is now becoming a major e-commerce player. Brands large and small know that an Instagram presence is essential, and Instagram’s new Checkout features drives sales, and their own bottom line, with easy in-app purchases.

Users

Now let’s look at Users, because value is only meaningful in terms of users’ needs and desires. So you want to know: Who are our users? And how do the four Value Dimensions look for them around the solution we want to provide?

If you haven’t done so already, start by identifying exactly who has the problem your product will solve. If you can’t identify users with real needs or desires around that problem, you need to find a better idea. So how do you those users?

Research made simple

Most product ideas are born in response problems you hear about or observe around you, and your potential users are part of that observation. Persuade these people to talk to you, either in their work location or in a formal research setting, and observe how they currently achieve the goal your product will deliver.

While it can be difficult to resist talking about your plans, it’s best to not even mention your product idea during initial research, but simply say you are looking at the process, whatever it is, to see if you can improve it. Let users tell you how their current way of meeting that need or desire is achieved, what they do and don’t like about that solution, and how they think it could be better.

Observational Research

This kind of observational research has two parts, process observation and experience observation, that happen simultaneously during task-based user research sessions.

A task-based research session is structured to ask the user to perform key tasks that make up the overall process you want to observe, and note the individual steps each user takes to achieve each task. It’s important to encourage the user to talk, by encouraging them to describe the steps they are taking as they go. As the facilitator, you ask the user to perform a given task, such as: “Now please show me how you would share this report with others'” but you don’t ever help directly. Guide the user by asking questions like: “You’ve paused – what are you thinking?” and come back with “Where would you expect the Share Report action to be?” Never show or tell the user how to do anything. No hints, nothing. It’s OK if they fail to complete a task – that tells you far more than helping them through a problem step they would never have completed on their own. Just move on to the next task.

Process Observation

Process observation is about understanding how the user performs a task. It’s important to make observations like: Are they performing the task in the anticipated sequence? What artifacts (notes, online files, other applications, etc.) do they use? Where did they go off track? Could they work out how to get back on track? Could they complete the task? How long did it take?

If they couldn’t find the right button to press, or miss a key step in a process, you obviously need to note that, so that you can determine if other users are also having that problem, and determine if a UI change is necessary. (Record the screen and audio of user sessions with Camtasia so you can review and take notes later.)

Experience Observation

Experience Observation is about understanding the user’s experience of performing a task. After each task, ask questions like: “So you just created a product listing. How was that?” That gives the user free rein to say whatever they want to say, and you can just listen.

Use follow-up questions to dig down into the more emotional side with something like “Sounds that task is pretty tedious for you. What’s so frustrating about it?” Then come back again with “Oh got it, so how should it work?”

The aim is to understand how the user feels as they perform the process. Because value is so perception based, understanding the user’s experience of using the product is at least as important has observing their ability to simply complete the tasks.

The more user research you do, the better you get at “peeling back the onion” and using Observational Research two basics: observation and conversation, to understand the user’s needs and desires.

A Case Study

In the case of an industry-specific recruiting app I recently worked on, research with potential customers revealed that our industry “competitor” was yellow legal pads and massive Excel spreadsheets. And, to our surprise, while everyone conceeded they were sort of working in the Stone Age, users had a lot they liked about the current system.

Excel delivered plenty of value for them, providing easy sorting and filtering, both to manage the process and to create reports. The yellow pads they keep next to their computers for notes and to-do items were “very convenient and easy to flip through,” as one person explained. They had also been doing it this way for years, and tasks that would irritate anyone learning the process for the first time, for them were now “just how you do it”. However, it was clear that their process was truly inefficient and slow, and an app had the potential to offer significant improvements.

So, while we immediately identified some important Time and Utility Value needs around recruit management and operational reporting, a bigger insight came when we asked: “Who gets the reports?”, and we discovered an interesting Prestige value. The reports went to senior executives in the company who paid a lot of attention to them. The team took pride in doing the Excel reporting work at the end of each week, formatting the reports carefully, because they knew they were doing important work for important people.

So, along with all the red-hot features we already had under consideration for this new product, we learned that, at launch, it had to have sophisticated filter and sort capabilities on the business records, good-looking reporting, and a searchable Notes area.

Without these features, we couldn’t even reach Value Parity with notepads and Excel. A key decision was to focus energy on “one-click” creation of nicely formatted reports, and let stakeholders view those reports online. We had seen how the delivering the reports provided the team with a feeling of personal, outer circle Prestige. This meant some of our intended at-launch features had to wait until a later release, but through this process, we delivered a first release that had “outer circle” value from the get-go.

Combining Value Dimensions and Users Needs

Value Dimensions analysis gives focus to what users seek, love and dislike in your products. It does this by simplifying the analysis of qualitative data, meaning non-numerical data such as user interviews, which doesn’t readily lend itself to scientific analysis.

All four Value Dimensions always matter in varying degrees, and Value Dimensions Analysis lets you discover the relative importance of each to your users, so that you can manifest that balance in your product design.

I’d welcome your thoughts and comments, and if you need help developing or refining the user experience of your online product, please contact me.


Related Articles

Chewy.com

Chewy is Going Public
https://www.marketwatch.com/story/chewy-is-going-public-5-things-to-know-about-the-pet-humanization-products-seller-2019-05-03

Instagram

Reasons Instagram will overtake Facebook
https://www.convinceandconvert.com/baer-facts/9-reasons-instagram-will-overtake-facebook/

How Filters are used by Instagram’s Most Successful Users
https://medium.com/@stpe/statistics-how-filters-are-used-by-instagrams-most-successful-users-d44935f87fa9

Why we filter our photos and how it affects engagement
http://comp.social.gatech.edu/papers/icwsm15.why.bakhshi.pdf

Instagram Checkout
https://www.entrepreneur.com/article/330933