How to Measure User Value in Three Easy Steps
Typically, teams gather data that shows whether or not their product is successful if a person does three things:
- signing up for it or paying for it
- using it more than once
- telling others about it
By looking at this data, teams make assumptions about whether their product or experience is valuable to users. After all, a person wouldn’t pay money or use something that they didn’t like or find helpful, right? Well, not really.
Think about how many products you use each day because you have to. I’m sure there are several in your mind. I believe that every time I use the UPS website, I have done something wrong in a previous life.
Think about the products you like to use and are pleasant, but not perfect. I’m sure there are many. I love my Vitamix for making juice; it’s easy and fast, but it’s deafening.
Think about products you use or experiences you go through that are indeed a joy that you can’t get enough of, and feel great after using. I bet that amount is few and far between. I genuinely love the Airbnb app. It’s like they thought of everything I need when I need it. I arrive at my destination the Airbnb app immediately shows me directions for lodging.
This difference in how a person feels about the experience is why teams should measure user value. Valuable products and experiences they solve a problem, meet a need and help us succeed. Valuable products and experiences make our lives better in a specific way. The definition of what is a valuable product or experience differs for each person, which makes it challenging to determine from traditional behavioral metrics how truly valuable something is to a user.
As Harvard Business Review says…
“The amount and nature of value in a particular product or service always lie in the eye of the beholder, of course.”
Value is entirely intrinsic to our users. We have no say in what’s truly valuable to them and why. Only users know what is valuable to them.
Measuring user value means that teams can explicitly understand — from the user’s point of view — whether or not their product is valuable. They can then probe into why or why not. Product teams can use this data in combination with behavioral data to prioritize roadmaps, explore new markets, try out different designs, and experiment with new ideas.
How to Measure User Value in Three Steps
To measure user value, we have to ask if the product or experience is valuable. I’m not saying that we ask, “Is this experience or product valuable to you? why or why not? Since value is in the “Eye of the beholder” we have to use their meaning of value. We ask how the product or experience helps them achieve their goal or solve their problem.
Here’s how to get started. I‘ve used this method as a product manager, and I’ve taught this method to my students at UC-Berkeley in our Design Thinking and UX Strategy class, who have also found it easy to practice. This easy method shows teams how to measure value by identifying value promise, identifying the core action, and talking to users.
- Review the product or experience’s value proposition or an idea’s value promise. If you have a value proposition defined, use it. If your product or experience does not have a value proposition or your idea does not have a value promise, then I recommend starting with my article: “How to Define User Value with UX Research.”
For example, here are a few value propositions for personal investment services.
- Ellevest helps women reach their financial goals.
- Charles Schwab: We offer personalized guidance, award-winning service, and expert perspectives that help investors achieve their goals.
- Acorns help you grow your money.
2. Identify the core action a user must take to realize the value proposition. The core action is the one behavior that a user must complete to receive any value on an experience (like a website or online chat) or product (like an app or software platform). For example, the core action to demonstrate the value of achieving financial goals with the product is purchasing an investment. If the product does not allow this core action, there is no behavior that users can perform to receive or recognize value.
If you need help identifying the core action, user behavior, or task, then I recommend reading Engagement Hierarchy: Core Actions by Sarah Tavel.
3. Talk to your users about how well that product or experience delivered on value.
- Ask the user to complete the core action using the product or experience. Watch them without interrupting or helping.
- Ask the user these questions:
- On a scale of 1–7, how well did this experience help you [list value proposition]?
- Why did you give it that score?
- What specific things in the experience or product help you feel that way?
- Are there any other products or experiences that help you [list value proposition]?
- How does the competitor product help you [list value proposition]?
The scale gives a gauge or how well the product or experience is fulfilling that specific value promise. The scale allows benchmarking of the product or experience over time. The follow-up questions help the team understand how and why the user finds — or doesn’t find — it valuable and can reveal what features and benefits matter to them and unknown use cases.
For example, assuming that a core action is purchasing an investment, I would ask the user to perform that task on the app and website and then ask them the following questions.
On a scale of 1–7, how well did this experience make you feel that you could reach your financial goals over time? (Using the value proposition from Ellevest, I’d reword the question a little bit because financial goals are long term.
- Why did you give it that score?
- What specific things in the experience or product made you feel that way?
- Are there any other products or experiences that help you feel that you could reach your financial goals over time?
- How do they do that?
With this data, I have a signal on whether or not your users find value the product or experience using the core action. Look at their answers to the follow-up questions to identify the elements, features, content, or moments that make the product valuable. Learn which competitors — that you may or may not know about — are more valuable. Find the gap between the value the product is currently providing and what the users need and see the opportunity.
Talk to your users using this framework for value and see what emerges. You may have an experience like these successful product wizards.
“Why aren’t customers responding to our product ‘improvements?’ Why isn’t our hard work paying off? For example, we kept making it easier and easier for customers to use IMVU with their existing friends. Unfortunately, customers didn’t want to engage in that behavior. Making it easier to use was totally beside the point. Once we knew what we were looking for, genuine understanding came much faster.” — Eric Reis, The Lean Startup
“We launched the product and ran marketing campaigns around it, put it out in the market, and we did not sell very many… I made a hundred calls. I know what people are doing with the product, and the vast majority don’t use it, don’t like it, and aren’t gonna be one bit sad if we turn it off. But, I’ve got this handful of outliers that are using this product in a way we never expected, and they’re going to be very disappointed when we turn it off…That sparked a conversation internally about how we could reposition this database into something completely different and sell it successfully as this other thing.” — April Dunford, author of Obviously, Awesome.
Product teams that measure and track user value regularly can sense attitudes changing about their product and plan better for the future. Ultimately, this method helps them deliver products and experiences that make users feel great and successful.
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