Customers are more likely to pay a premium for a product that is useful, helpful, and valuable. In this guide, I will share strategies to help you create great value in your product, which can ultimately lead to increased MRR or profits.
Strategy #1: Create functional value
The first technique is to make your product useful at a functional level by providing practical or utilitarian benefits to your users.
You can identify the fundamental needs of your users and solve their problems by incorporating relevant technical features into your product.
Components of functional value:
Speed: Offer a faster way to accomplish a specific user’s goal
Performance: Easy to use and user-friendly
Friction removal: Reduce obstacles and unstuck the user’s journey
Technical benefits: More accurate and secure
Example:
💳 Digital banking app: Manage savings, expenses, investments, and insurance in one account.
🗃️ Task management app: Easily sync tasks across all your devices and collaborate with team members.
📈 Analytic tool: Analyze and generate insights report and prediction instantly
🧰 No-Code software: Create mobile apps in minutes using drag-and-drop
Strategy #2: Create monetary value
You can also combine functional value with monetary value by focusing on helping your customers save money, avoid losses, and increase their savings.
By offering benefits that help customers achieve these goals, you can create a product that not only provides useful solutions but also generate economic value.
Components of monetary value:
Affordability: By curating the best deals and offering high-quality products at affordable prices, you can attract price-sensitive customers who value both quality and cost-effectiveness.
Reduce expenses: Eliminate middlemen, complex cost structures or hidden fees
Great savings: Discounts for bulk purchases or long-term subscriptions can incentivize customers to make larger orders, resulting in higher revenue per transaction.
Loyalty program: Offering point-based rewards, exclusive discounts, and perks to frequent customers can motivate them to continue doing business with your company.
⚡️ Ecobee’s smart thermostats and home devices help users optimize their energy consumption and lead to cost savings on utility bills.
👾 Amazon's Prime annual subscription offers customers a range of benefits, including free shipping, access to streaming services, and discounts on select items.
☕️ Starbucks Rewards allows customers to earn free food and drinks.
Strategy #3: Create emotional value
You can increase a product’s value by creating strong pleasant experiences.
Consider how your product makes customers feel after they use it.
How to create emotional value:
Reduce stress: Simplify people’s lives by removing complexities
Reduce uncertainty: Remove doubts by providing transparent detail about how your product or service works
Increase confidence: Provide a guarantee or promise that your product will deliver the desired results
Remove fears: Assure customers by addressing their concerns
Example:
🎯 “I feel organized”: Notion streamlines your personal and work projects by providing an all-in-one workspace that allows you to manage tasks, notes, and databases in a single platform.
🧿 “I feel trustworthy”: The Zebra, an insurance marketplace, provides a platform for users to compare insurance quotes and purchase policies from trusted providers, assuring users that they are making an informed decision.
💪 “I have hope”: Noom is a weight-loss app that stands out by using psychological principles to help users lose weight and create a lasting result. App tagline: 78% of Noomers lost weight in a six-month study.
Strategy #4: Create social value
Another reason why people may choose to pay for a particular product over a competitor is because it fulfills a person's social status or social needs.
This means that the product is seen as a symbol of their status or helps them connect with others who share similar interests or values.
Components of social value:
Belongings: Create a sense of community around your product by building an engaged online community where users can connect with like-minded people.
Motivation: Provide additional support, guidance and resources to help users when they are stuck.
Recognition: Provide rewards or celebrations when they achieve certain milestones.
Example:
👨🏫 Product idea: A content platform focusing on developing quality resources on how to scale a consulting business to 7 figures.
🤝 How to create social value: Offer monthly expert workshops with successful consultants who have scaled 7-figure consulting services. This provides users with the opportunity to learn from and interact with highly respected experts in their field.
☎️ Monetizable feature: Charge users for accessing community features, e.g. attending monthly workshops, exclusive content, and 1:1 priority access to 7-figure consultants.
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