In Agile product development, product value is related to a product’s usefulness. A product is considered valuable if it is usable, fit for use, or useful. Product value is the core concept behind value-driven product development. It’s all about focusing on features and functionalities that deliver the most benefit to both the customer and the business
Product value measures how well what you build serves the business
goals and delivers what customers need.
Product Value:
- The “What” and “Why” of Your Product: It encompasses the overall benefit your product provides to users, solving their problems and addressing their needs. This value can be tangible (e.g., increased efficiency) or intangible (e.g., improved user experience).
- Customer-Centric: Understanding customer needs and pain points is crucial in determining what constitutes value for them.
- Multifaceted: Product value considers not just user satisfaction but also business goals like revenue generation or market share increase.
Value-Driven Product Development:
- Prioritization Framework: This is a systematic approach to product development that prioritizes features and functionalities based on the value they deliver.
- Focus on Outcomes, Not Outputs: It emphasizes the results and impact of features, rather than simply building functionalities.
- Continuous Measurement: Value-driven development involves constantly measuring and evaluating the delivered value to ensure it aligns with goals
How to Calculate Product Value
There is no universal formula for determining the exact value of a product. This is why most product teams spend time evaluating all factors that impact how a customer perceives the worth of a product — from initial concept to well after launch.
Product Value is related to the usefulness of the Product for the Customer/User to solve a Problem. Value is related to Outcomes not to Output (Ageling 2020, Apr. 18).
A Product must be Fit for Purpose (Anderson, Zheglov 2017) and
must be able To Do a Job (Christensen 2016, Ulwick 1999).
Five key types of value in Agile according to the Scrum framework
Thinking about these different values helps Agile teams build products that people not only need but also want and enjoy using.
Further Readings
https://www.aha.io/roadmapping/guide/product-strategy/what-is-product-value
https://www.scrum.org/resources/blog/five-types-value
