How to Add Value To A Product: 10 Tried Tactics

How does adding value to products contribute to faster product growth? Because it’s the key to a better pricing strategy, competitive advantage, and customer experience.

In this article, we cover:

• How to define product value and a value-added product.
• How to measure product value.
• 10 ways to add value to products in SaaS.

What is product value?

Product value refers to the benefits a product offers its target customers. It’s based on how well it solves their problem or helps them achieve their goals.

When you enhance a product, such as by adding new features, it now has added value to the customer.

With more value and added benefits, customers are now willing to pay a higher price to reap the rewards.

Companies can charge a premium price that’s higher than the production cost because of the value-added components that customers crave.

“Value added” is calculated by finding the difference between the selling price and how much it cost to produce.

How can adding value to products benefit your business?

Adding value to your products and services gives you a competitive advantage since you have better quality. Customers expect the best experience, and they’ll turn to your company if you can provide it over competitors.

It also enables you to charge higher prices, drive high-margin sales, and increase your profits since the economic value of your product is higher.

How to measure product value?

There are different ways to measure product value. Let’s discuss 2 of them.

1. Conduct product-market fit surveys

Product-market fit surveys measure how valuable your product is by asking customers how much they’d miss your product if it was gone.

They score their feelings on a three-point scale from “Very disappointed” to “Not disappointed”.

If at least 40% of customers say they would be disappointed if they could no longer use your product, you officially have product-market fit.

If most customers are saying they wouldn’t be disappointed, think of new features or product improvements that will make your company indispensable to customers.

2. Use net promoter score surveys (NPS) to measure CX and loyalty

Net promoter score (NPS) surveys measure product value by asking customers how likely they are to recommend it to their friends.

Customers score this likelihood on a scale from 1 to 10.

If a high percentage of customers score 8+, it’s an indication that your product has a high value.

If you have too many low or mid-range scores, you know it’s time to prioritize a value-added approach to your product development.

3. Measure the number of active users of your product

As part of a regular check on the product value, many companies measure daily active users.

Depending on the platform and usage specification, active users may be defined differently. Be sure to define what type of engagement makes a user active for your SaaS business before starting the calculation.

For example, for a video-making platform, it may be the act of trying the video editor, for an email marketing platform it may be creating an email, and for a booking app, it may be creating an account.

In order to calculate daily active users, you must know the total number of unique users on any given day. Your app’s daily active users will be comprised of both the new and returning users.

If you only have monthly traffic/usage data, you can take the total number of unique visitors (users) and divide it by the days in the month. For example, if you have 3000 unique monthly sessions in February, divide it by 28 to get your average daily active users count.

If you use a tool like Userpilot, you don’t need to make any calculations. The daily active users (along with weekly and monthly active users) are displayed in visual dashboards.

10 Tactics of adding value to products in SaaS

To add value to your SaaS product, follow these ten best practices:

1. Adjust your marketing strategy to better show off your product value

To boost sales, better position your marketing strategy to show off your product quality and product value.

New customers want to feel confident that your product is the right choice to help them either fix an issue or achieve a goal.

Nail down product positioning and find your unique selling point, as well as the value-add that your product delivers. Then, use that positioning in your marketing copy across your social media, website landing pages, ad campaigns, and more.

2. Prioritize feature creation based on actual feature requests

Functionality is the key to a higher-quality SaaS. Build a product that helps customers address their pain points.

Do some market research to identify killer feature ideas for your target market. Learn where there’s an opportunity for you to provide something unique.

To find out what customers expect from your product, encourage feature requests. You can collect them with a public roadmap, feedback widgets, or feature surveys.

That being said, don’t fall into the feature fallacy trap. The trick is to give your users only the features that they genuinely need to meet their objectives. They should also align with your company objectives. Not every feature they ask for will fit these criteria.

Focus on features that allow them to get their jobs done faster and easier. Remember, convenience equals value. People are more willing to pay a higher price for convenience.

Use prototyping or fake door tests to validate your ideas before investing in the development.

3. Differentiate your product from competitors through customization

When your SaaS is going head to head with similar tools in the market, customization can be your key differentiator.

For example, ClickUp lets you customize not only the pricing plan based on the features you’ll be using but also the product UI.

ClickUp may have the same suite of features and capabilities as other popular project management tools, but their customization capabilities set them apart. It gives additional value.

4. Improve your customer experience

Many companies are using customer service as their main competitive advantage in a fast-changing marketplace.

If you deliver more valuable service, you’ll increase the overall perceived value of your product or service.

Improve customer service by making it timely and hyper-personalized. For example, appoint dedicated personnel and offer white glove service based on the customer’s purchase level.

Train your customer service representatives to be friendly, customer-centric, and knowledgeable. And offer multiple service channels, such as email, social media, and chatbots, to meet customers where they prefer.

Don’t forget about self-service – many customers prefer turning to a knowledge base of helpful content instead of the direct contact of talking to your support team.

Example of an added value

5. Add value by investing in customer education

Close the consumption gap and help your customers use your product to its fullest potential. Maximize the value they’re getting by continuously educating them on your product – offer webinars, video tutorials, and interesting case studies.

By investing in customer education, you’re investing in the long-term growth of your product’s value to customers.

6. Offer additional expert advice

Position yourself as an industry expert to go beyond simple product education. Be a primary source of industry news, helping customers up-skill their knowledge in your industry overall.

This serves two benefits – customers view your company as a leader in the industry, while also keeping your brand top of mind. They’ll turn to you when they have needs related to your product or service.

7. Consistently work to increase customer satisfaction

Routinely collect customer feedback with CSAT surveys that measure customer satisfaction.

Once you’ve collected the survey responses, analyze the data to find areas where you can make product improvements and exceed customer expectations.

Are there spots along the customer journey where you can add value to the experience?

8. Create frictionless and memorable customer experiences

Continuously analyze and optimize your digital customer experiences to add more value.

Remove unnecessary steps in sign-up forms or onboarding. Identify and eliminate areas with high friction.

Meanwhile, focus on making every interaction with your product a positive and memorable experience.

For example, you can add fun elements to delight customers and celebrate successes. This motivates users and entices them to keep coming back. Take inspiration from one of our favorite tools, Asana, which celebrates a completed task with some lively and fun UI elements.

9. Recognize your outstanding customers and reward them

To boost the customer experience, reward loyal customers with a small gift that shows your appreciation.

For example, you could give them a gift card or a free lunch as thanks for being a long-time customer. Notify them of their gift with an in-app modal that celebrates their reward.

10. Leverage social proof to increase the customer’s perceived value

People trust a company more when they see other people who have similar goals as them achieve success with your product. It makes your product more valuable in their eyes.

To leverage this social proof, ask for testimonials from loyal customers and use them in your marketing materials, product sign-up page, pricing page, and wherever else appropriate.

Conclusion

When you add more value to your products or services, you can better face competitors, charge a higher price, and make more profits.

Added value is one of the keys to long-term growth in SaaS, and it all starts with creating better product experiences.

Want to build product experiences code-free? Book a demo call with our team and get started!