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In a recent webinar, we sat down with Dan Olsen, best-selling author of The Lean Product Playbook, to discuss his proven six-step process for product managers to rapidly achieving product-market fit. Following the presentation, we held a great Q&A session with Dan and have included a summary of a few takeaways from our chat with him below. You can watch the full webinar here.
A product’s differentiated features are great, but only if they provide real value to the customer. Dan stressed that it’s important to be explicit when developing a value proposition and that one way to do that efficiently is through testing. Even before you begin prototyping, Dan points out that testing the value of your features via a clear value proposition will save you time and money. Understanding how your value proposition resonates with your target audience before investing too much time in development is key. Once you’re clear on your value proposition, test your messaging on landing pages and perform qualitative research like customer interviews to get a baseline for how customers respond to your features.
Dan highlighted the importance of pricing and stressed that price isn’t just a dollar amount—it can also come in the form of time and resources saved—or spent. He notes that if you’re creating and ensuring value for your customers, pricing should align proportionately. Take a productivity app for example. If the app is saving people time to the tune of $100, then you should price the app in relation to the value of their time. In other words, if you charge exactly $100 for your product but customer perception is that they only get $100 worth of value, then they’re unlikely to buy. If you charge less than $100, on the other hand, customers are more likely to purchase because they can immediately see the added value.
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