Product Value Management Model
Product value management (PVM) is an organizational strategy that includes a set of processes, tools, and activities that help companies evaluate and manage the overall value of their products. The goal of product value management is to align product and business objectives, increase product quality, reduce time to market, and optimize product portfolios.
The purpose of product value management is to identify, maximize and sustain the value of a product throughout its life cycle while enabling the product to meet customer needs. Product value management begins with product portfolio management. In the portfolio management phase, an organization determines its product offerings, the customer needs that these offerings will meet, the components and features of the products, and the go-to-market strategy for each product. The next step is to set up the product value management process. This process involves identifying, developing, and optimizing value streams to maximize value creation. After product value streams are defined and identified, companies can begin to measure product value elements, assess value propositions and adjust product pricing.
During product value measurement, companies assess how the customer perceives the product and how the customer’s expectations from the product can be fulfilled. Product value assessment involves gathering and examining customer feedback, analyzing customer data, and understanding customer behavior to understand value elements, such as product stiffness, usability, convenience, reliability and durability. Once value elements are identified, they can be used by companies to distinguish their products and services from their competition and to create competitive advantage.
Companies can use product value management to develop alternative products or services that can satisfy customer needs. This is followed by a process of curating customer data to optimize customer value. Companies use customer data to develop products that can effectively meet customer needs, such as a product that increases efficiency or offers better convenience. Customer data can also be used to understand customer preferences and segment customers based on their preferences. Once segmentation is done, companies can provide personalized experiences to each customer segment.
Product value management also helps in improving customer service by understanding customer requirements, suggesting different product packages, customizing product features, and optimizing product performance. Companies use customer feedback, product performance data, customer segmentation and customer service analytics to enhance customer experiences. Companies can also use product value management to develop product roadmaps. The roadmap helps in identifying current product issues, opportunities and areas for improvement, and allows companies to identify future products, features and solutions.
Finally, product value management enables companies to evaluate and revise their product strategies. Companies use customer feedback and product performance data to determine if the product strategy is meeting customer needs, or if there are opportunities to optimize the product offering. Companies also use product value management to determine when to refresh the product or implement new features or services, and when a product should be retired.
Product value management is a key organizational strategy, as it helps companies understand customer needs, develop products that meet those needs, and maximize and sustain the value of their products. By aligning product and business goals, optimizing product portfolios, measuring product elements, and improving customer experiences, companies can maximize revenue, increase customer loyalty, and create competitive advantage.
