Ever wondered why your marketing ads are not performing? Why your users leave right after they have started a free trial? Why, while you have happy customers, you are struggling to find new users, easily?
In 9/10 cases, the problem is the same and called Value Gap. But what is the Value Gap definition and how can we deal with it? In this short article, I will explain what the Value Gap is and I will share you Growth Sandwich’ Value Gap Canvas™ to solve it yourself.
Value Gap in Marketing or Gap in Value Proposition is one of the most common problems that SaaS businesses are dealing with. Closing the value gap will prove one of the smartest things you have done so far for your business. But what is it exactly?
Expected Value ≠ Experienced Value
The value gap is the discrepancy between what your fresh users expect compared to what they actually experience from your product. That problem could have many different causes such as:
A big value gap can be the reason why your business might fail or you will never find the repeatable selling motion that your investors are asking for. But how can we solve that problem?
Closing the Value Gap won’t be easy. It requires you to step above your biases, speak with your users, become a little bit of a user researcher and try to find the commonalities in their feedback. In simple words, you need to compare what fresh users say and what power users are saying. I broke the process down to steps to make that easy for you to run it yourself.
The first necessary step is to define what power user means for your product. All products have different ways of measuring that but in most cases, the criteria to define a power user are coming from Product Adoption and Retention.
In simple words, users that heavily enjoy the value proposition of the product and that’s reflected in high adoption and high retention are the ones that need to be prioritised.
The second step is to understand exactly what do we mean by ‘fresh user’. For the sake of the Value Gap analysis, a fresh user is the user that’s hasn’t yet experienced the product at all or has experienced it for very little time, under 10 minutes. These users either don’t yet know how your product looks and if it will deliver its promises OR haven’t yet had the time to figure this out.
Recruiting users for interviews is one of the most challenging steps of this process. While power users might prove a bit more eager to speak with you, fresh users are very reluctant.
To recruit power users, I suggest running a recruitment email campaign with a small financial reward, such as 20-30$. It will speed up the process and help you finish earlier. If you need my template email on how to recruit power users, feel free to contact me directly on Linkedin and I will share it with you, for free.
On the other hand, recruiting fresh users will prove a bit more challenging. The process I have used in the past with success is the following:
Not all interviews will work great and of course, this exercise is not a one-off thing. Closing the Value Gap needs consistency and patience but with these tactics, you are good to go to the next step.
Performing user interviews is an art and I don’t recommend that you do them themselves unless you have the proper training. But if you cannot afford to hire a professional in closing the Value Gap in Marketing through user interviews , you can use my Value Gap Canvas. In the Canvas, you can find the very basic questions needed to be asked in order to identify the Value Gap.
Analysing the feedback you have received from the users is, personally, the best part of this process for me. The feeling of empathy you are feeling is one of a kind. Performing an effective analysis, though, is not that easy and needs to follow some steps:
Now is the time to enjoy the fruits of your effort. There are a lot of ways of making use of all the valuable feedback you collected and here are just some of them:
As competition increases, we will more and more SaaS products failing in their marketing efforts. The Value Gap is Marketing is one of the most important and common challenges in the SaaS world. Act upon it and help your marketing reach its potential.