Exploring software value

Overview

• Explored the meaning of “value”

• Generated findings that supported product decisions by Product Managers, Marketers, and Leadership

• Managed research conducted by a team of junior researchers

***Due to NDA obligations, key information has been obscured. For more information, message me to schedule a meeting.***

Background

How much will they pay for it? This question haunts product teams. The act of purchasing an item is a declaration of its value and is essential to the survival of a business, but value can be tricky to measure. While a product team might be inclined to ask their target customer, the answer the user provides may not be an accurate reflection of their actions. People aren’t good at predicting their future behavior, so any approach to understanding value has to be taken with a grain of salt.

After being directed to figure out how to monetize software products that were currently available for free, project managers at an audio equipment company previously worked with the company’s research team to identify five potential features of a desktop audio recording app for a consumer amateur audience. Prior research indicated that these features had a clear place in the audio workflow of different types of customers, including amateur musicians, podcasters, and content creators.  My involvement with the team began with the question: How much should the company charge for these premium features?

In order to understand users’ perceptions of the value of the features in question, I lead two phases of research with a team of myself and two junior researchers. Working with the Project Manager and Software Engineer, we co created a robust mixed methods research plan on a limited time frame. The research plan explores value by estimating the prices of various features and apps. This project had two key phases:

1. Value Interviews

2. Value Survey

Value Interviews

To explore perceptions of value, we not only asked users to describe what features appealed to them and what job that feature would help them accomplish, we also asked them to estimate the price of the feature. Although we did not plan to use averages of a number sourced from qualitative research in pricing decisions, having users provide us with a number gave us a proxy for understanding the differences in value each feature held in our customers’ eyes.  Participants were a mix of musicians and podcasters who:

• Own a microphone compatible with a computer

• Purchased this microphone within the last two years

• Use or are interested in using 2 audio channels while recording

• Have audio mixing experience

During 60 minute moderated interviews held via Microsoft Teams, the participant and researcher explored value in four key phases:

1. Warm up, ask about software use, payment, and value in general

2. Introduce the App concept, and explain the free include features

3. Introduce a premium feature, discuss value and estimate cost

4. Discuss a bundle of all features, discuss value and estimate cost

Users were compensated $75 for their time. At the conclusion of these interviews, we learned which features users thought held the most value, that value was associated with saving the user time in their audio workflow, and that all users thought the audio software features held the most value for podcasters. However, the product team was interested in understanding how value perceptions might scale to a larger audience, so I knew we needed to explore this question quantitatively.

Value Survey

Having conversations with our users helped us understand which features they thought the most valuable and why, but we wanted to make sure the perspective of these 12 users was not overshadowing the voices of other customers.

I adapted the interview methodology to a survey format, replacing a verbal estimate of price with the question “How much do you think ____ costs” followed by a slider anchored by $1 - 100. This enabled me to provide the team a more statistically valid estimate of perceived value of individual features and the premium feature bundle, given budget and time constraints.

Using the same recruiting procedure as the interview phase of the study, I worked with research operations to recruit 50 users to take this survey. Users were compensated with a $10 gift card for their time. After collecting and analyzing the data using Excel and SurveyMonkey’s analysis capabilities, I provided the product team with key quantitative information:

• How much users spent on audio software in the last month, in USD

• Percentages of users interested in using each feature

• Estimated price of each individual feature, in USD

• Estimated price of a bundle of all premium features, in USD

The users estimated the price of the software was much higher than their monthly software spend, suggesting they placed high levels of value on the premium features.  In order to move customers towards using this software and away from other software offerings, I recommended that our team price an entire software bundle lower than the current average software spend to deliver value to interested users at a competitive price.

Impact

This research supported the product team in deciding how much to charge for the features, which features should be prioritized for development, and how to market the app to customers. The project manager and I presented this research to the CTO and CMO of the company and furthered the company’s goals of developing a plan to monetize software products. I was also asked to conduct similar research for another free software product the company offers, on a product that served the audience with the audience with the most brand recognition: professional audio engineers.