TLDR: Perceived value leads to Adoption; Derived value leads to Retention.
Have you ever said this: ‘People notice things only when it breaks, they don’t notice all the things that work without a problem’. That’s because you don’t show them the value they have derived from the things not broken. Ex. When your product goes down, people will grumble. But when it is up and running for 99.99% of the time, no one says anything.
When shipping something, to increase adoption of a feature it is useful to show the value of the feature upfront. It could be in the form of a creative marketing copy talking about the business value or an animation video. But what is also important is to show the value customer has derived from the product after using that feature, say after 2 weeks or a month.
That can be made possible in two ways:
a) Passive – expect the customer to do the needful. Ex: build out a report to see how effective the new feature has been
b) Active – you show the value derived from the feature.
Of course, latter is what we should aim for while shipping it. Make it easier for the customer to see the derived value. Once they see the derived value, they become more than adopters or active users, they become promoters at best and at worst, you retain the customers.
Perceived value leads to Adoption; Derived value leads to Retention.
The reason I’m writing this is a lot of times Reporting doesn’t make it to the MVP cut. In this case, the latter strategy could be used to show the value derived. When we fail to show the value derived by the customer, we see a lack of retention for that feature.
In the B2B world, if you have built a feature (say AI Ella) that reduces a time to complete tasks by 50%, you could send out a notification to the user saying ‘In the last two weeks, Ella has helped cut down your time to complete the tasks by half’.
Swiggy: I’m a Swiggy Super member, I paid Rs. 120 for three months. When I signed up for it, I had a rough idea of how much I will save. Say, I order once a week on swiggy, I will be saving 12 weeks * Rs. 25 = Rs. 300. That is the perceived value and I like that value, so I go for it and subscribe > Adoption. When I’m up for renewal, Swiggy can tell me ‘With the last Super subscription, you saved Rs. 450, Do you want renew this’ (because I order more than I confess), I say YES (Retention). And I start telling people about it too.
Same is applicable for Amazon PRIME or UBER ride pass.