The difference between value and impact and the product role in transformation
Avoid rebuilding the same old problems in a new way
A common position Product Managers can find themselves in when part of a transformation is looking after an existing product and re-platforming or rebuilding the product onto newer technology. This can come with an unclear goal of removing legacy constraints on innovation or enabling new opportunities that are not viable on the existing product. In order to avoid the trap of rebuilding the same old problems we need to pay close attention to value and impact.
Defining Value
Working with an existing product the value will be clearly defined. You just need to understand the contribution it is currently making.
The easiest way to look at this is through two lenses, the value for the business and the value for the customer. After all product management is all about using technology to solve customer problems in ways that create value for your business.
Business value is the part your product plays in revenue generation, for example an ecommerce site will be transaction based and value is built through the sale of its products.
Customer value is the problems that the product solves for the customer, again looking at an ecommerce store this is likely to be in the supply of its products e.g. a new outfit for a wedding.
Some examples of value definition in non-traditional products
Content Management System for a News Publisher
News publishing sites are examples of attention products, i.e. value is created by regular engagement and consumption of content on the site. Business value is created through adverts on the articles, therefore the more articles viewed, the more revenue is generated. The customer value is in understanding what is going on in the world and enjoyment of the content. In this model the CMS role in value creation is in streamlining the creation, editing, and distribution of content.
Logistics Platform for an E-commerce Company
E-commerce businesses are great examples of transaction products, i.e. value is created through purchases on site with conversion being a critical metric. Business value is realised through efficient order processing and reduced shipping costs. Customer value comes from certainty around the product arriving safely. In this model the logistics platform has a role in optimising cost, speed and communication of the product delivery.
Customer Service Platform
Customer service platforms are great examples of productivity products, i.e. value is created through the rapid solving of customer problems and questions. Business value is evident in improved customer retention and satisfaction. Customer value is provided by quick, effective resolution of queries. In this model the customer service platform role is to solve customer problems in the most effective way, saving money and time.
Value gaps in legacy products
When looking after legacy products taking this simple view can help understand where the value gap is. Normally you will see some sort of shift in the expectations of the customer or movement in the market, that mean, whilst you still have a viable product. Other products that can better meet customer needs can take advantage of opportunities currently closed off your business. Being aware of this and having a good understanding of where the legacy product is currently missing the mark, helps you prioritise impact driving enhancements and avoid the trap of more of the same problems.
Defining Impact
With a good understanding of the current value of your product, you can now start to think about impact. Impact being about how you alter the existing value equation, by changing how the product currently works, and making changes to that value equation.
Increasing Revenue: Introducing new features that attract more customers or enhancing existing ones to increase user engagement and sales. For example, adding a premium subscription tier with exclusive benefits to drive higher revenue from current users.
Cost Savings: Implementing efficiency improvements to reduce operational expenses. This could include automation or optimisation of current processes. For example encouraging customers to solve queries on cheaper channels.
Solving existing customer problems more effectively: Refining current features to better address user pain points or improve user experience. For example, upgrading the user interface for better accessibility.
Solving New Customer Problems: Developing innovative solutions that address emerging customer needs or market trends. This could include creating a new product line that meets a previously unaddressed demand, thereby expanding market share. For example adding an interest free period proposition to your current credit offer.
The key to creating and sustaining impact is to identify which part of the value chain you are targeting and establish metrics to quantify the changes being implemented.
Measuring Impact
While value is typically measured using lagging metrics that confirm results after they've occurred, demonstrating your impact as a product manager requires focusing on leading metrics that predict future value creation.
Lagging metrics tell you what has already happened—they confirm the value delivered but offer limited actionable insights during development. These include revenue generated, customer retention rates, or overall satisfaction scores.
Leading metrics, on the other hand, provide early signals that your product changes are moving in the right direction. They help predict whether your efforts will eventually impact those lagging value metrics, building faster feedback loops.
Let’s look at one of the examples from before, the customer service platform.
Lagging Value Metrics: Customer retention, support costs and resolution satisfaction
Leading Impact Metrics: First contact resolution rate, help utilisation, self-service adoption, agent handling time, call deflection rate
If we’re running a customer service platform transformation, we will be able to directly influence those leading metrics and earlier than we will be able to see change in lagging metrics. Focussing on the leading metrics gives us a faster feedback loop and more room to experiment as we roll out changes and new features in the platform. This means that impact should be evident long before any revenue improvements show up in the financial health of the business.
Connecting Leading Indicators to Value
The key challenge for product managers is establishing a credible link between your leading metrics and the lagging value metrics that executives and stakeholders care about. This can be helped by:
Hypothesis-driven development: Clearly articulate how specific product changes should impact leading indicators and ultimately drive value
Correlation analysis: Demonstrate historical relationships between your leading metrics and lagging value metrics
Early validation: Use A/B testing or limited rollouts to verify impact before full deployment
Visualisation: Make the supporting data easily available and open to interrogation
By focusing on the right leading indicators, you can demonstrate impact earlier in the transformation journey, secure continued investment, and avoid the trap of rebuilding a product only to discover it creates the same problems just with new technology.