Defining and measuring customer value

By Andrea Spillmann-Gajek - Brighteye mentor and Founder of Success Accelerators

Customers don’t buy products. They buy value, and value drives renewal, expansion, and referenceability. Most founders can agree on that, but the challenge, particularly in sectors like Edtech and other sectors with social impacts, comes in trying to define and measure that value. 

There’s no single magic solution, but hopefully by the end of this article you’ll come away with at least a few new ways of thinking about value, and ideas to get you closer to measuring value. The key is to start where you are, measure what you can, and get creative. 

Start With the Need

One of the first places to start when measuring values is not in the outcome at all, but the need:  the problem your product solves, or the opportunity it unlocks. Most founders will have a sense of this need, but going deeper to quantify it, understand its drivers and the numbers around those drivers, will help as you try to quantify the improvements you’re making

Tip: Consider all stakeholder groups and the range of needs they might have. 

Why is it helpful to consider the need before jumping straight to value? 

→ Your product’s impact (and ultimately value) is directly related to the problem or opportunity you’re addressing. If you can measure the need, you’ll have an easier time measuring your value. On the flip side, no matter how cool the technology, if you’re applying it in an area without a real pain point or opportunity, your impact won’t be as large. 

→ As the market changes, so do the needs. Thinking about and quantifying these separately from the value can be helpful. 

Once you’re clear on the needs across stakeholder groups, you can start on the next step:

Define impact

Value is impact quantified. Since many of the frustrations in measuring value come in the quantification phase, defining impact can often be a helpful intermediary step.

Impact, at the end of the day, is the set of outcomes achieved when a solution is applied to a problem or opportunity. Impact can be financial, social, environmental, etc. It’s often helpful to think about impact across a variety of stakeholder groups and dimensions.

How does the world look different thanks to the product? What learning outcomes are students achieving? How are employees more successful? What sort of resource savings are organizations (or parents, or teachers) seeing? 

Tip: The diagram breaks out the pieces a bit more. Once you figure out this equation, you have your sales pitch, the start of your GTM motions, your customer implementation north star, and the start of your value calculations.

Measure what you can

Now that you have the set of outcomes your product is driving, you can start thinking about how to quantify each. It is highly unlikely any measurements you have will be perfect. Outside of a lab / experimental setting, we just can’t get perfect data. And that’s ok. What matters is that whatever measures you use are (1) defensible, (2) consistent, and (3) transparent. 

Tip: Keep it simple! The clearer your value generation story and pathway, the easier it is to keep it defensible, consistent and transparent. The more nuance you add, the more tricky it becomes, and that can often work against you (consider context, stakeholder, use, etc).

What are some ways to start measuring value? 

Work with a customer

Your first customers are often your best sources of data. In a best case scenario you have a customer who’s already thought through value measurement and is willing to share all their data with you. But usually that’s not the case. So where can you start with your first few customers?

• Observe. Shadow their work and understand their stories. Ask questions that hone in on numbers: How much? How often? How many? 

• Present the customer with back-of-envelope math for them to respond to. Many customers, when given a framework, are happy to correct, fill in, and fine-tune. It’s easier for them to tell you what you got wrong than to start from scratch. 

• Work on a white paper together. Bring in your team to work with theirs. Together tease out the frameworks,impact and how to tell the story through numbers. 

• Don’t start with ROI. Normally this is where we all go first, but ROI requires having a really clear picture of how users quantify the investment, and also often having ROI benchmarks you’re required to hit. It’s quite possible you’ll have to measure this customer-by-customer, but start with what you can control first: measuring the return, or value generation. 

• Note that it’s also ok to rely on quotes and stories to start. Until you have the numbers, any proof points are better than nothing. And even once you have the numbers, stories still resonate in their own unique way. 

Do your own research across customers

Showing impact within one customer can be great, but what if you need broader impact? 

• Measure what you can in the product. The more data you pull in and track, the more you’ll be able to start estimating at least part of the value pathway. Tell the story confidently (e.g. If you have 18 videos on Loom, they’ll tell you: “congratulations, you’ve saved 18 meetings!” We know that’s not exactly true, but it’s consistent, defensible, and transparent, so it works).

• Conduct your own surveys. Craft the questions to focus on outcomes, and do all you can to drive completion: offer incentives, tell customers the survey’s coming and ask them for help completing it, ask the questions on a live call. 

• Extrapolate learnings from one customer across your base. If you have X impact at one customer, what might that look like across other customers? What would have to be true, and can you realistically claim some percentage of that? 

Incorporate external research & benchmarks

Sometimes you can take shortcuts by using existing industry benchmarks or external research. You don’t have to measure everything yourself. 

• Are there benchmarks around the problem you’re addressing? Can you extrapolate some percentage of improvement on top of that? That’s already great. 

• Now, can you link that improvement to outcomes? Maybe the benchmark already has some estimated, and you can extend that estimate? 

• In education and other social sciences, there is often research on the impact of certain variables on specific outcomes. If you can show your product impacts those variables, you can rely on existing research to make the link to outcomes. 

Value is the whole company’s responsibility 

Aligning around value is about more than retention or upsell, and it requires input and perspective from more than just the sales or customer-facing teams. It’s about making a real case for why your work matters—and helping your customers do the same. Every department in the company will likely have a slightly different lens and input, and it’s important to bring those perspectives together to form a unified perspective. 

Defining customer value clearly:

• Strengthens your positioning in the market

• Guides product prioritization

• Equips CS teams to deepen relationships

• And ultimately, supports sustainable, impact-aligned growth

When everyone inside your company understands how your product creates value for buyers and users, it becomes easier to build alignment, make tradeoffs, and deliver results that last.

And it doesn’t have to be scary. In summary – 

• Start somewhere, and iterate until you get it “right” (and then keep iterating, because the value will evolve with the product and market)

• Estimate when you need to, as long as it’s consistent, defendable, and transparent

• Don’t be afraid to rely on external benchmarks and research.

For further reading, why not explore the customer success collection and the impact collection?