Defining a product
How do you define what ‘a product’ is?
The short answer is: “a product is a means of facilitating a value exchange between a user and an organisation”.
The long answer is:
A product is a means of facilitating a value exchange. It takes organisational resources and makes them available to a user, typically in a way that aims to create a behaviour change for the user and return greater benefits to the organisation than it took to produce it.
So, a bag is a product. An organisation uses it’s resources, consisting of raw materials, knowledge, infrastructure & machinery, etc., to produce the (in this case physical) product. The organisation sells the bag for more than it cost to produce and distribute the bag. The customer buying the bag can use it to carry things, which is behaviour change the bag manufacturer and customer both want because it signals that the product is meeting a need.
A product is successful where the value exchange results in both parties getting something more valuable than it cost them. For the organisation this could be money (in the case of selling a bag) or it could be some other outcome such as brand exposure. For the user, they get to carry stuff around in a more convenient way, which they value over the money they paid for it. The important thing about value exchanges is that they are never like for like. The customer values being able to carry things more than they value some money, and the organisation values that money more than the time and resources it took to produce the bag.
We could also go into ‘potential value’, where the customer buys the bag but doesn’t use it, but the bag retains its value because the customer could use it but they haven’t, either for reasons outside the product’s influence or because the product didn’t meet their needs.
The same value exchange exists for digital products. You might be reading this in a browser that you use without having to pay money because the company providing it values the data they get from your usage more than the small amount of money they could charge. You get to read random things random people write on the internet, and the company gets the data you generate by doing so. That’s the value exchange.
A charity product is no different. It takes the charity’s resources (knowledge, website, hosting, etc.) outside of the organisation in a way that is useful to the user. The value return the charity is/should be looking for is in the social change using the product creates.
Where products and services differ is in the ‘means’ of exchanging value. A service is only exists and is of use at the time the user interacts with it, whereas a product exists and retains utility even when it isn’t being used. The best bus service in the world is of no use to you unless you’re using it, but owning the best car in the world is useful even if you aren’t driving it right now (because could sell it, for example), but both can achieve the same outcome for you of transporting you to the best beach in the world.
How I picture services and products interacting is almost like a service blueprint where the user experience happens over a length of time and is expressed horizontally, and the product is expressed vertically as the value chain of taking those organisational resources (CRM, API, website page, etc.) from within the organisation to outside where the value exchange can take place, which is shown as where the two (horizontal and vertical) intersect.
So, in deciding whether a user is interacting with a service, for example being on the phone with a knowledgeable advisor, or a product, for example reading the same information on a web page, we should think about which maximises the value for the user and the organisation. Both provide the same information but a phone service is likely to be more costly to the organisation because people have to be employed to work on it, but if the information would be applied in lots of complicated scenarios which aren’t easy to explain in text on a web page then the service is also likely to be more valuable to the organisation as more people will act on the information.
Products and services are successful where both the users and the organisation get more out of them than they put in.