In a prior post about Intrinsic / Extrinsic Product Value Dynamics, we looked at the basic differences between intrinsic and extrinsic values and consumer perceptions. Here, we’re going over some frameworks you can consider using to define and position your products along these dimensions. The idea is to make sure that everything from features to messaging align with intended values.
Please note that this framework is a suggested proposal; not something I’ve seen used or tested. It focuses on creating and expressing value deeper in product features and structures rather than surface level messaging. (Which is of course still critical.) There is no experimental data of which I’m aware that tests on varying such dimensions against each other. (Though in the Value Dynamics article, we did go over examples of successful and challenged products.) My goal is to offer a structure to explicitly consider these dimensions and use them as input to a larger scope product positioning strategy that would include the other usual elements of actual features, pricing, competition and so on.
Intrinsic vs. Extrinsic Value Framework for Digital Products
For every table or description below, there is a continuum of value from Intrinsic to Extrinsic. There’s likely no product or service that is 100% one vs. the other. The question is, “What is the balance for your product from your customers’ perspective?” What do you think it should be? Do you think your product would do better if you tried adjusting something? Keep in mind the balance may differ across dimensions and customer types, as well as time. People and their needs change. For example, a data analyst may use Excel or Python for their intrinsic capabilities; powerful data manipulation and analysis. Meanwhile, a business influencer may prefer Tableau or Power BI dashboards for their visually polished reports, even if the same insights could be generated in simpler formats.
Core Definitions
Before diving into a proposed framework, it’s useful to establish clear definitions for intrinsic and extrinsic product values. (We did this in a prior article, but for the sake of completeness, the following chart will summarize these issues.) These two dimensions shape how customers perceive, evaluate, and ultimately choose products. While intrinsic value is tied to the product’s inherent qualities and functionality, extrinsic value is influenced by external perceptions and social factors. Understanding these distinctions helps ensure that product development and messaging align with the intended value proposition.
| Category | Intrinsic Value (Product & Experience) | Extrinsic Value (Perception & Market Position) |
|---|---|---|
| Definition | Inherent qualities of a product or service that provide functional, emotional, or psychological benefits. Value inherent to the product itself | External factors that influence consumer perception, desirability, and status. Value derived from external factors |
| Key Values | Fulfills fundamental needs/desires Users value the product for what it is | Provides secondary benefits beyond core function Users value the product for what it enables |
| Key Factors | – Product quality & craftsmanship – Core functionality & performance – Customer experience (UX/UI) – Sustainability & ethical sourcing – Brand authenticity & purpose | – Brand image & reputation – Social proof & endorsements – Price perception (luxury vs. affordability) – Packaging & aesthetics – Advertising & storytelling |
| Consumer Motivation | Internal satisfaction, usability, reliability, emotional connection. Personal enjoyment, Curiosity, Mastery, Purpose, Autonomy, Enjoyment of Flow state, Creativity, Challenge, Satisfaction, Meaning, Altruism, Self-actualization, Interests, Competence, and Financial Rewards. | Social status, recognition, peer influence, aspirational appeal. Recognition, Status, Grades/Scores, Competition, Social pressure, Rewards, Punishment avoidance, Compliance, Approval, External validation (via visibly financial success, publicity or other means) |
| Customer Statement | “I want this because of what it does” | “I want this because of what it gets me” |
Imbued Product Values Framework
Every product carries a mix of intrinsic and extrinsic values, whether intentionally designed or not. This framework helps clarify how a product’s purpose, design, and user experience shape its perceived value. You can consciously balance these dimensions to try to best align your offerings with customer expectations and market positioning.
| Dimension | Intrinsic Value Approach | Extrinsic Value Approach |
|---|---|---|
| Core Purpose | Solve a fundamental problem | Enable access to other benefits |
| Design Focus | Functionality and usability | Status symbols and shareability |
| Feature Priority | Core utility features | Integration with other value systems |
| Innovation Strategy | Improve primary function | Expand connections to external benefits |
| User Experience | Seamless, intuitive interaction | Highlight achievement/benefits gained |
Marketing Framework
The marketing framework perspective outlines how intrinsic and extrinsic values influence messaging, emotional appeal, and call-to-action strategies. A well-balanced approach ensures that both functional benefits and aspirational drivers resonate with the target audience.
| Element | Intrinsic Value Messaging | Extrinsic Value Messaging |
|---|---|---|
| Primary Appeal | “This makes your life better” | “This makes you look better” |
| Emotional Triggers | Relief, satisfaction, empowerment | Pride, belonging, admiration |
| Messaging Focus | How it works and what it does | What it enables you to achieve |
| Proof Points | Product demonstrations, feature lists | Testimonials, social proof, outcomes |
| Call to Action | “Experience the difference” | “Join others who benefit” |
Digital Product Examples
Different digital products emphasize intrinsic and extrinsic values to varying degrees. Some prioritize core functionality and user experience, while others lean on social status, recognition, or network effects. This table focuses on various digital products, but you can take the chart and adjust it for products in other categories.
| Product Type | Intrinsic Value Elements | Extrinsic Value Elements |
|---|---|---|
| Productivity App | Time-saving features, intuitive interface | social sharing, and similar to games, points, badges, leaderboards |
| Social Media | Content discovery, communication tools | Follower counts, verification badges, likes, shares |
| Digital Course | Quality of content, learning experience | Certification, career advancement |
| SaaS Platform | Core functionality, reliability | Integration ecosystem, industry recognition |
| Mobile Game | Gameplay mechanics, enjoyment | Competitive rankings, exclusive items, the traditional PBL, Points, Badges, Leaderboards |
Value Balancing Strategy
The following is also a thought experiment; not anything proven. I’m throwing this out there for consideration, comment / critique. The idea seemed to flow naturally from the earlier study in the intrinsic vs. extrinsic area based on the following question coming to mind: “OK, this all seems to make sense. Does it change over time? If so, how so?”
This Value Balancing Strategy framework presents a conceptual approach to thinking about the intrinsic vs. extrinsic value balance throughout a product’s lifecycle.
The values below are for example only. You have to set them yourself for your own product or service based on your beliefs or research. (Of course, you’d also have to execute specific programs based on your belief set. That might be challenging as it’s not as if there’s some magic dial you adjust to get to the desired levels suggested below. Think of this more as directional or general aspiration as opposed to precise targets.)
| Development Stage | Intrinsic Value Focus | Extrinsic Value Focus |
|---|---|---|
| Initial Launch | 70-80% (establish core value) | 20-30% (seed future benefits) |
| Growth Phase | 50-60% (maintain quality) | 40-50% (expand external benefits) |
| Maturity Phase | 40-50% (incremental improvements) | 50-60% (strengthen ecosystem) |
| Reinvention Phase | 60-70% (renew core purpose) | 30-40% (refresh external connections) |
While my suggestion here lacks empirical backing, it provides a framework for intentional value allocation as a product evolves. The model attempts to incorporate lifecycle dynamics, and acknowledges that a product’s value perception evolves over time and that the balance between intrinsic (functional) and extrinsic (status-driven or ecosystem) value may shift accordingly.
There are probably exceptions to the guidelines above. And actually, these exceptions may help prove out the validity of the suggestions in more typical cases. Consider that some products (e.g., social networks, luxury digital goods, community-driven platforms) rely heavily on extrinsic value from day one. (Examples: Some crypto tokens and NFTs, or a learning platform like MasterClass that relies on name brand instructors.) Their success is tied to network effects, prestige, or perception. Others (e.g., deep tech SaaS, developer tools) may need intrinsic value dominance longer before shifting toward extrinsic elements. (Examples: Slack, Zoom. Figma were clearly highly functional before they developed some aspects of emotional connection.)
Again, this is a conceptual model proposed to serve as a useful thought experiment for product managers and strategists. While it doesn’t have empirical backing, it provides a framework for intentional value allocation as a product evolves.
Implementation Checklist
If you decide to try to use these ideas, here’s a suggested checklist:
- Identify core intrinsic value propositions.
- Identify probably extrinsic value propositions.
- Map potential intrinsic / extrinsic value connections.
- Determine optimal intrinsic / extrinsic balance for your product stage.
- Align product roadmap to support both value dimensions.
- Craft marketing messages that address both value types.
- Create metrics to measure both intrinsic and extrinsic value delivery.
- Listen to the market.
The listening is key. Unintended consequences might be for good or ill. Apple had no idea AirTags would quickly be deployed for illegally stalking. Airbnb wasn’t looking to deal with unregulated party houses, Twitter was supposed to be a social platform more than a business or political news site, and so on. Sometimes, you may want to morph your business to serve customers based on the value you’ve accidentally stumbled upon. Otherwise, you may want adjust something, or perhaps spin off that part of your business and get back to what you were doing. Regardless, you have to be paying attention to know what’s going on.
Conclusion
Understanding the balance between intrinsic and extrinsic values is key to building and positioning successful products. If you don’t, it’ll just happen by accident and you’ll be depending more on luck than skill. No product is entirely one or the other, and the best mix evolves over time based on customer needs, market trends, and business goals. By consciously defining and aligning these values across product development, marketing, and user experience, you can create offerings that are both functional and desirable. And if you’re smart and lucky, create a narrative that can promote your offerings as you intend and in a valuable way. The main point is to at least try to be intentional towards your goals in these areas. Because one way or another, customer perceptions will form. Ideally in your favor.