What does it cost to use your Product?

A deep dive into understanding the real cost of using a digital product

¹It was a late afternoon when I received a call from a founder friend. Their product is a sleek, well-designed app had launched to great fanfare but was struggling to retain users. “We’ve got the best price in the market,” the founder said. “We even introduced promotional offers after the initial launch. But why are they still leaving

I paused for a moment before responding. “The problem might not be price,” I said. “Have you considered the real cost of using your product?”

A long silence followed. It was clear the founder hadn’t thought beyond the monetary cost. This isn’t uncommon. Many builders assume that price is the primary barrier, but for users, the cost is far more nuanced it’s an interplay of time, effort, trust, and emotional energy.

That call got me reflecting on the deeper layers of product cost and how understanding these layers can make or break a product.

What Does a Product Truly Cost?

For the end user, the cost of a product isn’t just what they pay in cash or digital currency. It’s a mix of multiple factors that influence their decision to engage, stay, or churn:

1. Monetary Cost: This is the obvious one the price tag. While important, it’s rarely the sole determinant of a product’s value. A product can be free but still “costly” in other ways.

2. Time Cost: Users weigh how long it takes to achieve the desired outcome. Complex sign-ups, slow loading times, or lengthy processes are hidden costs that frustrate users and drive them away.

3. Cognitive Cost: Every product interaction demands mental energy. Is the product intuitive, or does it require users to decode its functionality? If your product feels like a puzzle, users will abandon it.

4. Emotional Cost: Does the product evoke trust, or does it spark frustration and anxiety? Unclear messaging, inconsistent design, or a lack of reliability increase the emotional cost.

5. Opportunity Cost: Users constantly weigh the alternatives. If your product doesn’t deliver faster, easier, or better value, instead of adopting yours, they’ll maintain the status quo with what they currently have or if they are currently using yours, they will switch to one that does.

6. User Data Cost: The world is becoming more data-conscious and users are more aware of the price they pay with their personal information. Products that require excessive permissions or collect unnecessary data raise red flags. If users perceive the data cost as too high or invasive, they may reject the product outright, regardless of its other merits. Balancing data collection with transparency and necessity is critical to gaining user trust.

Effort vs. Reward: The Ultimate Equation

Nir Eyal, in his book Hooked, discusses a principle that resonated deeply with me: action (adoption) only happens when the reward outweighs the effort i.e. Reward > Effort = Adoption. The probability of a user acting whether signing up, purchasing, or returning can be simplified to this equation:

\(P_a = f\left(\frac{M}{E}\right) \cdot T \)

Here:

• Pa: Probability of action

• M: Motivation (the perceived reward)

• E: Effort (the difficulty in achieving the reward)

• T: Trigger (the prompt to act)

For users, it’s a subconscious calculation. If effort outweighs reward, they’re gone. If triggers are missing, even high reward won’t move them.

The African Context: A Story of Mobile Payments

Let me ground this in a real-life example. A few years ago, I worked with a fintech startup, trying to build a mobile payment solution. The concept seemed perfect on paper simple transactions, low fees, and widespread agent availability. Yet, adoption stalled.

We dug deeper and discovered that while the monetary cost was low, the Effort was staggering. Users were condemned to learning a lot of imported concepts and terminologies that is not localised to them. The process though seem simpler was totally alien to the customers, increasing cognitive cost. Additionally, being a new introduction to the market, users didn’t trust the app fully, raising emotional cost.

The culture of the people you are building for should inform how you present your product them

To address this, we simplified the app’s interface, introduced common terminologies they already resonate with, optimized for speed, and introduced an instant notification (SMS & Email confirmation) to build trust. Adoption skyrocketed. The product became easier to use, the perceived reward grew, and the effort-reward balance tipped in the product’s favor.

Connecting Costs to Value

As product builders, we often talk about delivering value. But value doesn’t exist in isolation it’s perceived in relation to the costs users endure. Here’s how the different costs tie into value risk:

1. Monetary Cost vs. Affordability: If users can’t justify the price with the value they receive, they churn. Pricing must reflect the problem your product solves.

2. Time Cost vs. Speed: Faster products win. If your solution takes too long, users will move to alternatives.

3. Cognitive Cost vs. Simplicity: Simplify. Users shouldn’t need a manual to navigate your product. The less thinking required, the better.

4. Emotional Cost vs. Trust: Building trust is non-negotiable. Every touchpoint should reduce anxiety and inspire confidence.

5. Opportunity Cost vs. Differentiation: If your product doesn’t stand out, users will choose what feels more rewarding.

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First Principles Thinking: Solving the Root Problem

When I think back to that fintech project, I realize how much first principles thinking played a role. Instead of patching superficial issues, we stripped the problem down to its basics:

• Why are users hesitant? (Distrust, complexity.)

• What barriers can we remove? (Streamlined UI, faster processing.)

• What motivates users? (Convenience, assurance.)

When we focused on the fundamentals, we created a product that aligned costs with perceived value. The result? A solution that felt effortless.

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Build Products That Feel Worthwhile

The real cost of a product isn’t just in Naira, Shillings, Cedis or Rands. It’s in how much effort, time, and trust users invest to achieve their goals. As builders, our job is to minimize these hidden costs while maximizing the reward.

Great products aren’t just affordable; they’re intuitive, fast, and emotionally reassuring. They solve problems without creating new ones. And most importantly, they respect the user’s time, energy, and trust.

So, next time you think about what your product “costs,” look beyond the price tag. Ask yourself: is it truly worth the user’s investment? Because when the answer is yes, that’s when your product becomes invaluable.

It’s time we build with clarity, Let’s deliver solutions that are as rewarding as they are effortless.

1. the voiceover is generated using NotebookLM