ARPU, CCR, NPS, TTV, CLV…if you’re a tech start-up, you can easily get lost in customer success lingo!
[Translation: Customer Health Score, Customer Churn Rate, Net Promoter Score, Time to Value, Customer Lifetime Value]
They’re all essential KPIs for today’s software development solutions and services that are mostly customer-centric. And based on the “happy customers=happy business” motto, companies focus on constantly improving their products in a way that adds increased value to their users. This is where the Time to Value metric plays an important role.
Here’s exactly what Time to Value stands for and simple tips on how you can measure and improve it to speed up product adoption.
What Is Time to Value?
In simple words, Time to Value is the amount of time it takes for your new customers to get value from your product or service after they start using it (also known as the Aha! moment). What does “value” mean for a customer exactly?
Let’s say users search online for a fast no-code tool, and they find your product’s website. They subscribe for a free trial of the no-code tool, and the entire process of uploading a project and automatically generating code is fast, smooth, and self-explanatory. They get exactly what they need in a matter of minutes; that translates into value for the customer.
Making everything as simple and fast as possible for your target audience is the key to achieving Time to Value and what makes you win over your competitors.
It’s often an underlooked metric but extremely valuable for customer success, especially in SaaS businesses that aim to decrease churn in people signing up for their product.
There Are More Types of Time to Value
Time to Value can have many faces and even be divided into several types, like:
Time to Basic Value
This is like a gut feeling, when the user starts to see the value of your product, even if he/she has nearly started using it. Let’s say users have downloaded an app, quickly browsed through all the features (which seem promising) and instinctively feel it’s the right app for them. The lower this Time to Basic Value is, the higher chances for the customers to engage with the app and get to know its real value.
In some cases, the value they’re looking for needs a bit of work on their side, so many SaaS products actually prioritize offering any kind of value to grow the relationship, and prove users they made the right choice.
Immediate or Short Time to Value
As you can guess, this value comes right after you started to use or downloaded a product. whatismyipaddress.com can be a simple example or a wellness app that can track your heart rate in less than 10 seconds.
Time to Exceed Value
This is the classic situation when users have the first encounter with your product through a free trial and realize your product offers what they need and more, exceeding their expectations. Let’s imagine a content tool that automatically suggests images that would fit for each section of the content. Many content marketers would quickly sign up for a paid version of this product.
Long Time to Value
In theory, you’d think this doesn’t sound right. And you’re not wrong. Who would want to spend a long time before they know if a certain product delivers the value they’re looking for? Probably no one, but in some cases, there’s no alternative. For instance, some complex SaaS services require days, weeks, or even months of onboarding, maybe for integrating databases or different systems.
To reduce friction and users’ frustration, a solution, in this case, would be to integrate an in-app onboarding guide and walk users through the process to make it extremely easy for them to know what they need to do at each step.
How Do You Measure Time to Value
Step 1 – Define what value means for your customer
You and your team should clearly define what your customers perceive as value. It’s not the same for every company, but to give a few examples, this value can be:
- Time it takes users to upgrade from free to paid
Let’s take the Dropbox model as a clear example. These 3 steps are a clear indicator that someone will sign up for a paid plan:
1. user creates a folder
2. user adds files to that folder
3. user shares the folder
- Onboarding time
Check out how jenni.ai writing tool figured out how to simplify the onboarding flow from 5 to only 2 steps:
- Time it takes users to adopt new features
You can use an analytics tool to calculate the average, minimum, and maximum time it takes newcomers to first interact with a newly added feature.
Additionally, you can make comparisons to see which features have the highest traction; it provides an initial evaluation of potential unnecessary or invaluable features. People at Pendo use this approach:
Source: Pendo.io., The 10 KPIs every product leader needs to know
- Time it takes users to gain their desired ROI
This might seem vague, or customers can have a hard time calculating ROI for a product and how it helps their business. To give an example, think of a business intelligence tool that helps customers improve business operations. This ultimately leads to customers’ increased investment income as a result of the tool.
Pro tip: Even if you have already established your target audience, it’s still divided into a few different customer segments with different needs. So, take all customer segments into account when identifying and defining value needs.
Step 2 – Develop a detailed value plan
Once you have identified what brings value to your users, you need to figure out how to introduce those value moments, each one at a time, not all of them at once. Ideally, you should make a prioritized development plan based on which values would have a greater impact on retention.
This is where user research or A/B tests can play an important role. Keep track and analyze what proves to deliver value and even product adoption to the target audience in a set amount of time.
Pro tip: make sure you align all team members or company departments on this value plan. Everyone needs to be on the same page to ensure you deliver customers the value they expect in a timely manner.
Step 3 – Analyze how engaged your users are
Apart from the value you deliver to your users, it’s equally important to find out if or how engaged they are with your solution. You can evaluate the engagement level by looking at elements like:
- if they leave reviews or share the product
- if they use integrations
- if they go through tutorials, video courses, or other educational content
You can measure how much time they spend on these kinds of actions.
Pro tip: brainstorm to get new ideas on how you can improve your customers’ experience even more. Try to offer them what you believe they’d want before they ask it from you. It could be a simple functionality like the option to turn assets into a PDF.
Step 4 – Connect engagement actions with customer retention
Take the measurements from step 3 and see how they impact customer retention. Or in other words, a low churn rate should always translate into a high retention rate.
For instance, if you use a referral program, you might notice that users who’ve recommended or added friends and family to an app will tend to stay with you longer. The same can go for users who go through the entire onboarding program as opposed to the ones who don’t.
Pro tip: if you really want to skyrocket retention and referral rates through engagement, try making all “winnable” moments within the product sharable. Did your users complete a project? Give them a congratulations page they can share. Gamify the product through built-in achievements and rewards. Let the public see how your clients are winning!
If you’ve read this far (which I honestly hope you did), you might think TTV only applies to B2C. Yet, it can very well apply to business-to-business models.
Time to Value metric is equally available for B2B services as it is for B2C. In our case, with delivering product marketing services, we go through a 3-steps process: calibration, experimentation, and growth. In the beginning, we set the calibration period at two months, but we noticed this time frame was too long for a client to realize exactly what we can deliver. So, we decided to separate the first stage of calibration into two parts, and provide a first assessment within three weeks. Additionally, since it could take a long time to see any results from content marketing, we develop our strategies in a way so we don’t jeopardize the long-term results. We apply several optimizations and tactics, so after three months our clients can see results or achieve quick wins and experiment with our approach – this is usually a very strong point in keeping our clients.Gabriela Amarie, Marketing Manager, Softbinator Technologies
Tips to Improve Time To Value
By the time they make their 3rd click while interacting with your product, customers need to know that you’re solving their problem. For B2B products, users need to convince their managers that your product is worth the investment to simplify company employees’ work.
Here are some tips on how to achieve that:
Based on Your Type of Product
- If your product offers a self-serve experience, like a self-order service for restaurants, simply keep the initial product experience as fast, simple, and self-explanatory as possible.
- For products that imply customer touch points (any user interaction directly linked with your product, like Apple ads, website visits, and ones that cover direct interaction or communication with company representatives, like customer support), the key way to improve TTV is to focus on customer success first, and then on sales.
- For products where value for the user comes after they invest some time using your product (e.g., API developer tools or infrastructure software where the Aha! moment comes later – as explained in ‘Long Time to Value’ in the ‘Type of Time to Value’ section), have insightful and exhaustive documentation and integrate tools to ease the overall process of interacting with your product.
Here’s how Custify, a customer success software for SaaS increased TTV with their product:
One of the key parts of our strategy and one that’s been of immense help in optimizing our TTV is “concierge onboarding”. Every new customer that comes to us is treated like a first-class guest, we book a call, go through their concerns, their issues, their goals with their product, and their goals with our product. This white-glove treatment continues throughout the onboarding process and smoothly transitions into our customer success flow. Concierge onboarding is the essential first step in getting the customer to achieve his goals and realize the value Custify provides.Philipp Wolf, Founder and CEO, Custify
1. Don’t cover too many features in a short amount of time
To keep the onboarding stage as simple as possible, include only a few features in a short time span. Otherwise, customers will feel confused and overwhelmed.
For instance, implement product tours to train and onboard users, so they can quickly discover relevant features.
2. Use A/B testing to test different onboarding strategies
Try out different onboarding tactics and ask customers to give feedback on which is more useful and relevant for their use case. You can even use them as a guiding point, so you can later apply customized onboarding based on user type.
3. Take into account different customers
Customer training and education is an essential element of customer success. You need to train them on what they need to know to leverage your product or service.
As mentioned above, people are different, and they learn in different ways. Ensure you provide different types of content to ensure a better understanding across the entire customer base. Some people prefer how-to tutorials in the form of videos, while others would rather read a step-by-step blog article.
More insights on how customer training improves or accelerates product adoption:
Providing materials to educate your customer base is crucial to the success of your product. So imagine you have the best product in the world in terms of value. If nobody understands how to achieve that value or if the process takes 10 times more than your competition, you won’t get anywhere. Customer training is essential, but doing it efficiently and effectively depends on a lot of factors – from the time you allocate per customer to the materials you use through each lifecycle step. Getting it right is a continuous struggle and it’s also one of the best ways to maximize TTV.Victor Antiu, Marketing Manager, Custify
Time to Value depends on what your specific product or service promises to deliver and your business model. Dive deep to find out not what type of value you can offer, but what value means for your customers and do your best to offer it to them.
Once you figure that out, focus your efforts on providing value quickly, so your customers won’t leave and look for alternatives.
Curate irrelevant onboarding, train your customers, and you’ll speed up time to value and product adoption.