In a time where customers are inundated with options, providing value is crucial to your success. And providing value in the quickest time possible is key.
Understanding time to value (TTV), how to track it, measure it, and reduce it, is a highly effective way to beat churn and attract more customers to your business. In this post, we'll show you how to do just that.
What is time to value?
Time to value, or TTV, is a critical metric that measures the amount of time it takes your new customers to get value from your product or service. New users expect to receive the value they have paid for in a timely manner—the quicker the better. TTV is one of the most overlooked metrics, particularly in SaaS, but it could be the difference between you and your competitors. And if your business fails to deliver value, you could quickly find your customers leaving you for those competitors.
Why is TTV a key metric for your SaaS product?
When it comes to SaaS companies, customers have very little tolerance for delays. When they purchase a new product or package for the first time, they expect it to work for them, and they expect to benefit from its usability quickly. A short TTV will allow customers to get a return on investment faster, which increases the likelihood that they will choose to stick with your business. On the other hand, a long TTV can result in customers looking for other solutions or quickly falling away from your business.
You want your business to have a strong reputation for delivering the solutions your customers need in a timely manner. If you develop a reputation for a long TTV, customers will often choose to turn to your competitors, rather than your business, for those critical solutions.
5 types of time to value
Time to value comes in several different forms. Understanding each type of time to value can allow you to evaluate what your software has to offer and how you can transform it to deliver a better overall customer experience.
1. Time to basic value
Time to basic value defines the time it takes for customers to see the lowest amount of value from your product: the basic services that your software might offer, for example. It doesn't incorporate the larger-scale value that your solution can offer for your customers, but it does include the basic services your customers are paying for.
Suppose, for example, that you offer a new business communication solution. The time to basic value might include the time it takes for your customers to start using the platform, but may not incorporate deeper options like document storage and file sharing, which your platform might help streamline.
2. Time to exceed value
The time to exceed value is the time it takes for customers to reach a deeper level of value with your product: the moment at which they discover benefits they may not even have initially realized that your product offered. For example, a new communication platform not only makes it easier for employees to connect with one another, it may also streamline communication between departments or improve company culture in unexpected ways. How long does it take for customers to realize these increased values as they pertain to your product?
3. Immediate time to value
A product that has immediate time to value shows an immediate return on the customer's investment. As soon as the customer starts using the product, it starts showing the benefits promised by your value proposition. For example, if you offer a cloud document storage solution, it may immediately offer the benefit of allowing customers to transfer data to the cloud and collaborate more easily from a distance—a benefit that many businesses needed to take advantage of quickly in the midst of the COVID-19 pandemic, when many employees needed to make the shift to working from home immediately.
4. Short time to value
A product has a short time to value when customers quickly recognize the value of a product. It may not happen immediately, but customers can quickly start using the platform, with relatively little user onboarding.
5. Long time to value
Some products are expected to have a long time to value, especially if they require a long user onboarding and training process, or rely on a complicated transfer from the customer's existing systems to a new type of software or platform. A long time to value, however, can result in a great deal of customer frustration and struggle.
How to measure time to value
There are several strategies you can use to measure time to value. The most effective ones for your business will depend on the specific software you're offering and the needs of your customers, as well as your specific business model.
Measure the time to upgrade from free to paid
If you offer a free version of your software, prioritize measuring how long it takes for customers to upgrade to the paid version. At the point customers are willing to upgrade away from the free version of your product, they have seen that your product has genuine value—and they're willing to pay more to get the expanded version of those features and offers.
Measure customer onboarding time
Once customers decide to purchase your product, how long does it take to get them ready to use it across their organization? In many cases, new software requires an in-depth training process. The longer it takes to train employees, the less likely many companies will be to select that platform, since the training process will mean unnecessary downtime and delays across the organization. A quick onboarding process, which allows customers to use new software solutions faster, can help encourage them to turn to your solution.
Measure time of adoption for new features
How long does it take customers to start using new features once you roll them out? If you notice that customers are slow to pick up new features, it could indicate that those features aren't needed or that there are unnecessary obstacles standing in their way.
Measure the time to achieve the desired ROI
How long does it take for customers to achieve the desired return on their investment once they start using your product? In many cases, ROI is clearly measurable, whether you're looking at a marketing solution that will help customers actually increase their business, or the return on the investment is viewed in terms of how much use the product sees in the office environment.
Keep in mind that most of these measures are based on enterprise SaaS, rather than on custom solutions. If you provide custom solutions for customers based on their specific requirements and needs, you may need different measurements to determine whether your solution is performing according to their standards—and customer satisfaction may be the most effective measurement of whether you are providing the value they need in a timely manner.
6 ways to decrease TTV to beat churn
Being able to provide value in as a short amount of time as possible plays a big role in reducing churn. Below are six ways to help you decrease your time to value in order to beat churn and encourage customers to stick with your product.
1. Deliver value in phases
Do not feel as though you have to bring new clients completely onboard with your product all at once. Many software and app developers get caught up in trying to provide all the solutions at once, and as a result, clients quickly get overwhelmed. Instead, create a clear guide that will help roll out those solutions in phases to deliver a higher level of understanding of the platform before customers move forward to the next one.
2. Educate with onboarding guides and case studies
Provide new clients with the resources they need to use your solution effectively. Offer onboarding guides and detailed case studies that will help them learn how to make the most of your product's features, including the little details that customers might not find if they learn how to use the software entirely on their own.
3. Hire dedicated customer success managers
A customer success manager can connect directly with customers who have just chosen your product and answer their questions, guide them through the onboarding process, and address any problems or obstacles they may face. Providing this one-on-one help, or training, can significantly transform your clients' experience with your product and provide a much shorter TTV.
4. Offer excellent customer support
Customer support is critical with any software solution. You want your customers to know they can turn to you when they have a challenge, and you also want to make it easy for them to connect with customer support. Solid customer support can help move them past any obstacles so they can fully adopt your software solution, faster. They can help with any onboarding problems or address issues with new software patches as the customer uses the software over time.
5. Build in-app tutorials to improve adoption
In-app tutorials can make it simple for clients to access the information they need most about how to use the app effectively. Keep tutorials short, make them accessible within the app, and use them to walk clients through everything from basic use of your software to expert-level solutions.
6. Leverage customer analytics
Pay attention to how customers use your solution and what obstacles stand in the way as they move toward adopting your product. The better you know your customers, the better you can provide solutions that work for them.
Time to value FAQs
What are the five types of time to value?
The five types of time to value include:
- Time to basic value—the time to the specific value the customer assumed they would receive from your product
- Time to exceed value—the time it takes for customers to discover the deeper value of your product
- Immediate time to value—offers an immediate benefit to the customer
- Short time to value—customers can quickly adopt and appreciate a new product
- Long time to value–a longer overall cycle in order for customers to receive value from a product
How to deliver value to customers fast?
In order to deliver value to your customers as quickly as possible, focus on providing solutions that can help streamline adoption and make it easier for them to adapt to your product. You may, for example, want to offer tutorials and guides, provide onboarding assistance, or assign customer support personnel to help aid in customer adoption of your product.
What is the best strategy to reduce time to value?
When you need to reduce time to value, start by paying attention to your customer metrics. Often, those metrics will show you where potential delays may interfere with customer adoption of your platform. You should also focus on offering a high level of customer support, from tutorials and guides to excellent support representatives. Provide customers with all the tools they need to ultimately be successful while using your solution.
How does time to value affect customer lifetime value?
TTV can affect customer lifetime value. The longer it takes a customer to receive value from your product, the less likely that customer is to remain with your business long term. Often, customers who struggle to find value in your product will turn to your competitors in an effort to get a faster, more effective solution. On the other hand, when you focus on providing a short time to value for your products, you'll often find that customers are more likely to adopt and stick with those platforms.