Time to Value: Says Who?

We all want a straight answer.

Did we get the job? Is the stew tender enough? Is Cousin Clotilde coming to stay for a month this summer or not? (Please say not.)

Unfortunately, sometimes there’s not enough clarity to be had. The selection committee continues to dangle the position. The stew is good, but, like, not that good? Clotilde will do what Clotilde darn well pleases until the last minute.

… and time to value simply isn’t a yes-or-no proposition.

That’s right; this post is not actually about family dynamics but rather one of the most critical topics in the business world. Doubly true of the SaaS (software as a service) customer journey because how quickly customer success occurs matters significantly to customer retention.

In fact, time to value is one of the most important ways to measure the value of your product … both to the customer, who will either keep paying for it or churn right on outta there, and to you, who will or will not see that subscription money. Since that money makes the world go round (or at least, your world), there’s no better metric to learn about today than time to value (TTV).

As we said, though, it’s a bit of a dicey topic. Optimizing value takes a lot of foresight and planning, says Forrester, and we often lie to ourselves about whether we’re getting the job done.

Even when we don’t, TTV is hard to measure. If you want to avoid churn and raise the customer lifetime value of your SaaS product, though, you have little choice but to face it head-on.

Luckily, we’re here to take a deep dive. We’ll discuss what time to value is, why it matters so much to customer churn, which metrics you can use to measure it, and how to get started today.

Without further ado …

What is Time to Value (TTV)?

According to Baremetrics, TTV “is the time it takes a new customer to realize value from your product. Over time, you want to decrease TTV so new customers find value faster.”

Longer TTV means more churn because you give them more time to get frustrated and leave before they hit that success sweet spot. A shorter TTV means customers realize their goals more quickly. The relief of your solving their problem encourages them to stick around to continue meeting their needs and see what else you can do for them.

As such, your goal is to convince your customers of your product's intrinsic, fundamental value in as short a timeframe as possible. This requires an understanding of the different types of time to value.

Time to Value Types

Among the most common types of time to value are:

• Time to basic value: How long does it take for your user to see your most foundational services? This is the time it takes to solve their most fundamental problem with your most essential features.

• Time to exceeded value: This is when a customer will discover that your product can do even more for them than they thought. Like time to basic value, the shorter, the better.

• Time to immediate value: How long does it take the customer to see a return on investment? TTIV is reached when the customer can say, “this SaaS product pays for itself in solving my problem, according to X metric.”

• Short and long time to value: Some products reveal their value immediately, with little to no startup time and short onboarding periods. Others take longer, with more complex onboarding or migrations. A long time to value is okay but not ideal.

Your product will have a unique expected timeframe for each TTV type. It’s okay if it’s longer than a competitor’s, provided you have a good reason, and the customer feels cared for during that time.

However, the same rule applies to any product: the shorter, the better. Long time to value does pose the risk of a competitor doing the same thing faster, so you need to be prepared for higher churn levels no matter how good you are.

AHA! Moments

Finally, Userpilot points out an important distinction between TTV and AHA! moments: “AHA! moments are feelings or ideas that occur when users realize how the product can help them. At the same time, TTV measures the duration it takes the customer to actually experience the value of your product.”

While AHA! moments are great for your subscription revenue and your brand, they’re not the same as convincing a user your product has long-term worth for them. For that, you’ll need a string of AHA! moments that make them want to stick around … ideally forever.

Why is Time to Value Particularly Important for B2B SaaS Companies?

Time to value: why should you care? Quite simply, your number of subscriptions and your revenue are intrinsically linked to this metric.

“Once you’ve convinced your customer to purchase or sign up for a free trial, you have a limited amount of time to show value before they churn,” says Baremetrics. “No one wants to spend a lot of time or effort setting up and learning a product that might not even do what it says on the can.”

If they don’t have reason to believe they’ll reach the benefits of your product – followed quickly by proof of its worth – customers will lose faith in you and your product.

Bum bum buuummmmm … churn.

How Time to Value Effects Churn

It’s like rats in a maze: you want to get your customer from the Big Scary Entrance to the Nice Orange Cheese as quickly as possible. Frustrated rats that can’t find the cheese simply return to the entrance and bail.

Not that, you know, people are rats. (We couldn’t possibly hope to be that cute.) The truth is that your customer has abundant options on the market today. Only a good user experience can keep them from turning to your competitors.

SaaS companies have only one option to reduce their customer churn rate: continuously providing value from the beginning.

One way a SaaS business can do this is to map out the customer journey. Where do they want to go? How long will they wait to get there? What steps will they take along the way?

Knowing the answers to these questions will help you hold their hand through the uncertain beginning stages, so customer success managers must know them. Whether the goal is cheese or a great email marketing solution, your goal is to shorten the route and de-maze the maze wherever possible.

The straighter the shot, the less churn you’ll see. And that means:

• Higher retention rate and profits: “Only a 5% increase in customer retention can increase company revenue by 25-95%,” says Hubspot. If that’s not worth going after, we don’t know what is.
• More chances for cross-selling and upselling: Shorter TTV gives you more time to promote your product’s features and take a product-led rather than a promise-led approach. If you get people to the sweet spot faster, they’ll listen when you tell them what else you can do.

Important Metrics Customer Success Teams Use to Measure Time to Value

One of the reasons it’s so hard to measure customer experience and time to value is that you can use many different but equally essential metrics. You can use any of the below as your crucial metric:

• Higher retention rates

• Increased revenue and profits

• Decreased expenses

• Greater usability

• Higher customer satisfaction ratings

• Increased customer acquisition

Better yet, use all of them together. Yes, they’re all rather indirect, but that’s the nature of the beast. The critical thing to realize is that each of these metrics tells you that your customers have an easier time learning and using your product, which means your TTV is seeing improvement.

How to Decrease Time to Value

We can draw a few basic conclusions about reducing time to value using any of the above TTV metrics, and especially all of them together. These include:

• Offer lots of integrations. This will help you achieve a short time to value because customers can quickly adopt your product without losing the benefits of the others they use.
• Prioritize quick activation: Make onboarding, migration, and customer relationship management Priority Number One. That will help your customer get more success the first time they use it and smooth the early stage of the customer lifecycle.
• Offer lots of material: From use cases and case studies to modules and quizzes, giving your customers material into which they can dig their teeth will help them feel they’re progressing. Even progress is a form of value, so don’t assume a customer needs to solve all their problems before they decide they like you.

How to Use the Customer Onboarding Process to Improve Time to Value

Onboarding is a critical component of customer lifecycle marketing because it treats your user like someone who matters before and after the sale.

Too many companies focus on getting new users in the door, then abandon them to their fates after a halfhearted customer onboarding process. The result: customer satisfaction plummets, your immediate time to onboarding sputters, and your total product adoption decreases.

The solution is for your company to prioritize user onboarding during the marketing, sales, and support phases.

Before the Sale

Before the sale, most companies are focused on conversion rates. They offer tutorials, discuss new features, maybe offer a few demos of workflows, and hype their pricing. They make big promises to meet customer expectations.

Then they get them in the door, grab that credit card, and turn them loose. A job well done! *dusts hands*

… except not really. The mistake here is a misapprehension of one simple fact:

Your job is not done because each new month is a new conversion in a subscription model. You'll have lost the sale if you can’t convince your customer that your product is worth it when each billing cycle renews.

After the Sale

Let’s assume that the phrase “after the sale” means both after you convince someone to come on board and renew every time they renew. You must offer the same level of customer support then as at any other time.

Therefore, your customer success team must focus on more than teaching basic in-app features. They must also train people on new features, alert them to upcoming changes, guide them through upselling and cross-sell, and encourage their loyalty at every turn.

If we can impart one message to any SaaS company, it's that customer onboarding should never end. Only by maintaining a customer-first approach at every stage can you turn customers into stark raving fans.

Raven360 Is Here to Slash Your TTV … and Boost Your Profits!

Ready to slash your TTV and boost your profits at the same time? Raven360 is prepared to help, so come say hi today!