It's safe to say that most customers expect to extract value from the products and services they purchase.
How long it takes customers to receive value from your business can vary depending on the service provided, but it’s important that clients perceive value as quickly as possible.
Time to value, or TTV, is a critical metric that measures the amount of time it takes new customers to extract value from a product or service. Different types of products and services yield different TTV metrics.
If a business purchases an instant messaging platform like Slack or Microsoft Teams, the primary implementation action to take is to upload a list of users, and the anticipated value milestone might be “each employee logs in and sends a DM”; because employees will already have a profile and are familiar with the essentials of messaging in other tools, the barrier to achieving that first value is very low.
By contrast, if a business purchases a subscription to a data analytics tool, information must be gathered from the current owners of existing data sources and connections to those systems must be established. Designing new dashboards and reports will take some time, too, resulting in a delay in perceived value. If customers feel confused after analyzing data, or several months pass before dashboards are accepted, satisfaction levels with the product and implementation process might be low.
Time to Value is essential for every business, but should be an area of unique focus for software makers who sell subscriptions.
A manufacturer of a physical product that is not accompanied by a subscription will collect revenue from the delivery of that product just once. The product will be priced at a value that immediately covers the cost of developing the product, and while the time to value can make or break the customer’s perception may inform their decision to use, discard or return the product, the sale is won.
Software as a Service companies rely on repeat sales over 18-36 months to counter their customer acquisition cost and turn a profit on a customer. Products are priced low to attract customers and repeat payments are essential.
Customer churn is a key performance indicator used to determine the percentage of customers who decide to stop using your product or service during a period. Customers who choose to leave the vendor become part of “churn” and impact a business’s cost management and growth. A longer than anticipated TTV puts customer satisfaction at risk and increases the likelihood the customer might not stick with the vendor for the full 18-36 months.
According to DecisionLink, a company’s Time to Value metric can successfully forecast a company’s future success. If one customer has difficulty seeing value quickly from your services, chances are others are having the same issue as well. Identifying patterns and resolving obstacles to TTV is a practical and repeatable solution to improve the number of customers who progress to further value milestones and reduce the overall risk of churn.
Tools like surveys, feedback, reviews, and customer service cases are excellent mechanisms for collecting information that can identify common obstacles.
Customer Lifetime Value (LTV) is defined as the total worth of a customer to a business over the entirety of their relationship. Improving LTV is important because it generally costs a company less money to keep loyal customers than to bring in new ones. Decreasing TTV directly increases customer lifetime value because customers who gain value quickly from a product are more likely to be satisfied and more likely to stick around and grow their value. Results can be measured in ways such as an increase in customer acquisition, customer satisfaction surveys, higher personalization of products, overall sales & revenues, decreased operational expenses, or general improvement of the customer experience.
Many businesses opt for measuring their TTV by a specific threshold or goal that a customer accomplishes. For example, Dropbox’s TTV metric is the first time customers add a file to their shared folder. Facebook’s metric is when a user connects with ten friends in the first week after signup.
Measuring basic value in this way can be effective because it directly shows that customers are completing objectives and receiving value by productively using the software. To pick the right value indicators, your business must uncover what “value” means to each key persona in a business that represents your ideal customer. From here, features critical to this first time value experience can be tracked with in-app tools like Kissmetrics or Pendo and evaluated through satisfaction surveys and interactions between your Implementation team and the customer.
Businesses need to make sure onboarding instructions are clear and everything is labeled appropriately; Customers are more likely to stop using a product if they have different customer expectations or are confused or frustrated. Effective customer onboarding is key to improving TTV. Video guides, in-product information, drip emails and online on-demand content are some of the most popular mechanisms. The goal of an effective onboarding program is to provide critical information on how to achieve value and avoid pitfalls along the way.
Businesses often use a more hands-on approach when the products are complex, building teams of Implementation and Customer Success professionals who help with the set-up process, offer customized training sessions, and build a long term relationship as the customer’s primary point of contact.
These teams create more trust and brand loyalty because a business is providing a smoother transition. But they often get bogged down with project management minutiae and lack of visibility into what customers are doing in the application and what they need to achieve the next milestone.
To create a streamlined path forward and efficient time to value, invest in a purpose-built onboarding platform like Hivewire and experts who can scale the system and save Onboarding and Customer Success team members time and energy.
Time to value is one of the most important indicators of how a business will grow. Simply put, customers want to extract value from the things they buy!
Time to value is central to Hivewire’s core offering. Hivewire will save you time and energy by mapping steps to success, integrating with CRM and delivering real-time insights into what comes next in the customer journey and where customers are getting stuck. Post-sales teams outline their strategies more effectively with Hivewire and craft seamless user experience to generate immediate value.