Time To Value (TTV)Link to this section
As a SaaS company, you’ll already be aware that the time from initial subscription to realizing the full value of your product isn’t always a straightforward journey.
One metric that is often overlooked but can be helpful in understanding your customer experience is Time To Value (TTV).
By monitoring TTV, companies can more effectively track and optimize their customer experience, ensuring that customers see value as quickly and efficiently as possible.
Defining time to valueLink to this section
TTV is a useful measure of how long it takes for a newly acquired user to experience or achieve the value provided by your product or service. TTV is measured from the initial action (such as signing up) until the moment they gain value from using the service.
This metric can be the difference between retaining customers or losing them to competitors. The sooner you can deliver on your promise of value to your customer, the more likely they are to remain an active subscriber.
This is especially important during the onboarding period when customers are more likely to churn.
A shorter TTV can result in loyal long-term users, while a longer TTV could indicate issues such as high churn rates, inefficient onboarding, or poor user experience.
5 types of time to valueLink to this section
TTV can vary widely depending on factors such as the industry, the customer’s specific needs, and the services offered.
There are different types of TTV metrics to explore before determining which one, or often which combination, should be tracked. Let’s take a look at the 5 TTV types:
- Time to basic value
This refers to the amount of time it takes for customers to realize either the assumed or lowest amount of value.
This can happen before a customer even purchases the service, for example, if they are on a free trial or using a sample service.
- Time to exceed value
This metric represents the time it takes for customers to discover the deepest value. Here, the service exceeds the expectations the user first had when signing up.
This may sometimes come when a user moves from a basic to a more advanced subscription or signs up for upgraded features.
- Immediate time to value
This metric offers an immediate benefit to the customer, showing an instant return on their investment. As soon as the user signs up for the platform, value has been achieved.
For example, signing up for a cloud-based storage subscription that allows users to transfer data upon signing up would be considered immediate time to value.
- Short time to value
This metric measures how quickly customers can adopt and appreciate a new product.
Value may not be realized immediately, but customers can use the platform soon after subscribing.
Short time to value will generally occur when a service requires little user onboarding.
- Long time to value
This metric measures the overall cycle time it takes for customers to receive value from a product or service, especially if it requires a long user onboarding and training process.
In cases of SaaS, this can be more common as these services may take some time to integrate with existing systems and data.
Calculating TTVLink to this section
To measure time to value, the meaning of value must first be identified.
This definition will be based on what customers perceive as valuable, which requires understanding their objectives and how your service can help the user achieve them.
To ensure the final product provides the desired value, organizations need to map their value stream throughout the development process.
There are several strategies for measuring time to value, and the most effective ones depend on the specific software offered, customer needs, and the business model.
One effective strategy is measuring the time it takes for customers to upgrade from a free to a paid version, which indicates genuine value.
Another approach is measuring customer onboarding time to reduce unnecessary downtime and delays.
Measuring the time it takes for customers to adopt new features can also help identify potential obstacles, and tracking the time it takes for customers to achieve the desired return on investment can provide valuable insight.
Why is time to value an important metric?Link to this section
To maximize customer lifetime value, SaaS companies need to focus on optimizing their TTV.
A short TTV means that new subscribers are quickly experiencing value and building habits with your product. This leads to greater trust and increased satisfaction, which ultimately drives higher customer lifetime value.
A long TTV can lead to customer dissatisfaction and higher churn rates. If value isn’t felt quickly by the user, they’re more likely to turn to your competitors for faster, more effective solutions.
By prioritizing a short TTV, SaaS companies can boost retention and bolster their reputation of delivering effective solutions in a timely manner.
This increases the likelihood that customers will choose to remain on your platform, with the potential to drive higher customer lifetime value.
How to reduce time to value?Link to this section
Reducing time to value can help you beat churn and increase customer satisfaction, leading to higher revenue and growth opportunities.
Here are a few practical ways to reduce time to value:
- Focus on the core features: determine which features provide the most value to your customers and focus on delivering these features first.
- Streamline the onboarding process: ensure the onboarding process is easy to understand. Provide clear instructions and guides for customers to reduce TTV.
- Provide proactive support: meaningful support can be provided by reaching out to customers to offer guidance and easy-to-access customer service.
- Optimize UX: make sure the most used features are easily accessible.
- Use automation: automate repetitive tasks and workflows, such as data entry or document processing. This can save customers time and increase the efficiency of your product, leading to faster value realization.
By understanding this metric and determining which type of TTV should be measured, you’ll be able to reduce TTV and help your users unlock the full potential of your product sooner.
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