According to a study by Bain and Co, companies that increased their customer retention rate by just 5% saw their profits rise by between 5% and 95%. The best way to increase customer retention is to reduce your Time To Value (TTV). In today’s fast-paced world, where you’re bombarded by proposals and can change your offer at the click of a button, your TTV needs to be clear and fast.
What is Time To Value ?
The question to ask yourself is: how quickly will a new customer realize the value of your product or service? Let’s say you’ve skipped breakfast, you’ve spent the morning in meetings, it’s 1 p.m. and you’re hungry. Very hungry. You sit down at the local bistro and order a delicious dish of fresh pasta. Your TTV will take about ten minutes – just long enough for the dish to arrive in front of you and for you to sink your first fork into it.
For SaaS, the TTV is less obvious. You’re going to need a very good knowledge of your customers, their pain points and their Job-to-be-done.
You may spend several weeks deploying your program on your customer’s site. Or they may be able to launch their 7-day trial period simply by logging into their Google account. Either way, it’s in your customer’s best interest to enjoy the benefits of your product as quickly as possible.
That’s how you can reduce your churn rate.
Obviously, it’s rare that your user will be able to understand and really benefit from all the features of your offer in just a few days. This doesn’t matter, as long as they can take full advantage of a feature that’s important to them. In fact, you want to reach that moment as quickly as possible when they say “Wow, this product is great!” aka the aha moment.
Time To Value is not just a KPI frozen on paper. It is deeply linked to your customers’ emotions, to the satisfaction and delight they feel when using your products.
What are the different TTV?
There’s no such thing as a single Time To Value, especially in SaaS. Let’s talk about :
- Time to Basic Value;
- Time to Exceeded Value;
- Short Time to Value;
- Long Time to Value.
Time to Basic Value
This is the time it will take for your customer or user to enjoy a first benefit of your offer. Let’s take UberSuggest as an example: as soon as you sign up for the 7-day trial, you can search for your first keyword ideas. Thanks to this research, you’ll find your next blog post ideas. Time to Basic Value is very fast, and comes into play as soon as you start using the product, even if you haven’t yet taken advantage of all the features offered by Neil Patel.
Time to Exceeded Value
This is when the value proposition of your product or service exceeds your customer’s initial expectations. Take Netflix, for instance. Time to Basic Value is quick to reach: as soon as you’ve subscribed, you can launch your chosen series. On the other hand, you’ll surely reach Time to Exceeded Value once the algorithm has understood your tastes and introduced you to your new favorite shows.
Short Time to Value
The restaurant is the perfect example of Short Time to Value. Ditto for hairdressers or AIs who write for you: you quickly appreciate the value delivered by the company. As long as the work is well done, the effort required by the customer to understand the value delivered is minimal. The only risk is that it’s just as quick for your competitors to deliver the same value. It’s up to you to rely on an effective differentiation strategy to eliminate this competition.
Long Time to Value
Long Time to Value is quite common in the software industry. Deploying a new tool can take several weeks. Customers are aware of this as soon as they buy. It’s up to you to make sure that the installation goes smoothly, that your customer understands what you do, why you do it and how you do it, and above all, that you prepare a quality onboarding and familiarization with the tool. This is where a Customer Success Manager comes in handy.
How do you measure Time To Value ?
Time To Value may seem like a difficult number to measure, especially when your product has several features. Let’s take a look at Notion. Does the user expect TTV when :
- Created his first database?
- Downloaded his first ready-to-use template?
- Imported his data from Trello?
To be able to measure Time To Value, it’s essential to have a very good knowledge of your customers. And if you know me, you know what comes next: the best way to get to know your customers, to understand what you can do for them, is to interview them.
For example, for the Zapier automation tool, Time To Value is reached when the user has automated his first task, whether it’s scheduling an automatic email or automatically adding datas to your database.
So go out and meet your customers, so you can measure the right KPI. If you need it, I’ve put together a guide to help you prepare, conduct and analyze discovery interviews (in French).
How to reduce your customers’ Time To Value?
Now that you’ve identified your customers’ Time to Value, your goal is to reduce it. Here are five actions to help you do just that:
- take care of onboarding ;
- improve the user experience;
- become an expert on a single feature;
- hire a Customer Success Manager;
- train your users.
1 – Take care of onboarding
“You never get a second chance to make a good first impression”. If David Swanson wasn’t talking about your product, this phrase is totally applicable to the onboarding of your customers or users. From the very first seconds, they’re going to form an opinion about your product, and you want it to be a favorable one. So make their onboarding as easy as possible:
- send them a personalized welcome email;
- provide them with all the documentation they may need to use your product and get the results they want;
- rely on responsive customer service;
- educate them about your product.
Onboarding is an underestimated stage in customer retention.
2 – Improve the user experience
The best way to send your customer into the arms of your competitors? Offer them a complicated interface, with a slow customer journey, conditions written in fine print and the need to confirm four times that no, they’re not a robot. In short, improve the UX and simplify the interface. Think design and accessibility. Shorten loading times. Analyze user behavior. Get to know them, by conducting interviews (and I don’t mean their first name and marital status).
3 – Become an expert on a single feature
In other words, start by doing just one thing, but do it well. Rather than waiting until you have a perfect, complete product to launch, concentrate on a single feature. Obviously, this feature must perform an important job-to-be-done for your customers. Once you’ve mastered this first feature, you can expand your area of expertise and propose new offers.
In the beginning, Google was just a search engine. Over the years, the American giant created Gmail, Google Maps, Google Analytics, Google Drive and more.
4 – Hire a Customer Success Manager
Yes, it comes down to him (or her). At the same time, he or she is totally dedicated to the customer’s success in using the product or service provided. His or her aim is to ensure that the customer is completely satisfied with his or her purchase or subscription, and repeats the experience… even to the point of recommending others to do the same. Obviously, this is a major asset when it comes to reducing your Time To Value.
5 – Train your users
You can offer the best product or service, but if your customers don’t know how to use it, your Time To Value is likely to be (too) long.
Multiply the formats. For software, you could imagine :
- an interactive tutorial for the first steps ;
- video tutorials for specific steps;
- written FAQs.
And don’t underestimate the power of UGC, or User Generated Content. If you have a question about Notion today, you’ll find dozens of pieces of written content, videos or even coaches to solve your problem and help you get the most out of the tool. It’s also one of the reasons why WordPress is the world’s most popular CMS. There’s a community behind it that anyone can call on.
Let’s wrap up
At a time when 7-day trial periods reign supreme, when the “no commitment” guarantee is a selling point, it’s essential to reduce your Time To Value. In fact, SaaS pricing strategies frequently use free trial periods to drive growth. In this case, it’s a good idea to combine a free trial with a short Time To Value to convince the user to buy the product as soon as the trial is over. The freemium model, ideal for novice users or easy-to-use products, will need to convince users of the value of the functionality offered, while at the same time arousing the desire to be able to do more with a paid subscription. Whatever pricing strategy you choose, your user needs to understand the value of your product or service in as little time as possible. Of course, this doesn’t mean that your job of encouraging customer retention stops there. On the contrary, identifying and reducing your TTV is the first step.
Midjourney prompt/an hourglass running out of time with a dark background –s 100 –ar 3:2
Midjourney prompt/a middle-aged woman with dark hair, looking happy behind her laptop, loving the software she is using –s 100 –ar 3:2