In the light of recent shifts in business environments, courtesy of a post-pandemic world and a stronger push towards digital transformation, B2B SaaS companies face a unique paradox. On one hand, the world has never been more ready to embrace software solutions, with a growing appetite for innovation and automation. On the other hand, patience for value delivery has significantly thinned, causing businesses to abandon solutions that don’t quickly deliver discernible value.
Time to Value (TTV) – the speed at which customers realize the benefits of their investments – has thus become the yardstick by which customers measure their software investments' success. The TTV metric has transcended from being an afterthought to a forefront KPI that customer success leaders must continually improve upon. The faster the TTV, the higher the chances of building loyal, satisfied customers.
In this blog post, we’re zooming in on the role of TTV in customer success in this new business age, aptly coined the "age of impatience". We’ll explore what TTV is and why it's become such a critical metric in B2B SaaS. We will shed light on the different forms of TTV and illustrate how to calculate each, share cutting-edge strategies to decrease TTV, supported by success stories from leading businesses, and show how improving TTV can drastically reduce churn. Furthermore, we’ll reveal some red flags indicating rising TTV and strategies to counteract them.
What is Time to Value and Why is it Such an Important Metric in B2B SaaS
Time to value (TTV) is the duration that it takes for a customer to realize the worth or value from a product or service. In the realm of B2B SaaS, this typically refers to the interval from when a customer first engages with a product to when they attain a significant outcome from that engagement.
TTV holds a crucial spot in B2B SaaS because it directly influences customer satisfaction and, subsequently, customer retention. The quicker customers perceive value from your product, the more likely they are to stay onboard, promoting customer loyalty. High TTV, on the contrary, might indicate a complex onboarding process or difficulties in using the product, leading to customer churn.
Moreover, TTV helps businesses prioritize improvements that deliver instant benefits and reduces customers' chances of opting out before seeing those benefits. If you're a customer success leader, actively managing TTV is key to boosting customer satisfaction and decreasing churn.
What are the Different Forms of Time-to-Value and How to Calculate Each
While TTV may seem straightforward, it can be multifaceted, considering its varying forms: Initial Time to Value (iTTV), Time to First Value (TTFV), and Expanded Time to Value (eTTV).
Initial Time to Value (iTTV): iTTV signifies the time it takes for a customer to gain the primary value from a product after initial implementation. To calculate iTTV, identify the key value indicator and measure the time lapse from onboarding to achieving that indicator.
Time to First Value (TTFV): TTFV represents the time from initial interaction to when a customer attains the first meaningful benefit. It's computed by measuring the period from the initial engagement to the first major benefit recognized by the customer.
Expanded Time to Value (eTTV): eTTV is about capturing the moment a customer realizes additional value after initial implementation, usually via upselling or cross-selling. You calculate eTTV by measuring the time from the initial value to the point where additional value is perceived.
What are the Best Practices in 2023 of Reducing Time-to-Value and How Are Those Implied by the Best Businesses in the World
As we navigate through 2023, successful businesses are utilizing innovative practices to shrink TTV. Let's examine 8 eight of these best practices, highlighting how a few leading organizations have effectively implemented them:
Streamlined Onboarding: The less complex your onboarding process is, the quicker customers will begin to extract value. An excellent example of this is Dropbox, a company that has mastered the art of simplified onboarding. Using in-app walkthroughs and tooltips, Dropbox seamlessly guides users through the product, enabling them to immediately understand and utilize its features.
Robust Customer Education: Businesses should provide comprehensive educational resources to help users understand their product or service. Canva, the online design platform, offers a vast library of tutorials and templates. This approach enables users to start creating designs immediately, realizing value without delay.
Proactive Customer Success Teams: Salesforce, the global CRM leader, has dedicated customer success teams focused on helping customers achieve their goals promptly. These teams provide personalized support to clients, ensuring faster realization of value from Salesforce's vast product offerings.
Continuous Product Improvement: An ongoing commitment to refining and enhancing product functionality ensures it remains valuable and relevant. Slack, the collaboration hub, frequently introduces new features and integrations based on user feedback, reducing the TTV for customers who continually find new ways to increase productivity.
AI and Automation: The use of artificial intelligence (AI) and automation can significantly expedite TTV. For instance, Netflix uses AI for personalized recommendations, allowing users to discover relevant content quickly, thus delivering immediate value.
Advanced Analytics: By understanding customer usage patterns and feedback, you can make data-driven improvements to your product. Google Analytics uses its own tool to analyze user behavior and continually refine the platform, reducing the time it takes users to achieve valuable insights.
Personalization: Personalizing the customer experience based on unique needs and behavior can significantly reduce TTV. A powerful tool to achieve this is through customer hubs (such as the one provided by EverAfter), which serve as a centralized location for all customer information. By leveraging the data in these hubs, businesses can create tailored onboarding experiences at scale, addressing individual needs and providing relevant information from the get-go. This accelerates the user's journey to achieving their desired outcomes with the product.
Amazon, a leader in personalization, not only provides personalized product recommendations, but also uses customer data to deliver a curated shopping experience. This reduces decision-making time and helps customers quickly realize value from their purchases.
Similarly, software companies can utilize customer hubs to streamline and personalize onboarding for each user, regardless of the size of their customer base. By adjusting the experience to align with each customer's specific requirements and preferences, businesses can drastically reduce TTV, ensuring that every user realizes value quickly and is set up for ongoing success.
User-friendly Design: Products that are easy to navigate and intuitive to use have a lower TTV. Apple is well-known for its focus on user-friendly design, making its devices and software easy to understand and use right out of the box.
By integrating these practices into your strategy, you can reduce TTV and drive customer satisfaction and loyalty, mirroring the success of these leading global companies.
How Can Time to Value Help Reduce Churn
Lowering TTV is a powerful way to reduce churn. When customers experience the value of your product swiftly, they are less likely to switch to a competitor. There are two primary ways TTV reduction helps fight churn:
Increases customer satisfaction: The faster a customer can gain value, the more satisfied they are. A quick TTV indicates a product that's easy to use and delivers on its promise, thus enhancing customer satisfaction.
Promotes stickiness: When customers realize the value of your product quickly, they are more likely to integrate it into their workflows. This integration, or "stickiness," makes it difficult for customers to leave, thus reducing churn.
What are Common Early Warnings That TTV is Going Up and How to Mitigate Them
Keep an eye on these red flags that may suggest your TTV is rising:
Increased customer complaints or queries: This could indicate a complicated onboarding process or confusing features, pushing up TTV.
Lower product usage: If customers aren't using your product as much as they should, it might mean they're not realizing value from it, raising TTV.
Decreased customer satisfaction scores: Lower scores may reflect customers not experiencing the promised value, leading to a higher TTV.
Here's how to mitigate these:
Streamline your onboarding process: Make your product easy to understand and use from the get-go.
Offer robust support and education: This empowers users to understand and utilize your product fully, delivering value more swiftly.
Enhance product functionality: Constantly refine your product to ensure it delivers its promised value and satisfies your customers.
In conclusion, managing TTV is essential for customer success leaders in B2B SaaS businesses. By understanding its forms, employing strategies to reduce it, recognizing early warning signs, and mitigating them, you can increase customer satisfaction and reduce churn.