In the SaaS industry, the potential for losing customers is never too far away. This is especially true during the introductory onboarding period when customers search for their aha moment in a product. Once users are convinced to sign up for a free trial or purchase a plan, product owners have to show them their product's value before the users churn. No user wants to spend a lot of time or effort setting up and learning a product that might not benefit their needs.
Additionally, a user's priority isn't just to receive the maximum value possible from a product. It's to receive the most value in the shortest time possible. It is helpful to concentrate on streamlining the process of getting users to find value from the product as quickly as possible.
That's where time to value (TTV) comes in:
What is time to value (TTV)?
Time to Value (TTV) is how much time it takes a new user to realize and gain value from a product or service. TTV is a crucial principle in the SaaS space because there's simply no time to waste when it comes to retaining customers. A short TTV means users get a return on their time investment faster, which makes them more likely to stick around.
Product owners should strive to lower their TTV as much as possible so that their users discover and enjoy value from the product quicker. Regardless of who the user is and whether they invested time, effort, or money into trying out the product, they'll want value from what it’s offering. Failure to give that value to a user can lose their business for life.
Types of TTV
Depending on their nature, different industries, products, and services have various times to value. Some products and services provide immediate value, while it takes a bit longer to deliver for others.
Understanding where your product falls on the TTV spectrum and how to get there using data should be a key focus. In general, there are two types of TTV:
Immediate or short time to value
Say someone’s on their way to work and they want to stop at Starbucks to grab a coffee quickly. They use their mobile ordering feature to pay, so their almond milk latte is ready and waiting for them when they swing by. The time to value in this situation is immediate, as they quickly get their much needed dose of caffeine before heading into the office. Their aha moment is uncovered the moment they pick up that coffee. Another example of immediate TTV is Coschedule's Headline Analyzer. Their users plug in a headline to receive an instant score so they can drive better traffic, shares, and search results on their content pieces. The tool provides immediate value for users and serves as an effective lead generation tool for Coschedule.
Long time to value
Most SaaS products fall into the "long time to value" category. Simple access to the product on its own doesn't provide an immediate benefit—it requires some further action. Users may need to import their data, invite collaborators, or complete an onboarding sequence before they start to realize the product's benefits. Take an app like Slack, for example. Signing up for a messaging tool doesn't provide immediate value. The aha moment happens when a user invites their team to a workspace and starts chatting, a task that requires multiple steps to complete.
Reducing TTV helps prevent user churn
It's crucial to understand that the longer the TTV is, the more customers churn. Users have limited patience and don't want to feel like they're wasting their time. Helping users reach their aha moment quickly will result in less churn and more revenue for a business (plus, it costs 5x more to obtain a new customer than to hold on to an existing one!) It's an equally compelling fact that increasing customer retention rates by 5% leads to a 25% - 95% increase in profit.
But the tables turn when users realize the value of a product. Activating that aha moment is what separates customers who keep using a product from those who churn. The quicker users realize how a product can benefit their lives, the less likely they are to churn.
Quick tips for faster TTV
Let's look at effective strategies for reducing a product's time to value through different channels:
Motivate users through onboarding emails: Provide a series of onboarding emails to engage new users to take action in a product. During the free trial period, consider sending emails triggered by specific behaviors that include lessons about the behavior and CTA's that lead users straight to the feature.
Customize the onboarding experience: Quickly helping users reach their aha moment can drastically increase revenue. Consider personalizing the product's onboarding experience to keep them engaged and interested, reducing TTV and improving the general user experience.
Reduce friction within a product: Product owners may find it's easy to forget what it's like to use a product for the first time. Removing friction from the onboarding flow is crucial for reducing TTV. If users can't find the feature they're searching for in a complicated UI, or if a mobile experience is challenging to navigate, users are more likely to churn before they have a chance to experience the benefits of a product.
Guide users with in-app onboarding flows: Use in-app onboarding experiences like product tours and checklists to help users discover the benefits of a product quickly. Allow the user to receive the benefits they expect to receive, not just the ones you want to highlight.
Use a digital adoption platform to reduce TTV
Implementing a digital adoption platform will help your team create a smooth onboarding process so users can make their way through the flow with interest and ease. Digital adoption platforms like Lou will make your product more intuitive and will help users accomplish key tasks and complete their customer journey with lower chances of churning.
Ready to see how Lou can take your user engagement to the next level while reducing TTV? Start for free today.
Published on January 6th, 2022
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