What is time to value?
Time to value is the amount of time between the beginning of an action and the value the customer sees from the action taken. In other words, how quickly do your customers realize the value you provide?
Depending on the product or service you offer, customers may see your time to value immediately, or it may take them more time to truly see how you’re helping them meet their goals.
For example, if your hands are cold and you pop into a store to buy a pair of mittens, the time to value is immediate. Your hands feel warm right away; you see the value of the mittens. But if you’re running a Facebook campaign for a client, how long between when they sign the proposal and when they see a return on their investment, when they see the value of your expertise?
To maintain full momentum and provide a customer experience that helps your customers discover the ROI in your offering, you need to track your TtV as a key metric.
Different examples of time to value
Time to value can vary greatly depending on your ideal client, the product/service you offer, the type of project you’re working on, or even your client’s ideal client. Regardless of industry or offering, there are a few main types of TtV you can track.
Time to basic value
Just because you sold a customer on something doesn’t mean they’ve found the value in you yet. That said, it shouldn’t take them too long after their purchase to realize they made the right choice. Calculated and measured, this metric is known as your “time to basic value.”
Time to basic value is the amount of time it takes for your customer to see the smallest amount of value from your product, but they have yet to see what you can do for them on a larger scale.
As an example, the time to basic value for Proposify customers is after they’ve signed up for a free 14-day trial, discover the number of proposal templates available to them, and understand the ease in which they can design and send proposals.
Your time to basic value to value should happen as soon as possible to convince your customers that you’re worth their time and money. This will entice them to continue purchasing what you have to offer, allowing you to prove even greater value over a longer period.
Time to exceeded value
This is the amount of time it takes for your customer to experience enough value to exceed their expectations and encourage them to continue doing business with you. This could be when your customer signs up for a paid account after finishing their free trial, or after you’ve completed a large project for them which helped them gain new customers reach in the market.
When your customer identifies the value you deliver on a higher level, it can solidify the relationship. Their LTV (lifetime value) is more likely to increase because they see you as a necessity for their success.
Long time to value
A long time to value is more common with products that take a couple of months to fully onboard customers. You may offer a variety of integrations that your client needs time to find and set up before they see the true value of your product or the time to value could be based on their sales cycle.
For example, Proposify’s TtV can range from long to short depending on how quickly our customers send and win proposals.
Whether they win their proposal within hours or within weeks, discovering the value we provide customers is key to them fully adopting our software into their routine. To show customers we support them in every step of the proposal process and to reinforce our value, we send a congratulatory email once their proposal is signed and the deal is closed, whether that happens immediately after they send the proposal, or much later.
Another example of long time to value may be a company that provides generator cleaning services; an important service that any company with a large generator needs, but one they don’t need frequently.
Because a business might hire a generator cleaning service company once a year, they only see the value of that cleaning service when they rely on their generator to function properly in the event of a power outage. While this is a long time to value, and one that is harder to track since it’s hard to know exactly when you’ll need a generator, the value is clear when the machine works properly when it should, and the business can see the company they hired to clean it did their job well.
Short time to value
A great example of a service with a short time to value is a window washing company. You have dirty windows, you hire a company to come clean your dirty windows, and you can see the value they bring literally right before your eyes.
The return on investment here is not necessarily immediate since washing windows on an entire building takes time, but the time to value is still short.
The problem with short time to value is that it leaves room for your competitor to sneak in and prove their worth and their value, potentially faster than you. The sooner you can show your clients value, the more likely they will be to continue working with you in the future.
Immediate time to value
Think of the satisfaction you get when you buy a chocolate bar while waiting in line to pay for your groceries or the joy you feel when you buy a bag of chips from the vending machine. The second you pay for it and eat it, you instantly experience the value of the product. The time to value is immediate.
A great example of time to value in a business sense is Hubspot’s website grader. You paste your URL into a bar, and instantly Hubspot provides SEO feedback about your site. Because it provides critical information so quickly, users are more likely to come back to use it again or will be curious about the other services they can purchase through Hubspot.
Immediate TtV increases the likelihood of success for deployment and adoption of your product or service, but to get there, you first need to track your TtV.
Why you need to know and measure TtV
Measuring key performance indicators (KPIs) is crucial for any growing business because they help indicate trends, and ensure company goals and targets are being met.
Though some of the most common KPIs to track include cash flow forecast, gross profit margin as a percentage of sales, funnel drop-off rate, revenue growth rate, inventory turnover, accounts payable turnover, and relative market share, tracking time to value is also necessary for growth.
Customers want to see their return on investment as soon as possible after making a purchase. Was your product worth the money or time they invested in it? If not, they may churn, choosing to work with your competitor instead.
Tracking time to value helps you to better understand your sales cycle, know when your customers will see ROI from your product or service, and forecast any changes you need to make to your sales funnel or marketing strategies.
How to decrease your time to value
A short TtV can drive development of new features or methods, and allow you to plan for any changes needed to your sales cycle. However, before you can decrease your time to value, you need to track and pinpoint when your customers experience the lightbulb moment of seeing your value.
A few valuable tools you should have in your back pocket when you’re looking to shrink your TtV and start winning more customers include tutorials, onboarding guides, customer success managers, and case studies.
Tutorials and onboarding guides
It won’t matter how brilliant you think your product is if your customers aren’t using it because they don’t see it as valuable. Whether your goal is to have immediate time to value or long time to value, you want your customers to stay interested enough to keep learning more or continuing to buy your product/service.
When a customer is new to your product or service, they want to understand how it works and see why it’s the right solution as quickly as possible. Tutorials and onboarding guides are one way to decrease TtV by introducing ‘small wins’ (or highlighting time to basic value), giving your customer confidence and independence using and adopting your product or service. They also provide a way to decrease friction, allowing your customer get to the major point of value faster.
During the onboarding process, you need to emphasize and reiterate the value you provide and follow through on your promises that brought the customer to you in the first place. If you’re a company like Basecamp and provide a service to organize tasks, goals, and projects, then you should offer new users tutorials on how to use each feature, build teams, and organize things to their liking.
By creating a user-friendly introduction to who you are and how to use your product, customers will be more likely to see the value of your offering quickly, which will shorten your TtV.
Providing clients with marketing collateral, like blogs, webinars, and tutorial articles during their onboarding process is a great way to show them you want them to be successful and are willing to share your knowledge to help them meet their end goals.
If you have an overall long time to value or a business that doesn’t require onboarding, it still helps to consider basic time to value. Providing support materials as your customer becomes more familiar with you showcases your knowledge, abilities, and experience, and provides your them with valuable information they can use as they need to meet their goals. Sharing information they deem critical or helpful will put you on a pedestal in their mind, and increase how quickly they see value in you.
Customer success managers
Customer success managers may not interact with new customers quite as often as they do long-term customers, but CSMs serve an important role in decreasing time to value and retaining clients.
Customer success managers bring a hands-on approach to showing your clients the value you deliver. They can walk high-level clients through difficult steps, help set them up for success, and offer personalized training that ensures your customer understands how to use all the features available to them.
While case studies don’t necessarily shorten time to value, they assist in keeping customers content until they realize your value. If they’re able to see that a company similar to their own has found success using your product, they may be willing to wait longer to realize the value.
Regardless of how many times you explain your value propositions to customers, or say you have “extensive experience”, a case study will always give those words context and provide your potential customer with an example of the accomplishment they could see if they work with you.
Whether customers recognize your value at lightning speed, or it takes longer for them to see it, time to value is an important metric that allows you to track the success your clients are having with your product, and pinpoint when they experience the true value you provide.
As you define your time to value more clearly, you’ll be able to plan new ways to onboard clients, set them up for success, and establish goals that will help your company grow more rapidly.
Remember, the path your customers take to seeing your value should be like a walk in the park, not a hike up Mount Everest. Provide them with a variety of tools to guide them along the way, so they reach that ‘lightbulb moment’ of seeing the value faster.