A topic I’ve heard time and again coming out of the board room is time to value (“TTV”). How long does it take your customers to get to value on your SaaS product? How can you shorten TTV from months to weeks, weeks to days, days to hours?
What is time to value?
Time to value is the amount of time that passes between a customer signing up / buying your product and that customer realizing your product’s value proposition. This is typically represented by your onboarding period and is also called the value gap.
A customer may never be as motivated to dive into your product as they are when they first sign up. If it takes too long to get value out of your product, you may need to re-sell customers on why they became a buyer in the first place. This re-sale is very expensive and can kill your customer acquisition cost (“CAC”).
Your product’s value proposition determines your TTV window
SaaS products broadly fall into one of two categories:
1. Business critical – your product’s value prop is a pain killer
2. Nice to have – your product’s value prop is a vitamin
If your product is business critical, you can afford a longer TTV window as the customer cannot run their business without your product. It’s a painkiller. Examples of this are ERP systems, billing systems, etc. These are systems where companies are willing to go through multi-quarter-long implementations as they can’t run their businesses without it.
If your product is not business critical but rather a nice to have, you must get your customer to value as soon as you possibly can. Your product is a vitamin that customers can do without, so any value gap should be accompanied by a well thought out onboarding process to keep customers engaged and excited while they wait. An example of this that comes to mind is Superhuman—despite the fact that everyone on Twitter swears by it, I think this product falls in the nice to have category. One of the keys to Superhuman’s success has been to realize this constraint and to curate an onboarding process that gets customers to value almost immediately.
The holy grail of TTV is if your product is both business critical AND quick time to value. This can be a major competitive advantage and differentiator. Shopify comes to mind as being in this category.
Plenty of successful SaaS companies exist on both ends of the business criticality spectrum. The success of these companies comes in part from realizing how business critical the product is and solving the value gap within that constraint.
Photo by Dicky Jiang on Unsplash