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In a world where applications are delivered via cloud and distributed across billions of Internet-connected end-points, we’ve seen barriers to entry, adoption and innovation compress by an order of magnitude or two, if not crushed altogether. Compound this by advances in application and data portability and the implication for technology vendors competing in this global, all-you-can-eat software buffet is that customers’ switching costs are rapidly approaching zero. In this environment it’s all about the best product, with the fastest time-to-value and near zero TCO. And it’s this second point – time-to-value (TtV) – that the author digs in on a bit because it tends to be the one glossed over most often. The takeaway is that highest priority should be given to building software that just works, and that means focusing relentlessly on reducing or eliminating altogether the time investment to fully deploy your solution in production. Ideally, you want customers to derive full value from your offering in mere minutes, if not seconds. To do so, treat on-boarding as a wholesale product within your offering and devote engineering resources to it. Find religion about optimizing TtV! An optimized TtV has positive ramifications throughout the organization ranging from freeing up support engineers to work on product to enabling a tightening of sales and marketing spend up and down the funnel. Ultimately, a short TtV drives all those other metrics folks seem to care so much about like MRR, LTV, CAC, Churn, etc.

  • PM

    Paul Marshall

    over 4 years ago #

    Good post and agree this is a process and metric that needs to be measured and optimized. One thing that I see some companies struggle with DEFINING value with the customer. Often customers (especially in #ENSW) can identify that things are 'better' but unless 'value' is defined in measurable terms upfront...churn is still a risk in my experience. The challenge I believe is establishing this definition while NOT slowing conversion velocity and thereby increasing risk that they will bounce. Defining value while shrinking the funnel is a delicate balance...doing both and minimizing conversion time AND the TtV is critical to short and long term sustainability and growth.

  • MF

    Michael Feng

    over 4 years ago #

    100% agree. As a corollary, I've found that feature creep happens because of lack of visibility into what users actually do when they use the product.

    We struggled with this for a long time, until we decided to invest in an analytics infrastructure that shows us every event that occurs from the moment users land on our site till the moment they leave. It's been incredibly enlightening because now we can double-down on the features that work and scrap that ones that don't.

  • GM

    Giancarlo Massaro

    over 4 years ago #

    Interesting post. We recently started tracking the amount of time between a user signing up and converting to a paid customer. When a customer pays us we are able to identify next to their profile how long it took for them to convert. We then have an overall average, and we're working on things that prevent people from immediately getting value out of the product so we can bring that average down.

    • LM

      Lincoln Murphy

      over 4 years ago #

      Hey @massarogi ... I've worked with lots of companies over the years to shorten the time it takes for a prospect in the Free Trial to convert to a paying customer.

      I did this by really understanding what they needed to do/see/experience/achieve in the trial to make becoming a paying customer the most logical next step and then (re-)designing the process to reduce the time to get them to that point.

      That point where becoming a paying customer just makes sense tends to correlate nicely with when they achieve actual value (or are right on the crux of doing so... but can only do so once they pay) from your product.

      This requires you to move from thinking about "functional onboarding" - or just getting them up-and-running with your product (feature-thinking) - to thinking about value delivery in this stage of the customer lifecycle.

      • CM

        chaz mee

        over 4 years ago #

        Even if what you have is important (take weight loss for example), I think proving difference is also important. If you're vying for the same customer as someone else but you only hit on the importance or base value (lose x amount of weight in y days) and also don't differentiate (lose x weight in y days by not giving up the food you love) then your value is lower. (I know - slightly stupid example sorry).

        This could result in a longer free trial, extended free trial or competing on pricing strategy or even discount schemes (invite a friend and get 50% off your membership!). If you deliver the same base value as someone else in the same amount of time, even if you prove that value, but your "value" doesn't have any perceived or noticible difference, then that could become an issue no? Just asking. But maybe you mean this as well.

    • PM

      Paul Marshall

      over 4 years ago #

      Good luck shortening the funnel! Measuring pipeline velocity is awesome & allows you to know specifically where your issues are. My only suggestion is try to create ways to install urgency and remove ALL unnecessary fields (be ruthless with this). Strong calls to action (do split testing) in large fonts with explicit simple instructions.

  • LT

    Luke Thomas

    over 4 years ago #

    Time to value matters a lot, but another important step that this article doesn't mention is how frequently this value is delivered. I've seen many products that can quickly show value to the end-user, but the biggest struggle is getting usage over time.

    Clearly the frequency can vary (Snapchat needs to be more engaging than Turbotax), but I'm not sure if I agree that time-to-value factors into reducing churn. If someone doesn't use your product, they most likely won't even get to a point where they pay you.

    • LM

      Lincoln Murphy

      over 4 years ago #

      Hey @lukethomas ... actually, it does relate to churn, though it also totally applies to conversions in a Free Trial, stick rates post-trial (I always look at least 60-90-days post trial for the real conversion number BTW), etc.

      Essentially this is all about the customer experience in the early stages of their lifecycle with you.

      And as I say all the time (based on actual experience) "the seeds of churn are planted early."

      If you take too long to deliver actual, real value to your customers, if the onboarding process is drawn-out or otherwise less than ideal, etc. that can lead to a customer getting started but already having one foot out the back door.

      In fact, in the Customer Success world the Time to First Value (TTFV) metric (a little nuanced from the metric used in the article) is something we measure and encourage people to relentlessly focus on reducing.

      You want to continually be reducing this (either by refining the process to get there OR realizing that what you thought was "value" was overkill and you can simply).

      I get pushback all the time from companies with complex systems who say they just can't reduce the time it takes to get a customer to first value... but then they can't even tell me what "first value" actually means for their customers. That, plus the fact that they act like having a complex setup process is some sort of badge of honor and you've got the context for the inevitable "why don't my customers renew after the first year?" discussion.

      But the key to all of this is this is "value" ... you have to know what the Desired Outcome of your customers is at that stage of their customer lifecycle (it varies don'tcha know) so you can effectively solve for that.

      • LT

        Luke Thomas

        over 4 years ago #

        "The seeds of churn are planted early." <- Totally agree.

        My point is that I've seen numerous products that have a short time-to-value, yet this value doesn't have any sticking-power. In other words, people signup for a trial, have a "Wow" moment, but the pain isn't great enough (or it's not based on an already existing habit), and retention/usage suffers. I see this in the B2C world all the time.

        I think we're speaking the same language. I spent the past few months getting an enterprise email platform (you've heard of them) setup and it was incredibly painful. The time-to-value was lengthy, and unsurprisingly, we also aren't too happy with the vendor. We're definitely at risk of churning.

        My point - if we had setup this platform in 2 days, but never sent any emails, we'd still be at risk of churning. TtV + usage = a winning combination. Both factors are needed.

        • LM

          Lincoln Murphy

          over 4 years ago #

          Yeah, nothing exists in a vacuum. It's time to FIRST value... and then you have to continually deliver the expected/required value at each stage of the lifecycle from there.

          That said... I almost agreed that we were speaking the same language until you said this: "if we had setup this platform in 2 days, but never sent any emails, we'd still be at risk of churning."

          Of course you would... It's time to first VALUE... not time to into the app.

          No one gets value from just standing up the app. Value (generally) comes from some level of usage.

          Of course, "usage" doesn't lead to value delivery... it has to be a specific usage that leads to value recognition.

          • LT

            Luke Thomas

            over 4 years ago #

            Haha, yeah you're totally right. That was a bad example. So here's another one.

            The article mentions New Relic - "The company was fanatical about delivering value to devs from their APM solution within 5 minutes of signing up."

            This is 100% true (and extremely important). But this is not the only factor in the equation. Devs are CONSTANTLY checking performance (people I work with are always referencing New Relic charts/graphs on an almost daily basis). If this didn't provide value over time, my coworkers wouldn't pay for it.

            My original comment was simply to point the article focuses a bit too much on onboarding itself.

  • TM

    Taylor Miles

    over 4 years ago #

    How would you do this with a Mobile SDK. There does not seem to be any way around the 30 minutes to 3 hours required to do a custom install.

  • CM

    chaz mee

    over 4 years ago #

    I think this is an interesting point - esp. when many platforms are competing for the same customers and even using the same acquisition techniques on the same customers and aren't identifying or realizing stickiness fast enough (which is really about retention) - it's too easy for customers to be "skimmers" these days.

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