Customer Success, SaaS

Podcast ft. @LincolnMurphy: The Secret to SaaS Retention: Cutting Time to First Value (+ other insights from @SamuelHulick, @patio11 & @statwonk)

If you’re charting customer success milestones into your user flow and/or onboarding processes, congratulations! You are way ahead of those who don’t. But before I can offer the panacea statement “You’re doing everything right!” – there’s one step you might be missing.

It’s easy to miss, because it’s counter-intuitive.

It’s counter-intuitive, because, being the very good CSM that you are, you’ve done ALLTHERESEARCH on your target customer. You know what they want to do and need to get done with your product. And you are building milestones into your product to keep them on track.

But here’s the missing link.

It’s easy to assume that time to first value is the same as time to first milestone.

It isn’t.

And understanding the difference is very… well… valuable.

It’s easy to assume that time to first value is the same as time to first milestone. It isn’t. Click To Tweet

We’re talking dollars and cents, make-or-break your company valuable.

First, a couple of definitions for the newly initiated:

Your Milestones: Typical milestones include trial period, sale, onboarding, product usage, upsell opportunity, renewal, etc. These are your milestones – the things you’d like your customers to accomplish so your product is successful. These are not your customer’s milestones.

Customer Success Milestones: The steps a customer has to take in order to reach their desired outcome. (Lincoln Murphy’s definition.) You can also think of them as the little successes along the way to reaching the customer’s ultimate success.

Time to first value (TTFV): Time to first value is how much time it takes for the customer to get real, tangible value from using your product. And this is “value” by their definition, not yours. This first value is probably going to be related to your value proposition – that promise that got your customers in the door in the first place.

The onboarding process, in particular, is where we really win or lose customers – and the surest way to win them is to show them value. In The Most Important SaaS Metric Nobody Talks About, RRE ventures connects the dots between the value proposition and time to first value in a nice, concise way:

Onboarding should emphasize and reinforce the value prop that drove the user to your product in the first place. Sign-up should be frictionless and deployment should be self-service to the point where the customer is up and running in minutes and, most importantly, getting value from your product a few moments right after.”

Onboarding should reinforce the value prop that drove the user to your product in the first place. Click To Tweet

A few moments isn’t much time to deliver value, and if your product simply can’t manage that – you’re not alone.

Lincoln Murphy has been noodling over the idea of time to first value for a while – and I particularly like what he has to say about including “quick wins” in the onboarding process. Quick wins don’t have to happen within the first “20 minutes” like the RRE Ventures article suggests, but they do need to happen fast enough to prove that your product is worth the time/money investment before the customer loses interest (or patience).

Reaching that first value quickly is easier in simpler SaaS products. But what if you have a complicated product, one which does a lot of things and has a steeper learning curve? I asked Lincoln Murphy, Founder of Sixteen Ventures to weigh in on time to first value, and what the TTFV process looks like for a more complicated product.

Time to First Value (TTFV) Podcast ft. Lincoln Murphy

Lincoln on Time to First Value

Since there’s some confusion over value versus milestones, Lincoln clears that up first.

I like TTFV because it forces us to think about value; milestones can quickly devolve into the typical inward-focused CX of just trying to get a customer to do what we want, not what they need to do.

The purpose of milestones is to get the customer closer to finding value – I might have to go through several milestones to reach first value. If a milestone isn’t value-based – if it’s not moving the customer toward their Desired Outcome – it isn’t a milestone. Or it isn’t a milestone in the context of Customer Success.

Also remember that “first value” may be actual value delivered (or received, depending upon your POV) or it could be when the value potential is first recognized by the customer outside of their interactions with sales and marketing.

More complex products often take awhile for value to be truly recognized, so the value potential is what we focus on initially.

Lincoln on First Value when it’s Complicated

Onboarding design is usually about prompting the new customer to complete “setup” tasks and/or learning how to use the product.

It’s a bit like creating a new character when you want to play your computer game – you pick a name, do some cosmetic surgery on the face, choose a species (I know I’m not the only RPG gamer here). The best games make that part fun too, because they know that fun is their customer’s desired outcome. It’s not that different for SaaS products, but with SaaS products – especially those adopted by teams and businesses, you also have to manage expectations.

Setting up the system is part of getting to first value, but you need to be prescriptive and manage expectations with them along the way, meaning you really have to understand what first value actually is [for the customer] and design a process to get them there quickly.

Structure begets trust.

The more we can help our customer set things up and manage expectations on their end, so they can plan for it accordingly, the more they’ll trust us. Often it’s the unknown that causes our customers to lose confidence in us.

The unknown is problematic because it’s confusing, hard to plan around. Sometimes, onboarding processes are even confusing on purpose.

For most vendors, the onboarding process is a total black box, at least throughout the sales process, and only then does it become more apparent that it’s… not actually that great.

You see this when vendors try to hide the details of onboarding from their customers until it’s too late for customers to back out. We need to be open, prescriptive and structured with our customers.

That said, very often, the setup, implementation, data seeding, integrations, etc., aren’t necessary to getting the customer to first value. That’s a huge idea, because vendors often don’t understand what initial value is for the customer. They think that in order for a customer to get value they have to have everything set up. The customer has to have all the implementations and integrations complete.

The reality is that’s not true.

It may be true for the customer to get ultimate value, but that’s not first value.
The critical piece here is understanding the difference.

Back to my role-playing games – sometimes the setup is more fun than the game. That’s doing it right. ie. finding the first value insta-fast. But in the serious world of SaaS, product development and sales folks are so concentrated on full adoption, that they miss opportunities to identify other, in-between ways in which their customers can get closer to their ideal outcomes.

Most vendors have an idea of value for their customers and that idea usually greatly varies from the idea of value that their customers have for themselves. The vendors’ idea of value is often full adoption, full breadth and depth. Customers must use all the seats and every feature or they can’t be successful, but your customers tend to have something else in mind. They have a business outcome that they need to achieve and that may not require what *you* think success really is.

The question is: do you care about what your customer sees as success? Or do you care about what you see as success?

You have to make a decision. If it’s all about you, all about that full depth and breadth of use, that’s fine, but know that’s not the same as your customer’s definition of success.

And that’s going to be a problem.

So how do we dig deeper and find out what first values to target?

We need to ask what is their ultimate business outcome and what would first value actually be?

Is it when they first get some real tangible value, or is it the first time, outside of sales and marketing, that they see the potential for value in their relationship with us? Figure out which one it is and that’s your onboarding goal.

Now we have to engineer a process to get them to that point.

Here’s the deal: We have this ultimate business outcome, and to get there we have to achieve these smaller outcomes along the way – an initial outcome followed by logical milestones.

If they don’t achieve those first few milestones, their ultimate goals don’t really matter because they won’t get there. This is why we see so much churn and non-renewal attributed to early lifecycle issues.

It’s your job as the vendor to know what that initial outcome is and help them achieve that in the appropriate way, and you have to know what those milestones are on the way to the next logical outcome.

But because software vendors often invest millions and millions into features, they want to shove those features on customers as quickly as possible instead of understanding what the customer needs and just giving them that.

Just that.

Instead, vendors tend to overwhelm their customers with too much stuff – features, tasks, integrations, enhancements, training, whatever – and the customer never gets any real value because they’re never really onboarded.

And how does timing work in this onboarding process? It’s not tied to the typical 30 days – that’s for sure!

I see a lot of vendors tie their onboarding to some artificial time frame, usually 30 days. And they say, “Well, they’ve been a customer for 30 days, check that box, they’re onboard now.” So even though they have an onboarding process, they have some arbitrary time frame, they overwhelm the customer, and then they say after that 30 days, the customer is onboard.

This makes no sense.

Then, of course, the customer complains they’re not getting any value and the vendor blames them for not finding value from this – obviously – super valuable product. There’s a mentality that has to change here.

Treat time to first value as a goal.

Every customer achieves success in their own timeline. We have to set a goal for them. We would like our customers, or at least a specific customer segment, to achieve first value either by getting actual value from their relationship with us, or, for the first time, see that real value potential in the product.

We want them to achieve that milestone in 30 days, but that’s a number we made up. It might take them 3 days, or three months. We might have to intervene, or it might be fine. It’s a goal. And we want to make sure that, if things aren’t fine, we intervene before those 30 days are up and get them back on track.

Instead of saying we have a complex product, we should start viewing it as a complex customer relationship. If they have a more complex goal, we’re going to have to work with them in various ways to help them achieve that goal. It’s not a complex product – the product is there to facilitate success through this relationship. It’s a different way to look at things.

But at the end of the day, you need to know what the ultimate value is, and you need to know what first value is, so you can design and engineer a process to meet them where they are and get them to that first value.

What other people are saying about TTV

Of course, Lincoln isn’t the only one talking about time to first value. Here’s what other SaaS industry insiders are saying.

How do you define TTV?

Samuel Hulick, UX Designer, UserOnboard.com:

“This is surprisingly tricky to define, because on the surface it would simply be “the amount of time it takes for someone to experience value from your product,” but HOW MUCH value is necessary for you to officially call it “finished”? Ideally, you provide some value in your product’s very first experience, but if that was also equal to all of the value someone COULD EVER get out of your product, you probably don’t have much of a product at all. Instead of coming up with a rule of thumb for when it’s “enough value to count”, I would instead focus on something like “value per minute”, wherein you focus on delivering more and more value more and more efficiently, kind of like this concept in video game design.

Of course, the people who NEVER receive value will skew that ratio way down, but, well… that’s sort of the point!”

Patrick McKenzie, Kalzumeus:

“Are you familiar with the character Walsh on Firefly and how he uses the word “Shiny?” When I’m thinking about this in my own head, I think Time-To-Shiny. You’re looking for a combination of both a) delight and b) either demonstrably improving someone’s life or credibly demonstrating that you have the capability of doing so.

Twilio, for example, has among the best Time-To-Shiny of any complicated, development-heavy software product you’ll ever use. You can credibly promise a massive improvement in folks lives as soon as their phone rings in response to code they have written; Twilio can have that happening in ~30 seconds or so for a new user if they’re being guided; perhaps ~5 minutes or so if they’re a motivated self-starter.

How to improve it? One, figure out a way to track it obsessively. Two, cheat like a mofo; ruthlessly defer as much as possible about the full experience until AFTER you have achieved that one moment of concentrated joy. Exact tactics for doing this depend a lot on the product at issue; often they involve (e.g.) having fake data pre-loaded in accounts so that someone doesn’t have to do weeks of data entry prior to seeing any improvement in their lives, scripted onboarding experiences, etc.”

Christopher Peters, Data Scientist at Zapier:

“Studying survival analysis taught me a great rule of thumb for this. The highest likelihood of TTV is always the moment after signing up. This is when the user is active, it’s only downhill from there. Having realized this, I’ve guided the team to really focus on onboarding well. Incorporating UX research is invaluable to get customers to TTV faster.

TTV is a curve. Some reach it in seconds, other years or even never. I think of it in terms of influencing a curve rather than a discrete point. The key is using statistics to measure TTV, but qualitative UX research to guide the improvements.”

How are you building value into your product or onboarding process? Leave a comment – I’d love to hear from you!


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