For businesses that sell a product or a service, there is always a transition process in the customer journey where relationships are transferred from the sales team to the onboarding or implementation team. You can guarantee the top question your customers ask themselves during the onboarding process is, “How fast will I start seeing value from this investment?”
What Is Time to Value?
Time to Value is defined as the duration it takes for customers to realize the worth of their investment in your product or service. Ultimately, what length of time is required to finish a project and realize the benefits of the solution? The concept is used to help decision-makers evaluate the proposed benefit of an investment.
Reducing time to value is crucial as it directly influences customer adoption, and retention and reduces churn rates over the lifetime of a customer relationship, which are vital metrics for any thriving business. Enhancing the customer onboarding experience is essential in this regard, as it not only solidifies the perceived value but also mitigates potential early-stage concerns.
What does this process look like for onboarding teams?
While the customer has likely been involved in the buyer process for months, the onboarding teams’ journey is just getting started. The first step after a new customer has been confirmed involves a formal handoff where the customer is introduced to the onboarding or implementation team. In some cases, this process can happen on the same day. In other instances, this process can take days or weeks.
This stage is foundational in establishing clear communication channels and setting accurate expectations, ensuring the customer feels both valued and understood. Concurrently, the sales team must transfer all relevant customer information to the onboarding team, including purchase history, specific customer needs, requests made during the sales phase, and potential challenges. This comprehensive transfer of knowledge is essential for the onboarding team to fully grasp the customer’s context and tailor their approach accordingly.
Subsequent steps include aligning the customer’s expectations and goals with the onboarding process, which often involves detailed product or service walkthroughs and setting a clear roadmap for implementation. A personalized onboarding plan is then developed, addressing the customer’s unique needs and outlining implementation steps and timelines. Key to this phase is providing targeted training and support, adapting to the customer’s expertise level to ensure effective product or service use.
Regular check-ins and feedback loops are established to monitor progress and make necessary adjustments, while seamless collaboration between the sales and onboarding teams is maintained through shared tools and communication protocols.
During this entire process, the customer experience is either validating they made the right choice in choosing you as a vendor or they are regretting their decision. It all comes down to their perceived time to value.
Why does time to value matter in customer onboarding?
Customers expect quick results and immediate gratification. We can get products ordered via Amazon delivered to our front doorstep in a matter of hours. We can fast-track security lines at airports with TSA and Clear security clearance. If we are hungry, we can have food delivered to us in a matter of minutes. Our culture has placed significantly more weight on post-purchase experience but more importantly, how fast can they experience the VALUE of their transaction?
If a product or service takes too long to deliver on its promises, customers may become frustrated, lose trust, and question their decision to invest in the solution. This is particularly true in the software as a service (SaaS) industry and other service-based sectors where the product’s benefits are not tangible goods but rather efficiency gains, cost savings, process improvements, or enhanced workforce capabilities. There is delayed gratification, which runs counter-cultural to buyer expectations.
How do you measure and calculate TTV?
Time to Value as a Key Performance Indicator (KPI) measures the time taken for a customer to realize the value of a product or service after purchase. It’s a critical metric for understanding customer satisfaction and product effectiveness.
For example, the simplest way to measure time to value in a customer onboarding process is to measure the average # of days it takes from the signed contract to the project live. For most SaaS businesses, depending on complexity, an onboarding process can take between 1 and 6 months. Setting that expectation upfront with customers is very important to ensure they understand the process time for delivery.
A secondary metric would be to measure the time duration it takes from kickoff to the successful completion of that project. This is a much simpler and more meaningful metric SaaS leaders can measure because it is the first major touchpoint of value for most customers after they have committed to invest in your solution. Setting a corporate benchmark across teams will allow managers to systematically focus efforts to improve those metrics over time.
Why Is It Important to Shorten TTV?
Reducing Time-to-Value is crucial as it directly impacts a company’s churn rate. Quick value realization fosters customer satisfaction and loyalty, essential for business success. Companies often overlook the early stages of the onboarding process, where customers may consider leaving if they don’t perceive immediate value.
Therefore, enhancing the onboarding experience to rapidly bring clients to the point of recognizing their return on investment is vital. This improved experience helps in creating a positive first impression, potentially smoothing over challenges or issues that might arise during the training and implementation process.
Let’s take a look at a few common use cases where onboarding experiences can lead to improved time to value for customers.
Use Case 1: Software as a Service (SaaS) Customer Onboarding
In the SaaS industry, the time to value is crucial and can be measured by the duration of the onboarding experience and user adoption. Customers who quickly understand and use the software are more likely to adopt it widely, which reduces churn rates. Early successes in using the software can also prompt customers to upgrade their plans or purchase additional services, thereby increasing revenue. Furthermore, satisfied customers often become brand advocates, generating new leads through positive referrals and word-of-mouth.
Efficient onboarding is vital for SaaS providers. By enhancing communication, automating processes, and streamlining training, providers can reduce the time it takes for customers to start using the software effectively and recognize its value.
Use Case 2: Commercial Real Estate & Franchise Location Expansion
In the commercial real estate and franchise sector, speed in launching new locations, such as hotels or restaurant chains, benefits both franchisees and franchisors. For franchisees, a quicker opening reduces pre-operational costs and leads to earlier revenue generation. For franchisors, it accelerates brand expansion and strengthens brand presence, potentially attracting more franchisees. This rapid expansion strategy increases market penetration and ROI for both parties, offering competitive advantages in the marketplace.
Use Case 3: Equipment Installation Including Both Hardware and Software
The efficiency of equipment installation by manufacturers critically impacts their order-to-cash (OTC) value. Streamlined installation processes expedite the delivery and setup of equipment, allowing for quicker revenue recognition and improved cash flow due to faster invoicing and payment collection. Additionally, efficient installation boosts customer satisfaction, potentially leading to repeat business or referrals, and indirectly enhancing revenue.
Use Case 4: Credit Card Processing for Commercial Clients
For corporate credit card companies like AMEX or Visa, the ‘Time to First Transaction’ metric, although not a direct revenue source, is financially significant. This metric indicates the time taken for a new cardholder to start using their card after receiving it. A shorter time to the first transaction suggests higher cardholder engagement and likely more frequent card usage, which can increase transaction fees from merchants, generate higher interest revenue from balances, and accrue potential late fees. Early engagement can also indicate long-term customer loyalty, which is financially advantageous for credit card companies.
Key Takeaway: Start Tracking TTV Now
In summary, enterprise teams need to measure the time to value delivered in their customer onboarding processes. Onboarding teams, whether in SaaS, commercial real estate, equipment installation, or credit card processing, TTV is a pivotal metric that directly impacts customer retention, satisfaction, and overall business success. The quicker customers perceive the value of their investment, the more likely they are to remain loyal, adopt additional services, and advocate for the brand.
Ultimately, by prioritizing and shortening TTV, companies can enhance customer experiences, reduce churn rates, and drive greater business growth. For companies prioritizing these efforts this year, TaskRay offers a suite of work management solutions designed to help onboarding teams maximize time to value.
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