If you read any recent article about creating a great onboarding experience for customers, you will undoubtedly hear about the importance of measuring Time To Value (TTV).
Measuring & reporting TTV is a status quo activity in Customer Success, and once something is a status quo, you know that ‘nuffsaid will question it!
In this week’s newsletter issue, we’re highlighting a variety of opinions from around the Customer Success space on the topic of whether TTV is just a vanity metric or gives us a valuable signal to track.
The following excerpt was copied from my recent LinkedIn post about TTV.
"Time to value" doesn't matter.
Hear me out. When a customer doesn't adopt your product right away it's probably because:
- The product was sold to the wrong person/team
- They haven't adjusted internal processes to adopt a new product
- The buyer didn't get buy in from the people who will use it
- Implementation relies on a single person with competing priorities
- They don't have the internal expertise to adopt the product
- Mismatch between the pain the customer has, and your solution
Time to implement is NOT the problem. It's a problem with Ideal Customer Profile (ICP), customer maturity, buy in, etc.
Instead, here's what you could measure that will actually impact your company:
Count the # of customers and contract value that didn't adopt within XX days.
- Record the most common reasons for lack of adoption
- Deliver the findings to the executive team monthly
- Set a company-wide goal to reduce the count to 0
And throw out the time to value number which doesn't help you actually understand why customers don't adopt the product.
What we believe is true isn’t always.
I had assumed, like most working in Customer Success, that faster Time-to-Value would always produce lower churn. It’s intuitively obvious.
But data from one of my clients surprisingly said the opposite. While obtaining initial value was indeed predictive of renewals (increasing the odds by a factor of 5), the TIME it took for their customers to achieve it wasn’t. In fact, customers canceling actually met their goals a little sooner, on average, than those who renewed.
Why wasn’t time a factor? It’s unclear, but the finding raised interesting questions. Further study is warranted.
The lesson? Sometimes the truth is counter-intuitive. Testing your assumptions by analyzing data can lead to new insights.
Follow Monique on LinkedIn.
Chris Hicken posted on LinkedIn last week on the subject of why Time to Value (TTV) doesn't matter — it struck a chord with me because I have experienced some of the very things that Chris provoked us to think about.
He mentioned reasons why a product or service wouldn't be adopted immediately by a customer. My response was related to the TTV metric and how it would or would not influence adoption. I high-fived his thought by agreeing that TTV doesn’t matter when:
- No one is willing to own the purchase of the product or service offering because they've realized after signing the contract that it was too expensive and it wasn't the right fit for the organization.
- Or when the customer didn't get buy-in across their organization. Ultimately, when it comes time to launch the product, those who were chosen to lead adoption at a company aren't interested.
Now I'm responding from an individual contributor's point of view. Put yourself in my shoes for a second. Say I'm responsible for retaining and managing the implementation and adoption of the company's 1st ever major product purchase. When there's no champion or desire to promote success, it's insane. If you don't have buy-in from customers you sold the product to and no ownership for the lack of internal ICP vetting, you’ve got a major problem.
I don't believe that Sales is solely to blame, though that's where a CSM would most likely take the baton. Conversations between Sales and CS about TTV and ICP are imperative to have, but again, TTV doesn't matter if your customer didn't see the value before you even got started.
The following content was copied from Niclas’ recent LinkedIn post.
Time to value (TTV) is a very powerful metric. But it can also be a vanity metric if used incorrectly.
The reason why it’s often used incorrectly is that the definition of customer value, along with how value is being verified with customers, is not including customer voice - at all.
Customer value is rarely (never):
→ The tool has been activated/implemented
→ The customer got their user(s) setup
→ The customer logged in to the tool
→ The customer used [Feature_X]
Real customer value needs to be tied to real customer outcomes.
To verify these, a company must not just survey customers every now and then, but establish a seamless dialogue with them - throughout the entire customer journey.
After all, what value looks like the first 1-3 months of a partnership is usually very different from what value looks like after 12+ months of working together.
The following excerpt was copied from Arrows’ “Happy Customers Newsletter”.
Why Time To Value (TTV) Can Be a Deadly Onboarding Metric
Most onboarding teams measure their success based on the average Time To Value (TTV) of their customers. Some use onboarding completions. A handful explore the relationship between onboarding and specific product adoption metrics. Few however take into account this uncomfortable reality.
Your onboarding might fail before customers reach the average for any of those metrics.
Here’s the problem with using any simple measure of TTV, onboarding completion percentage, or time to adoption.
- Any individual customer is not the average - The average may be skewed by a few very “successful” or a few very “unsuccessful” onboarding journeys.
- The average does not tell you why - The average assumes that all moments and events inside the onboarding journey are both equal in time and equal for all customers.
You could very well be solving the wrong problems and spending your time in the wrong place by looking at the average Time To Value. TTV is like trying to improve your lap time on a racetrack without knowing if you need to go faster in the corners or get a whole new car entirely.
For TTV to be actionable, you need to know how quickly different customers are making progress towards your definition of value. You can’t wait until months down the line — nor a tenth of that time. In onboarding, momentum is king.
Here’s the secret: Know the actual time it takes customers to complete each step on their journey through onboarding. Only then can you identify the blockers and strategically intervene at the right moment to improve your metrics. To do this you need a granular cohort based metric in place of TTV.
Why granular? Because understanding which specific steps in the journey are blocking and how blocking they are relative to others is the best way to prioritize effort.
Why cohort based? Because looking at onboarding performance by cohort allows us to establish a baseline and track our impact on that baseline over time. We can also create cohorts based on different parameters to deepen our understanding.
Cohort based measurement can do a lot for your onboarding. On the surface your new metric might look similar to TTV when looking at the aggregate data. But unlike TTV you can tailor it to explore questions about onboarding performance specific to your business.
A granular cohort metric lets you ask (and answer!) thorny cause-and-effect questions, about your onboarding like:
- Based on their team size and the plan a customer purchases, how quickly do we expect them to be activated?
- Based on their technical expertise and solution they need to migrate from, which tasks in their onboarding plan should we pay most attention to?
- How can we prioritize our team's time on the highest impact moments in the onboarding journey by reducing our effort at others that are less important?
Follow Jan on LinkedIn.
Time to Value (TTV) is an important metric because it is the one your customer uses to evaluate your company and your product.
They may not have expressed it or shared their expectations with you. That will not stop them from judging your company and product.
Many companies confuse their customers’ goals with their own and assume that a customer perceives value at certain milestones. Those companies may assume that by communicating to the customer that they have achieved the company’s defined value milestone, it will convince them that they have received value.
Instead, to ensure that you are aligned with your customers’ expectations of value, discuss their goals that they expressed during the Sales process at your kickoff meeting.
- Share a Success Plan that includes SMART goals, get alignment on the milestones and timing, and together agree on when they expect to achieve value.
- Discuss the risks and what is required in your partnership to achieve these goals together.
When you follow up with the executive stakeholders, update them on the progress and any challenges to achieving their goals and expected value.
- Track the number of customers who are achieving value and the time it takes to achieve.
- Analyze the trends that lead towards churn vs. success.
- Perhaps any value goal that takes longer than 6 months leads to the customer churning.
- Maybe your analysis will lead you to make adjustments in your onboarding process, or to modify your Sales process and Ideal Customer Profile.
- Take those insights and act on them. Track, analyze, iterate, repeat.
Time to Value is probably not the most important metric to share with your board. Time To Value will not be the only indicator of an at risk or successful account.
But—if you assume that the customer has adopted your definition of Time To Value, or if you assume that the customer is not judging your company and your product based on their perception of value, you are exposing yourself to risk that could be easily avoided.
The best resources for Customer Success teams this week
Your Guide to Growth Amid Uncertainty
“In the old world of… just a few months ago… software companies had plentiful access to cheap capital and were seeing extremely strong demand for their products [...] Well, things have changed.” In this piece Kyle Poyar, Partner at OpenView, shares 7 expert tips every leader should consider in the current climate.
VOICE OF CUSTOMER
Box’s Jeff Justice Williams on Building a VOC Program at Scale
If you haven’t heard, we’re running a podcast series focusing on how companies can mature their Voice of the Customer programs. In our latest episode, I sat down with Jeff Justice Williams, the Sr. Executive Director of Enterprise CS at Box, to learn about how VOC should operate at scale.
103 Bits of Advice I Wish I Had Known
Here’s a list of learnings from legendary founding executive editor of Wired magazine, Kevin Kelly. It’s an interesting 5 minute scan.
Customer-Led Growth: From Buzzword to a Blossoming Business Strategy
I’m joining Lauren Costella, VP of CS for GoodTime, and Mark Pecoraro, CCO at Owl, on June 23rd for a deep dive conversation about Customer-Led Growth and why it’s a business strategy that’s here to stay.
Join me and countless other Customer Success super fans at this year’s Gainsight Pulse Conference where I’ll be presenting “Customer-Led Growth: Why I should give a #&^%”.