“It only works if you truly believe in it. You can’t just read the cookbook; you have to be excited about getting into the kitchen to make something special,”
says Miro co-founder Andrey Khusid, when speaking of Product-Led Growth (PLG) to McKinsey & Company. I love this quote and wholeheartedly agree. Building on his cooking analogy: if approaching PLG with the right attitude is key to a winning recipe, then understanding and measuring Time-To-Value (TTV) is like using a thermometer to know if your roast is properly cooked.
In our initial article on PLG, we talked about why PLG is gaining traction, whether it’s right for your company, and how to start achieving success with PLG, keeping in mind that PLG is not an all or nothing approach. Many companies can benefit from a hybrid approach. In this article, we want to dig in on Time-to-Value (TTV), an underutilized measure that can help us keep our team on track and uncover levers to accelerate a PLG strategy. We’ll explore its definition, its significance in the context of PLG, and methods of measuring it.
What is it?
Time to Value (TTV) is the amount of time that it takes for a customer to achieve the desired outcome promised by the product. For example, if a product was hired to provide data security, the value is realized at the point the product starts providing that security. Or if the product was hired to reduce the time it takes to process a loan application from 2 hours to 1 hour, the value is realized when they achieve that one hour reduction. A shorter TTV means that customers see value sooner and are less likely to eliminate a product from the decision set when evaluating alternative solutions. It also makes it more likely for customers to get through the onboarding process.
To contrast this to product-market fit: Product-market fit is the ability of a product to satisfy the needs of a market, and the market is willing to pay for it. Product-market fit is not time-bound, whereas TTV is focused on how quickly a product can deliver on its value promise once being used.
For example, an ERP product may take 12 months for a company to integrate it within its existing process and talk to its other systems, and an additional 6 months for users to learn the system well enough to get the additional value promised over its previous system. Thus, the TTV is 18 months – and given the complexity, probably not an ideal fit for PLG. Alternatively, the TTV for a video conferencing solution may be less than 1 day as the user can sign up and start hosting meetings using key features in the same day.
Examples of companies with short TTV:
- Dropbox: The cloud storage and file sharing service has long been praised for its effortless onboarding experience. Users can quickly create an account and start uploading files within moments, allowing them to experience the value of easy file sharing and remote access immediately.
- Notion: This versatile note-taking and collaboration tool offers a user-friendly interface that encourages exploration and customization. New users can create their first note or page within moments and experiment with different features, demonstrating the platform’s flexibility and potential for value creation.
- Canva: The graphic design platform provides users with pre-designed templates that allow them to create visually appealing content right from the start. The platform’s intuitive drag-and-drop interface and readily available design elements enable users to achieve their design goals quickly, thus quickly experiencing the value of the tool.
A few interesting TTV-focused methods (certainly not exhaustive):
- Personalized user journeys: Leveraging user data to create personalized experiences that guide users towards their desired outcomes based on their unique needs and preferences. For example, a platform to help people save can offer experiences based on a person’s savings goals. This builds the perception of value immediately through familiarity.
- Interactive tutorials and onboarding: This is also method for aiding users through onboarding. Implementing interactive tutorials, tooltips, and in-app guides to assist users in navigating the product’s features and functionality effectively. For instance, having customer service reps available can provide a safety net to avoid a customer dropping out if they run into issues they can’t resolve themselves. Though this solves a symptom of a bigger problem that we try to avoid. And that is overall complexity within an experience, but I digress.
- Progress tracking and positive feedback: Implementing progress indicators, milestones, and encouraging language to show users how far they’ve come and how close they are to achieving their goals within the product. Gusto and TurboTax are great examples of this with language like “You just wrapped up your deductions, great job! You don’t have far to go now.” This can be particularly useful if value is delivered in phases.
- Tools for skipping expected effort: Providing templates and examples that help users skip ahead in getting to their outcomes, or at least envisioning the outcome, can drive an immediate connection to the product. Canva makes it easy to “try on” designs. They have hundreds of design themes and templates for all types of situations that a user can have up and running in minutes, seeing their desired design and quickly deciding whether to try something else on or start from scratch. And while developing your own content from scratch takes time, even in the simplest of applications, Canva does a great job of shortening the perceived time all within the first session.
Hurdles to Operationalizing TTV
If TTV is so important, why aren’t more companies measuring it? Here are some common hurdles:
- Competing priorities: Traditional growth strategies often focus on acquiring new customers vs. prioritizing the customers’ initial experience. There may be deep metrics that help us understand the marketing and sales funnel, but less visibility once a customer has paid. In conjunction with that, the product team may be looking at the overall user experience with measures such as Net Promoter (NPS) or some other customer satisfaction score. Which is important, but not enough to strive for product led growth.
- Complexity of measurement: There isn’t a “gold standard” measure for TTV. Defining the end point for when value is achieved requires a deep understanding of customers and a shared view of this within your organization. The action or point at which the user has that magic moment of seeing the value of a product could be different for each solution depending on complexity, steps in achieving the value, market expectations, etc.
- Internal silos: Organizations with disconnected departments – such as marketing, sales, and customer success – may struggle to create a cohesive user journey that swiftly guides customers towards value realization. For example: Many companies define the end of the sales process as when the customer pays, then another team takes over onboarding with separate measurements. With this approach, we can miss when the value proposition is realized.
Defining TTV Metrics
Each product delivers value differently. We need to deeply understand our user journey and define at what point in the journey the product delivers on its value promise.
Let’s say we are an online payroll company. We referenced Gusto in our earlier post on product led growth. We’ll stick with that here. The onboarding experience starts when the user completes the first page and Gusto starts creating a profile for their business. Each user realizes the value when they accurately pay payroll, so the TTV would be from the creation of the company profile to employees receiving their first paycheck. Knowing this, we can monitor how long this process takes in steps, time, perceived level of effort, etc. These would be where we center our potential TTV metrics. We’d call this an example of a milestone achievement, where we are tracking user progress toward completing a specific action. This is the simplest form of a TTV metric and works best if the product has a focus on aiding with or producing specific deliverables.
What if our product is more complex or value is defined by increasing productivity? You may need to define a series of metrics to understand TTV.
- User Activation or Onboarding Metrics: These metrics track specific user actions that indicate successful onboarding. While completion of onboarding may not indicate value, it’s important to understand how long it takes to complete each of the steps and where the friction lies. Reducing the onboarding friction is typically a central tactic to reducing TTV.
- User Engagement Metrics: These metrics consider how much the customer is using the product, such as the number of users who are active, how often they use it, and the use of certain features. For example, the value of a collaboration product may be achieved only when the majority of a team is using it. We can collect team size as part of the setup, then our TTV metrics would measure how long it takes to have a desired percentage of a customer’s team invited, logged in, and using at least 1 feature.
- Time to Complete Metrics: If our product promises to shorten the time that it takes to complete a task, we may be able to measure the time from the start of the task until the end of the task. For example, if the product is a marketplace that helps homeowners get quotes for home improvement projects, we can measure the time from the submission of the request to the delivery of the quote.
- Qualitative Feedback: Collecting feedback directly from users is another way to understand TTV. Let’s say our product helps hotels reduce the time it takes to clean and maintain their rooms. Customers have the initial setup, employee training and communication, and operational adjustments for the new system before productivity increases and value is realized. From simple interviews with customers we can learn that it takes 8-12 weeks for this to occur. Sending a survey or having a customer service rep call 8 weeks in with a defined set of questions can be extremely helpful. It can provide an over/under metric, with a goal to improve the percent of customers seeing value “under” 8 weeks.
Wrapping this Up
At its core, TTV requires a holistic approach that spans various stages of the customer journey and requires strong cross-functional collaboration. It all starts with product management best practices and putting a laser focus on continuous learning and improvement. This entails deeply understanding the problem(s) our product is solving for, the customers’ journey to the expected value, and where there is friction in order to identify potential levers to affect TTV. Then establishing a practice of experimentation, driving continuous improvement by forming hypotheses and running rapid experiments.
One thing you can do tomorrow? Start with documenting the existing customer journey from the time they first come to you (your site, first conversation, etc.) to paying for all/part of your solution through to moment the job for which your product was hired to do is achieved. Identify where perceived value is first obtained, how it builds through the experience, and the steps and friction customers face in that process. That knowledge alone can get you started in the right direction.
Need help? Contact Product Rebels for help in how to establish these practices in your organization.
Good luck!
Published: Author: Steve Cook