Time to first value

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What is time to first value?

Time to First Value or Time to Value (TTV) describes the interval between a user’s decision to purchase the product or service and the time at which they first recognize its value. Value typically indicates that the setup procedure has been finished and the product has been successfully used for the first time. It is one of the most crucial KPIs in SaaS organizations and measures how long it takes for consumers to use a product after purchasing it.

Every client business has distinct goals that aid in its growth and success. Clients choose technology that provides a rapid return on investment. A speedy return on investment is necessary for effective planning and assessing infrastructure.

Because fast TTV enables clients to reap more benefits and the providing business to retain more of their current clientele, everyone wins when it’s shorter.

In the essential onboarding phase, when clients have high expectations for the SaaS product, businesses have less time to live up to those expectations. Here, Time to Value is most important. The business should aggressively direct its consumers to initial value at this time, either via automated in-product nurturing mechanisms or by live onboarding and customer success contacts.

The business gains from expanding product use and acceptance, which boosts customer loyalty and retention by reducing Time to Value. Users are motivated to switch from a trial version of a product to the premium one when they get value. Additionally, reducing customer Time to Value increases the time a business has to deepen its connection with clients and close more sales until its renewal date, boosting your Net Dollar Retention.

TTV is, therefore, both a goal and a crucial performance metric. This indicator has the potential to be one of the USPs that distinguishes the company from its competitors and draws in long-term clients.

Time to first value formula

The time to First Value can be calculated with the formula below:

Time to First Value Formula

TTV = Date of Initial Value Realization – Date of Set up

How to measure time to first value

To determine the time to the first value, the business must first value. As was previously said, the value should be based on the value of the consumers. A business should be aware of the objectives of its customers and how its offering will aid in achieving those objectives. Once the provider is convinced that they and their customer have the same understanding of value, the business may think about improving this value. Some of the main benefits or values that software tools provide include the following:

  • Aid in increasing acquisition.
  • Increased revenue and product customization.
  • Cost savings for operations.
  • Enhancement of the customer experience.
  • Retention- or churn-reduction-focused

As a result, it is critical for the business to ascertain what value the customer wants it to provide. Once you’ve found it, you may utilize it as the business’ offerings guide your development. The business must map its value throughout the process to ensure that the final product will provide the required value.

Using the formula, TTV can be calculated by finding the time difference between the date of purchase and the date of value realization. Let’s understand with an example.

Say a SaaS business named XYZ provides a platform for SMBs. A customer subscribed to it on March 1st. In order to link to their first source of data and determine the parameters they will employ to divide their statistics to create their own measurement, they completed the onboarding procedure on March 2nd. They were able to effectively show their sales income in the new data analytics solution on March 2nd and allow users to filter it by product category, geographic region, and sale date.

Here, Time to the first Value can be calculated with the formula below:
Time to First Value or TTV = Time Between Initial Purchase Date and Initial Value Realization Date

Initial Purchase Date = March 1st
Value Realization Date = March 2nd

Therefore, TTV = 1 day

In a different situation, a business buys a brand-new customer relationship management (CRM) solution on March 1st. They finish testing, import historical data, finish the onboarding process, and start utilizing the new CRM software by June 1.

Initial Purchase Date = March 1st
Value Realization Date = June 1st

Therefore, TTV = 92 days


Time to first value
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