Time To First Value is a fundamental metric for subscription-based businesses. It could make or break your customer retention.
Subscription businesses can’t wait too much time before delivering concrete value to their customers. When users are frustrated or unsatisfied, they tend to leave your service quickly, especially if the commitment to your service is a relatively low monthly cost.
What Is Time To First Value (TTFV)?
Time To First Value (TTFV) measures how much time it takes for your product to deliver some value to its users.
Since we can’t risk losing too much time to deliver value, the lower this metric is, the better! It’s often measured in days or weeks.
How TTFV Creates a Revenue Snowball Effect
A low TTFV can create a snowball effect that can grow your revenue exponentially.
Customers that are happy to use your product right after their first payment are more likely to stick to your service in the long term.
Happy customers also translate into increased and more frequent use of your product. They log in more often, explore more features, and become more engaged overall.
More activity on your product means more chances to motivate users to buy additional modules or services that you offer.
Real Examples of TTFV
For Dropbox, the first value is when a user adds a file to a shared folder. It can be a relatively simple action that rewards your user with value. They’re not waiting for someone to download the app, set up complex integrations, or learn a bunch of features. They upload a file, share it, and they immediately see why Dropbox is useful.
For a hosting service, TTFV may be when a users create their first website. It’s not about them becoming an expert or using every feature. In this case it’s just about that moment when they see their website live on the internet for the first time.
Getting to these moments is simple, achievable without experience with your product or website, and directly tied to the core benefit you offer to your customers.
How to Define Value for Your Customers?
If you’re not sure or don’t have specific proof, don’t assume to know what values looks like for your customers. To define what value really is, it’s essential to ask them the right questions.
You can start with these questions:
- How do you know you achieve value with this product? This gets to the heart of what success looks like from their perspective.
- Do you have an ‘aha!’ moment? If so, what is it and how do you arrive at it? This helps you identify the specific moment when things click for your customers.
- How long does it take to achieve value? This gives you your current TTFV baseline so you know what you’re working to improve.
- What are the obstacles that prevent you from reaching first value? Your customers will tell you what’s slowing them down, and you can fix those issues.
You can send these questions in a simple email survey to your most engaged customers. Or, you can send them an email, where you mentioned which features they used so far in the product, and ask them if they’re open to a 1-1 short call.
You can also offer them incentives. These don’t need to be monetary. You can offer them to try and test features that are in beta before the rest of the user base.
Start Measuring and Improving Your TTFV
Once you measure TTFV, you can try to decrease it. Identify their value moment, measure how long it takes customers to reach it, then systematically remove obstacles and streamline the path to get there faster.
Make it easy for your customers to get to their first win, they’ll likely keep your subscription active, and you will increase the average LTV (LifeTime Value) of your users.