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What is the Time Value and How Do You Maximize Time To Value?

Apr 25, 2023

Time to value is an important measure because it allows team members, managers as well as investors to determine how quickly they can expect a project or product initiative to pay off. It can be used to decide which projects should be given priority or the resources needed that will yield the highest ROI over the long term.

In this post we'll look at the details of the time-to-value, how the business world has adopted it, the factors that affect it, and how to improve it for your operation.

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What is the Time in Value?

Time to value is a measurement that measures how long it takes an investment to produce the expected returns. It is measured from the date of purchase up to the time when value or income exceeds costs.

Let's look at it from two different perspectives in that time to value is essential for everyone involved.

   Company perspective  

for a company, TTV can help measure the cost of investment, both in time and cash - for a new project or product and the time it'll take to start seeing returns from the investment.

For example, suppose an organization launches a brand new software product. If that's the case, TTV will help them determine how long it takes from launch until they start gaining clients or subscribers that are currently using and purchasing the software.

It may also be determined from the time of project inception or when key stakeholders sign off on the allocation of resources.

It doesn't have be centered on the return of monetary investment or even. Value may be obtained in various ways, including:

  • Increased customer satisfaction
  • Improved name recognition
  • Higher employee engagement

A sustainable initiative is a good example. It could improve your image and bring in new customers, without an immediate monetary return.

   Consumer perspective  

Businesses must also consider the viewpoint of the customer, because the time to value of a product is an important factor in purchasing decisions - especially in B2B sales.

To secure a sale, it is essential to demonstrate that the service or product that you provide will begin to offer benefits to customers in a reasonable amount of time. They may look elsewhere in the event that they wait too long to see returns on their investment.

Different kinds of Time to Value

There are different classifications for the time value of a thing that may give a deeper understanding of this notion.

   Timing to Productivity (TTP)  

Time to Productivity measures how long a product, service, or business process takes to produce the desired result. If a new employee is hired, how long does they take to begin working productively? When a customer buys a product, how before it begins to provide the desired value?

   Time Conversion (TTC) Conversion (TTC)  

When you sell products in a trial basis, time to conversion is the time it takes for a customer to decide to purchase. It could also be a reference to the time it takes for visitors to your site to become a paying customer.

   TTFV = Time To the First Value (TTFV)  

Time to first value measures the amount of time required for customers to experience tangible benefits from the product. This could mean how long before they begin to see a meaningful return on investment or gain access to the primary benefit.

   Time to Exceed Value (TTEV)  

In contrast the time to surpass value is the amount of length of time that it takes the customer to realize benefits above their goals. It could happen the moment they begin using the features in your product that are greater than the one they purchased initially, or when someone starts saving more than they anticipated with a subscription service.

   Time to Market (TTM)  

The time to market measure how quickly a product or service is released. The term is usually used to describe product launches, but can be used to describe process and services. The aim is to have the product available in the shortest time possible, so that you can see the results of your investment sooner.

   Time to Revenue (TTR)  

The time to revenue measure how long it takes for an item or service to begin generating income. The calculation is generally made starting from the time a project begins, but not until it is made available for purchase.

The importance of TTV

Although a brand new feature may project a 300% ROI, that doesn't necessarily mean that it's a good business decision. If the time to value is five years, such as, a company might miss out on additional possibilities or become overwhelmed by rivals.

On the other hand projects that have less return on investment but a quicker TTV may be more beneficial in the event that it opens up new markets or increase customer satisfaction in an area where you have been lagging in comparison to your competitors.

TTV is also crucial in determining how you allocate funds and the priority of projects within your business. It helps executives decide which projects will bring in enough returns to justify the investment of both time and funds.

Factors Affecting Time to Value

It can be challenging to accurately predict time to value because there are many factors that could affect the process.

   Complexity of product/service  

The first significant factor is its complexity. If a product or service needs a lot of set-up, training, or even integration, it'll require longer to convince customers to see value in it. When you're selling an online academy for instance, students need to begin learning practical skills quickly, or they could become dissatisfied and quit.

   Engagement and user adoption  

Making a product that's not going to be adopted by users is a waste of time and money. If the service you've developed isn't user-friendly, it may take users longer to learn how to use it and benefit from it. If customers don't remain engaged with your product, they won't become repeat customers or provide enough long-term benefit.

   Integration with other technologies  

Does the software immediately connect into existing processes and systems? Or will it require additional resources to set up the connection?

They can have a significant impact for businesses, especially ones that rely on older systems. When a product needs extensive integration work, its TTV could increase dramatically, making it less appealing to potential clients.

   Customer support quality  

Certain clients will require assistance, regardless of the ease of use a product has. If the customer service department isn't fast and efficient, it could delay the TTV for a particular client.

In fact, adequate support systems can make or break a product launch altogether. A bad reputation early on for support may have a major impact on customer adoption and also the performance of the overall product.

How to Improve Time to Value

If you are aware of the variables which affect time-to-value There are a variety of steps that you can do to enhance it. These include:

   The process of identifying bottlenecks  

A bottleneck is a procedure or resource that hinders the rate of work from getting finished. The first step in improving the time-to-value is to identify these bottlenecks, so you can reduce or eliminate these bottlenecks.

Identifying and removing these obstacles can ensure that clients get the best value of your product quickly, without needing to endure a lengthy introduction process.

   Increasing online education  

   Streamlining processes  

It shouldn't be a problem when customers are purchasing your product or services. The streamlining of processes, such as the entry of payment information or shipping information can reduce the amount of time needed for them to receive the product, and then begin making use of it.

In the event that it is not, the TTV will be extended while customers await their new product to installation, and setting up their environment.

   Improving customer support  

The moment a customer has an issue and they have an issue, the TTV clock starts ticking. As long as it is taking them to solve their problem as well as the longer time they lose the ability access the product or service.

Being able to provide timely and reliable assistance to customers can significantly enhance your TTV and improve satisfaction with your customers in the long run.

   Investing in technologies  

To accomplish this to achieve this, implementing the appropriate technologies can be critical. Automating, artificial intelligence (AI), and machine learning are able to streamline processes, increase customer support and provide valuable insights on how your customers use your product to better optimize to maximize TTV.

How do I determine the Time Value of Time

This can be viewed from both perspective of the consumer and company.

   Company perspective  

The most common way to calculate time to value is to track the amount of revenue generated each month and measuring it against the expense for launching, creating, and keeping the service or product. The objective is to figure out when the revenue is greater than costs.

In other words, if you invested $1,000 in developing a new website, but it took you three months to get it to bring in $1,001 revenue, then your TTV will be 3 months.

   Consumer perspective  

However, the TTV calculation for a particular product is determined by the journey of a customer. When you reach milestones such as first value, productivity, extra value, loyalty and more, you can measure how long it takes for a customer to realize the value that your service offers.

To estimate your average TTV, you must follow these steps:

  1. Make a list of all customers that have purchased your product or service in the past month.
  2. Track each customer's journey from initial purchase to realization of value, and note how long they took to complete every milestone.
  3. Calculate an average TTV from these results, which can later be used as a reference point for any future purchase or initiative.

If the number you see is excessive, think about the factors that could be influencing it and adjust your plan in line with the results.

How do I Track Time in Relation to Value

There's an array of ways to measure time-to-value, the use of standard software tools as well as custom-built solutions.

   Traditional analytics  

Numerous companies employ traditional tools for analytics like Google Analytics to track user behavior on their product or website. They are able to analyze customer journeys and calculate TTV for individual customers.

   Heatmaps  

Heatmaps are visualizations of the user's activity, which provide insights on how people engage with a specific website or feature of a product over an extended period of time. They are a great way to determine the amount of time it takes for customers to complete tasks, providing the time frame at which they are beginning to appreciate your product or service.

   User surveys  

Surveys can be another method for tracking time to value. They can be used to get feedback from users on their opinions about the quality of your product and the time it took them to see outcomes. It will give you valuable insights into customer experience and can help you identify areas for improvement.

   Testing A/B  

A/B testing is a reliable method of assessing the effects of changes in the course of. By running experiments and comparing different versions of a product, you will be able to quickly determine which features can help your customers see value faster.

   Support tickets  

Support tickets may also be used to measure the time-to-value. By tracking the resolution times for problems with customers, you are able to determine how quickly customers receive assistance, and seeing results from the product or service you offer.

Another method, such as interviews with customers and focus groups, can provide additional insight into the customer experience.

Time to Value Warning Notices

If you're tracking time in relation to value, it's crucial to look out for warning signs that suggest there's something wrong.

  • Scores of low customer satisfaction Surveys that show poor ratings or reviews can also indicate that customers are not getting the results they want from your product or service on time.
  • Long onboarding process: A prolonged onboarding process could indicate that your customers have difficulty comprehending the best way to utilize your service or product and could result in a long TTV.

Each of them will raise a red flag and make you look into what is causing the issue.

Time To Value Case Studies

Let's take a look at a few of case studies to see the ways in which time-to-value principles could be used in the real world.

   Later  

If you've ever been using Instagram You've likely seen Later. It's a tool that helps users run their Instagram accounts more efficiently, by making posts scheduled in advance as well as tracking the success of every post.

The company was able to speed up the process of getting customers to understand the worth of its products through the combination of better onboarding processes and education resources.

Suddenly, the time to value for users was considerably shortened, and the retention of customers went to the top of the list.

When they converted a conventional onboarding seminar into an online course the company noticed a 32% increase in retention as well as a 467% increase in feature acceptance. Paid subscriptions became more frequently purchased since customers recognized the value in Later quicker.

   Keap  

A complete customer relationship management, marketing automation, e-commerce, the analytics and payments platform, Keap's mission is to help small businesses to grow quickly.

It has a partner program that helps drive sales. However, a lengthy time-consuming onboarding process had caused delays and preventing potential partners from reaching the desired level.

Not only did it reduce its TTV for Keap and each partner, it added excess value through more thorough training and educating partners on the platform.

Conclusion

Both for consumers and businesses, TTV is a critical measurement to know. Without a realistic time to value, companies risk leaving money on the table, and consumers may fail to realize their objectives.

Through establishing a strategy to find bottlenecks, and then investing in online training to ensure that your service or product is available for use as soon as you can. This can help you maximize ROI and create long-lasting value for everyone involved.