Linear #022: Time To Value, Customer Acquisiton Hacks, Peter Thiel's Palantir
One vSaaS breakdown. One Biz Story. One 'How To'. In your inbox once a week.
One Vertical SaaS Breakdown:
They #1 Input To Customer Retention
Customer retention is the lifeblood of SaaS businesses.
But it's an output, and outputs don't mean sh*t without the right inputs.
The key "input" that drives strong customer retention:
Time to value is the #1 metric customer success teams need to be focused on. The longer it takes the more likely your customers churn off. The shorter the time to value the stronger the retention.
So what is time to value, exactly? Time to value (TTV) is the time it takes a customer to realize the value they were expecting of your product. Among SaaS companies, the value realization moment is also referred to as the “aha moment.
Let's look at some examples of how great SaaS companies measure time to value...
#1. Dropbox Dropbox's time to value metric is a user uploading a few files. Their UI is littered with encouragement and guides to upload your first file. Why?
By studying their data set, they've found that once a user uploads a few documents the likelihood of their churn goes WAYYYY down. The more documents they upload the less likely they are to ever leave. They track and measure this religiously.
#2. Bumble I recently heard the former COO of Bumble speak. She said the most important metric they measured was "successful conversations". What was a "successful" conversation? Trading phone numbers. They optimized EVERYTHING to create more successful conversations.
So how do you create your own time to value metric?
#1. Look at your ideal customers characteristics
How big are they? ie revenue, employee count, etc. What do they have in common? How long does it take to implement them? The list goes on...
#2. Study your most successful customers
What makes them successful? How long did it take them to implement? What makes them different from our unsuccessful customers?
#3. Study your least successful customers
What has made them them NOT successful? How long did it take them to implement? What makes them different from our successful customers?
#4. Pick something and iterate it as you learn more
Start-ups are about speed. You have to act with little data often. Make a call and implement. Change and iterate as you learn more. Being paralyzed as a start-up = dying.
Now that you have your metric, you MUST hold employees accountable to it. How to do that? Compensation.
Money talks. Money drives behavior. Bonus people out quarterly on time to value & have them track it weekly. Then watch what happens to your customer retention.
But it's not enough to just track and compensate Time To Value. You have to constantly improve it in the product. How to do that?
#1. Develop UI/UX that drives faster TTV
When you know what makes a customer successful, your product should guide them to achieve that as FAST AS POSSIBLE.
#2. Customer Success teams should make the TTV goal a key part of onboarding.
The focus of your implementation plans, schedules, GAANT's, etc. should all be centered around getting your customer to that magic "aha!" moment. Tailor customer success around this.
#3. Become a broken record about it
One of the core jobs of the CEO is repeating the important things over and over again. Talk about TTV in every all hands, stand-up, etc. Constantly poke/prod/ask questions about it.
In summary...
The magic formula:
Strong time to value = High customer retention. St
rong customer retention is the 8th wonder of the world.
One ‘How To’:
Customer Acquisition Hacks
One Biz Story:
Peter Thiel’s Palantir
