Updated: Dec 31, 2020
Have you heard of first value? Do you measure it? First value is an important metric that helps you reduce customer churn, increase revenue, and improve revenue recognition at your company. Yet, it’s pretty rare to find a company that measures first value. In fact, in an onboarding survey I conducted in 2019, less then 47% of respondents track the time it takes customers to reach first value in their products.
In my article, First Value. Avoiding the Trough of Disillusionment, I describe what first value is, and why it’s important to keep customers from falling into the “trough of disillusionment.” The trough, shown in the image below, results from ad hoc onboarding and long implementations. Since first value drives other metrics like recurring revenue, renewals, and net retention, I suggest you take this metric seriously. Once you find out what first value means for your customers, then explore the seven ways I recommend to decrease the time it takes to reach first value.
How to determine first value
While ideally you have a different first value metric for each product and customer segment, I recommend you start with a basic first value. In the article Why You Need a Faster Time to Value, Becky Tucker from Proposify shares, "The way to achieve first value quickly is to require customers to do things that are important to them and that don’t take much time and effort." Consider milestones and deliverables that quickly demonstrate benefit to customers in one segment or for one product. Some people call this benefit the first ‘aha!’ moment users have with your product. For example, according to Baremetrics, Dropbox’s first value is the initial time customers add a file to their shared folder. Facebook defines first value when a user connects with 10 friends in the first week after signup. Be aware, however, that ‘aha’ moments are more obvious for consumer products than for B2B software platforms.
It’s up to you to make it obvious when customers reach first value. Even when it takes weeks or months to deploy your software, reveal meaningful insights and deliverables for customers along the way. You might conclude that first value for your customers is completing their first workflow, or a percentage of users active in the system. And those metrics could demonstrate to your company that customers are engaged and even loyal. However, how do you know those activities demonstrate first value to your customers? You don’t. First value is not about the value you want to deliver, it’s about what resonates for users. That’s why, even if you hire me to tell you what your first value is, I can’t. At one company I worked with, the team was excited to have users log into the system for a way to reach first value. However, logging in to your software does not provide value.
You reveal first value by listening to customers. I like to interview at least five to ten customers in a particular segment or users of a unique product, and then see what trends appear. Explore what’s important to customers by asking them the following:
How do you know you achieve value in your product?
Do you have an ‘aha!’ moment? If so, what is it and how do you arrive at ‘aha?’
How long does it take to achieve value or ‘aha?’
What are the obstacles that prevent you from reaching first value?
What tools do you need to reach first value quickly?
While listening to their answers uncover the metrics that justify the time, effort, and funding they allocate to your solution, then describe first value in their terms. At the company I worked with, we interviewed customers and uncovered their immediate need for automated reports.
How to decrease time to first value
Once you know what’s essential to customers and how long it takes them to get there, next explore how to decrease that time. In the article Should CS Care about Fastest Time-to-Value?, Shreesha Ramdas, SVP & GM at Medallia Strikedeck emphasizes, "The way to create positive experiences around your product is to make your customers reach the Time to First Value at the earliest possible moment. When customers quickly identify the value you deliver, they stick around long enough to have a high lifetime value.” The quicker you drive customers to wins in your product the higher customer loyalty, retention, and revenue grow.
My orchestrated onboarding framework is designed to guide your customers to reach first value quickly. Leverage these seven aspects of orchestrated onboarding to decrease the time it takes your customers to reach first value:
Success plans Partner with customers to capture their objectives during the buyer journey and in the early stages of onboarding. Specifically identify and agree what their first value is in their success plan.
Quick wins: With quick wins you rapidly guide customers to value in your product, even when the product isn’t fully implemented. Quick wins are achievable nuggets that provide first value or are steps to first value.
In-app guidance: I often recommend in app guidance as a way for users to reach value in your product quickly. Consider tools like WalkMe, Pendo, Appcues, Userlane, or Whatfix to guide new users to key milestones in your product, like sharing a workflow or creating automated alerts.
Learning pathways: Prescriptive, role-based learning pathways enable users to rapidly learn and adopt your product. While CSMs may step in for human interactions, scalable training resources move customer towards first value at their own pace.
High, low, and tech-touch programs: Provide the right touch at the right time for the right customer segment. Learning pathways and in-app guidance are great low and tech-touch approaches
Phased deployments: Since long deployments delay first value and bring about the trough of disillusionment, chunk the implementation process into achievable components that provide value along the way. Phased deployments culminate in smooth and consistent customer journeys, shown in image below from Baremetrics; no troughs to fall in here!
Customer maturity model: When you throw everything at your customers at once, they get overwhelmed. Instead, define a maturity model that guides customers through your product or platform in a cohesive way, moving from basic to complex use cases, or basic modules to advanced ones.
In his article Time To Value: A Key Metric, Nello Franco, former SVP Customer Success at Talend shares, "Even if your solution can provide an order of magnitude return on investment, don’t try to get there all at once. Provide quick wins for your customers by phasing your deployment. A reasonable target time to first value (TTFV) should be measured in days or weeks (rather than months), depending on the complexity of the product and your onboarding process.”
At my previous company, the implementation journey was a long one, so we created a phased deployment and leveraged success plans and quick wins to swiftly drive customers to value. This approach kept momentum going throughout implementation and kept customers from falling into the “trough of disillusionment.” Once customers reached a basic value in our platform, we then guided them to more sophisticated use cases.
Bring first value front and center by tracking it as a key metric at your company. Start by learning what first value means for your customers. Then, capture a baseline for how long it takes customers to reach their first goal today. Next, incorporate success plans, quick wins, a phased deployment and the right resources and tools to ensure customers reach first value quickly. Your bottom line will be thankful.