Is it a smart idea to reduce the Time to First Value at any cost?
The onboarding myth
There are many companies that are trying to invest a number of resources in order to decrease, as greatly as possible, the time it takes to get users to the first value. There is also a lot of advice on the Internet that leads you to believe that you need to help users arrive at the first value as quickly as possible.
And it makes a lot of sense, right? If you get users to the first value faster it means you have higher chances of converting them.
But we are data-driven, and we want to back this with data.
We talked with a couple of our customers and asked them to let us investigate the correlation between the time it takes to get onboarded, to get to the first value, and conversion and retention rates.
Busting the myth
So, what we did was to calculate the time it takes for users to finish the onboarding, by simply accessing the time to onboard report from InnerTrends (How long does it take to onboard new users? report). We automatically got a distribution of the time that looks pretty much like this:
As you can see, most users finished the onboarding process in a short amount of time, but then there is a long tail of users that took much longer to finish the onboarding process, or get to the first value.
Now, what we’d expect from the advice we have on the Internet, is that those who get through the onboarding faster are much more likely to convert into paying customers and would have higher conversion rates, while the users from the long tail would have lower conversion rates and lower retention rates.
Well, surprise! The users that took much longer to finish the onboarding process, for five different companies that we analysed, had much higher conversion rates and much higher retention rates, sometimes even doubled.
Steps you can take in order to replicate this analysis:
1. Within InnerTrends, access the dedicated report which will automatically answer to the question: How long does it take to onboard new users?
2. Select an older period ( two months, if available) with at least 30 days. If you receive the answer that tells you we identified a common behaviour, then it will look similar to this:
3. At the bottom of this report, you’ll get a table with these ranges:
Click on each number and get the list of users behind them (drill-down). Then create a segment with each list of users.
4. In order to compare the retention rate of these segments, you can access this report: What is the retention of the onboarded users?
5. Select the same period you did in the time to onboard report.
6. Apply each segment and compare the retention rates of these cohorts.
7. In order to compare the conversion rate of these segments to/of reaching a goal, you can access this report: How many users reach a specific goal?
8. Select the same period you did in the time to onboard report.
9. Apply each segment and compare the conversion rates of these cohorts.