Everybody wants value. Whether at the grocery store, buying software, or buying a car, you want to feel like you're getting great value. But value isn't just about getting a price lower. It's about getting more, unlocking extra value, and going above and beyond your expectations.
We often think of it as a lower price because we think of something as a fixed commodity with a certain inherent value. And if we get it for less money, the better. However, delivering value is a little bit different in the software world. It can be a little bit harder for folks to realize value when they've already paid for the product - it's not as easy as getting into that fancy new car and having that great first experience!
The Journey to Value
Understanding the journey to value demonstration moments is important because it has huge effects on retention, loyalty, and customer satisfaction. You need to have a coherent strategy in place to deliver users great experiences at all stages of their interaction within your product.
Without a coherent strategy that drives users toward value moments quickly, you can never capture them entirely because of that version of the system.
The Value Realization Process
Helping users reach value has several stages. It starts from the first moment they interact with your product and continues until they make a churn or renewal decision.
Let's discuss a few key moments in the value realization journey. Inherently, this must start with onboarding because users have to go through the flow to get to value.
#1 - Importance of Onboarding
Ensuring you have an easy-to-navigate and intuitive onboarding flow is super important, but it can be harder than you think to deploy.
That is, if you lack a coherent strategy and powerful software that helps you deliver great onboarding experiences.
More on that later!
#2 - Meaty Middle
But value realization doesn't just mean that initial Aha moment or that Wow factor when onboarding a product. Instead, it's something that you have to work on consistently as users fully adopt your product, become activated, and engage with it. It's important to think about your user's lifecycle, not just at the start of their onboarding and at the end of a churn or renewal decision, but rather as a meaty middle that makes up most of their interactions with your product.
Yes, those first impressions and final decisions matter a lot, but the meat in the middle is also crucial.
To serve users in that meaty middle, you must have an in-app messaging strategy and engagement approach that matches that user's specific needs and wants. You need to have clear segmentation across different user demographics, use cases, and engagement levels, and you must make sure that you have an internal team strategy that doesn't overwhelm users with different messaging surveys.
#3 - Renewal and Retention Strategy
After that meaty middle, we come to that all-important retention or churn decision, where folks determine whether they have seen enough value in your product over the past month, six months, 12 months, and so on. This is obviously critical to sustained business growth and your ARR increase, and it's critical that you have a strategy here that combines data and engagement.
How to Measure Value Realization over Time
It's important to constantly be collecting data on and surveying for value realization because just as you might want users to renew, insure, and otherwise engage from a positive level, it's super critical that you also make an effort to improve your negative users' experience (lack of value) and learn what's causing churn.
How can you increase usage and upsell to positive users, and how can you deal with negative users and stop them from churning in the first place? By having great data collection in place that keeps you informed and allows you to proactively act instead of being reactive.
Key Metrics for Value Realization
Let’s talk about some of the most important metrics to measure value realization.
Time to Value (TTV)
One of the most important metrics for understanding value realization is Time to Value (TTV). This measures how quickly users experience value within your product. TTV can be subjective, based on actions like completing onboarding, inviting co-workers, or using a feature. Setting multiple TTV metrics across different features can help you measure success more comprehensively.
Net Promoter Score (NPS)
Another great metric to use is NPS. While Net Promoter Score gets a lot of hate because of how generic it can be, it is still important to understand how your product is used at a general level.
Are folks who promote your brand giving you a 9 out of 10? Are they reasonably neutral, giving you a 7 or 8? Or are they detractors who don't feel any affinity or even compensation towards your brand and give you a 0 out of 6?
Even more critical is segmenting out these responses to identify if there are trends within your NPS data to see where folks are not consistently finding value. For example, you might find that while your power users are very satisfied because they have learned the ins and outs of your products, most users are more casual and frustrated because they don't understand how to use certain features very effectively. In this case, that insight can help you improve your product documentation and have more product walkthroughs and tutorials in place.
Customer Health Score
Another great metric to consider is the customer health score. This is an amalgamated metric that examines engagement and nuisance data to understand how people are using your product and how they compare to one another.
In this case, you might use high scores in the 80-plus or 90-plus range to indicate value delivery. And if that's not the case, then you can say that they're unhealthy or do not see value.
Customer Lifetime Value (CLTV)
Customer Lifetime Value, or CLTV, is another great metric for determining the actual value users are driving for your business.
We talked about value utilization, but in this case, you're trying to understand how much each customer is driving in terms of long-term revenue, and this is more of an internal-facing metric.
Improving Value Realization
So now, let's discuss some ways that you can improve value realization and accelerate it in different parts of your product.
First of all, let's go back to onboarding. Having a personalized and tailored onboarding is a multi-step process. You can't just personalize on the fly; you need to have systems in place.
Using Command AI for Onboarding
One of the best ways to improve your onboarding is through a tool like Command AI, which allows you to personalize your onboarding level to your onboarding and better serve users the right way.
This helps you minimize time to value and increases the likelihood that folks will have a hard time.
For example, you can use a product tour to orient users during their first interaction with your product. This should be straightforward and simple, and use the minimal number of steps needed to get information across.
Or, you can go with a checklist, which you can leave as a more optional guide which folks can refer back to.
Scaling Personalized Onboarding
One of the reasons it's important to use experiences like product tours and checklists is because as your business scales and your user base grows, you need to be able to scale and automate your onboarding as well.
You may be able to onboard your startup's first couple dozen users quickly, but once you get to scale, you need to have a system in place.
Build Cohorts & Tailored Experiences
In the first place, you need to ask the right questions. Yes, you want it not to be too lengthy and only ask for the core information, but make sure that you're gathering the correct demographic and other information to segment users into different cohorts.
What one user might want to do with your product and might have experience with it in the space could be very different from another, and thus, the level of tutorials and engagement you need to serve them could vary greatly.
So, make sure you ask the right questions, and then once you do ask those questions, create different cohorts and unique experiences, checklists, and tutorials within Command AI to serve those users most effectively.
For example, once you have a nudge or feature announcement that you want to send out, you don't need to blanket it to your entire user base. You can use targeting to ensure that the who where and when is accurate for the specific announcement!
AI + Human Support
Our Copilot can be trained on your help documentation and can easily answer questions for your users, deflecting tickets and saving you time and money will also providing a great user experience.
But while we're big believers in AI and what tools like Copilot can do, it's really important to have a human element here as well. Your customer success team is critical to ensuring that your new users find value.
This is especially true at more enterprise-level companies, where you might have several account managers who are having calls and onboarding folks.
But on the other hand, perhaps you're a small startup, and you don't have the resources for that. You can still have small things like Slack channels and easy access to customer support folks for your users. This helps drive home value and shows users that you're invested in their success.
What happens when you ignore important metrics? You create obstacles and failure!
Obstacles to Value Realization
Throughout my years in tech I've seen consistent obstacles to Value realization which don't have to be that way!
Failing to Turn Data into Action
All of your changes should be data-driven. You can use Command AI to run surveys and gather user behavior and user intent data, which can be helpful in crafting a product. But it has to be not just a collect-and-forget mentality but rather a collect-and-turn-into-insight mentality that really ensures that data becomes part of your product decision-making process.
This helps you turn all of that feedback into better products and avoid getting caught in a pit of complacency.
Poor Onboarding Experience
First of all, a poor onboarding experience can have a huge negative impact, leading to negative user experiences and poor value realization. Solving this is key.
Lack of Engagement
If you're not engaging with users through prompts, surveys, or questions in the application or are actively on your team, you're leaving a lot on the table and might not help folks toward that value realization moment.
Misaligned Expectations
When your users have misaligned expectations about what your product can do for them, they’re unlikely to find value. No amount of user support or in-app messaging can solve that mismatch. Setting the right expectations early is critical.
Not Utilizing Data Effectively
One of the biggest pitfalls is using only some of the data you collect in your product decision-making process. Collecting data, letting it sit, or glancing at it is straightforward. Still, the real value comes from bringing it into conversations with your engineering, product, and design teams to prioritize improvements.
Conclusion
Driving value realization and sustained engagement and retention of your users is about more than a smooth onboarding or a great deal on their subscription. It's about end-to-end high performance, with meaningful investment in understanding their needs, analyzing their data, and driving great experiences everyday of the year. While it's natural to obsess over onboarding and retention return, don't forget the meaty middle when you examined your value delivery!
