Improving time to value (TTV), the length of time it takes a new customer to realise and extract value from a product or service, has to be a major priority for savvy retailers. Working with an experienced partner can enable the retailer to rapidly get to scale, be everywhere for customers, offer convenience, and deliver a frictionless experience. But why now?
By Peter Ludi, business development director at redPanda Software
In the past, retailers purchased perpetual licenses which resulted in massive sunk costs. TTV was not as critical. But thanks to advances in technology and customer churn being at an all-time high, this has changed.
Retailers and their customers have little patience when it comes to delays in realising value. Often, a strong relationship with a partner that looks at wider trends and the industry and consumer behaviours through a local market lens can have a significant impact on improving the TTV.
Importantly, shortening the TTV can result in improved customer retention as well as the acquisition of new ones. One of the ways this can be done is by aligning the retailer’s value to that of its customers. This is where the ‘secret sauce’ of a local service provider to augment or produce a solution comes in.
A local partner can make the solution or service relevant, intimate to the people using it, while efficiently delivering and maintaining it. Local partners also understand far better what customers will perceive as benefits.
Some of the by-products of gaining a proper understanding of TTV can include creating real metrics to benefit from, while breaking down the barriers between digital and brick-and-mortar silos. In doing so, the retailer will ensure all its teams can be aligned to deliver value.
Customer returns
A retailer’s customers want to feel that a product or service has immediate returns and validate their decision to make the purchase with them. For instance, a shopping app has many tangible benefits such as the customer not having to spend time and petrol to go to the store while battling queues in the checkout line.
For retail businesses, the TTV is more challenging to realise. Providing value to a customer in the shortest amount of time means increased customer satisfaction and therefore increased customer lifetime value.
The lower the TTV is, the faster the retailer’s customers experience the benefits. Winning loyalty, increasing productivity, and understanding market position are all key components of reducing TTV.
Many retailers will spend a fortune looking after an already loyal customer base. But considering that disposable income has fallen by up to 30% in South Africa, this is not the best strategy.
Retailers must therefore not invest in what they have, but rather in winning more business in different use case segments. They must focus on initiatives that target the right customer set. This means going after projects that will replace and supplement the fall in spending by the loyal customer base.
TTV can also help retailers experience some relief during these challenging economic times. One example, and a way of supporting the supply chain efficiency, is by having visibility and predictability of results.
This is where the entire lifecycle from manufacturing to the wholesaler or micro-trader selling to the consumer becomes an integrated environment. Working with a partner that has the tools and apps to create a marketplace to deliver this value through a better understanding of data becomes crucial.
Given the global volatility we now face, being able to introduce more predictability into the supply chain is also important. Subscription services are a great example of protection for the cash-strapped consumer who can now plan and pre-allocate funds to weekly shopping delivery. The security of knowing that this is already there can deliver faster TTV.
Local benefits
Some of the key steps to consider is sourcing products and services locally. In this way, TTV can be realised quicker. Retailers should also work with partners to increase their visibility and improve collaboration. It is therefore not about stop-start short engagements, but rather about how to jointly become profitable through more targeted efforts.
Retailers realized a long time ago that they cannot afford to be everything to everyone. Looking at the local market, retailers should innovate quickly and have partners on hand to take the right steps with them on the path to shortened TTV. It is all about creating an intimate, frictionless experience to benefit retailers as well as their customers.
These benefits naturally require a nimble and trusted technology partner. This partner will respect their business and its unique needs. However, it is not about going with the most affordable option.
A specialised local technology partner is not the place to look for cost saving by reducing the operating costs for the retailer. This will create issues in the long term with the retailer having to reallocate valuable resources and we will lose people to the international market. This can have serious consequences in the future, and drive those costs up, not the intended result.
In short, reducing TTV is not a quick process. It requires focused investment and the willingness to adapt to a rapidly evolving marketplace. Yet the benefits can be transformative and can put retailers on the fast track to growth.