A Simple Guide to Increasing Customer Lifetime Value: Focus on the First 5 Minutes

Several years ago I was fortunate enough to work at Microsoft and take part in a fun usability study. We had two rooms, a one-way mirror, and a simple theory: If the start-up time of an application was faster, customers would have a much better impression of the overall experience (even if the application was the same in all other ways).

The Experiment

We had two versions of an app. One had a 5-second launch time and the other had an artificially increased launch time of 15 seconds. The delay impacted ONLY the start-up of the app. The test went on for 30 minutes after the application launch. The user never had to open the app a second time. The rest of the app experience and tests were identical, but the customer perceptions were not. :)

the first five seconds

The results were amazing. People in the “delayed launch” group reported lockups and performance issues throughout the tasks they had to complete. You could see them getting visibly frustrated. They had more difficulty completing the rest of the tests after the lengthier start-up time. They universally gave the slow-launching application poor scores (in comparison) for performance, usability, and general satisfaction for every part of the test. This was an application that was identical for 29 minutes and 45 seconds of the experiment … and they hated it.

The First 5 Minutes Matter

First impressions matter; and it goes beyond website and app start-up performance. When someone starts using a new product, they want to see immediate results. This gives them the impression that they could be even more successful as time goes on. If the first 5 minutes are painful, then the rest of the experience will be colored by a bad first impression as we saw in the experiment above.

The good news is that, on the web, you can identify, measure, track, and improve this experience. At KickoffLabs we’ve seen investments in the first 5 minutes drive significant improvements in overall conversion rates and lifetime customer value. Both have increased by 50%. How did we drive these improvements?

Plan the Users’ First Five Minutes for Them

We started by identifying our ideal users’ first 5 minutes. The “clock” starts at their first impression. If someone sees an ad on Google about your product, that advertisement just became their first impression. What does this person see on your landing page? How do they sign up? What’s their onboarding and first usage experience?

You need to walk through your ideal “happy path” of the customers’ first 5 minutes. Imagine what success after success looks like for the user with your product. They might click over to your website, read more, register for your free experience, activate the product, take your product tour, and complete a simple task you’ve laid out for them.

An Example Based on Our “First 5”

Here are the first 5 minutes of the funnel we at KickoffLabs set out to measure and improve with the help of KISSmetrics:

0. Saw an Ad: If paid acquisition is one of the main ways you attract customers, then start here for some perspective. This helps you understand what the user expects when they get to your site.

saw an ad in Google

1. Visited Site: We start here since improving the marketing materials is paramount to improving our initial conversion rate. If the landing page matches the ad, you’ll have more success.

visited home page

2. Signed Up: At this time, all of our customers have to start with the free plan. So we simply require them to sign up with an email address and password. The conversion rate to this step tells us how effective our marketing and sign-up pages are.

3. Activated: Since we’re a free service that lets people publish to the internet, we want to ensure we’re dealing with real people. So our activation step includes verifying an email address by clicking on a confirmation email.

4. Viewed Themes: Do visitors view the landing page templates they can choose? Since this is the first step after verification, this helps tell us if people have been turned off by their first impression of our administration tool.

viewed themes

5. Created a Landing Page: When people go from viewing themes to creating a landing page, it tells us people like one of the themes enough to start creating a landing page. If there was a huge drop-off here, it would tell us that people don’t like the selection of themes they see or how they are presented.

6. Saved Landing Page: Once someone creates a landing page, they go into our page editor. If people save a landing page without dropping out, then we know they had some success with the page editor.

kickoff labs

7. Published Landing Page: When customers feel successful enough with our page editor, they publish a landing page to the internet with our service. The more quickly people take this step, the easier we’re making their lives, and the higher their perceived value of our application.

Measure Your First Five Minutes like a Sales Funnel

After designing this first five minute walk through, we hooked up the events to KISSmetrics so we could measure and improve the experience. Because of this, we were able to understand if product changes we made impacted the first five minutes. We were no longer just guessing when we made changes. We could measure the impact and experiment with our onboarding experience.

Here’s what a simplified version of that funnel looks like in KISSmetrics:

kissmetrics funnel

Measure Drop Off and Test Improvements

Once you have this funnel measured, it’s critical to start acting on the data. You’ll learn quickly where you have the highest drop-off rate. Knowing this helps you prioritize all the work you could be doing within the first 5 minutes of your user experience. Using the chart above as an example, we concluded:

  1. We were losing a lot of people between the sign-up and activation steps.
  2. Most people who activated their accounts were creating a page.
  3. We saw the biggest drop off between creating and publishing pages.

From those three observations, we were able to:

  • Clean up the activation experience so that our welcome page explained, more clearly, what visitors needed to do and why we required the activation.
  • Ignore spending time creating new themes or changing our theme selection interface.
  • Survey some of the users who didn’t publish their pages and discover some root causes. One cause was simply that the publish button wasn’t as obvious as it could have been as a next step.

After making these observations, we were able to create new tests designed to reduce the drop-off rate at each step in our first 5 minutes.

How did this help? As the drop-off rates decreased, we saw dramatic improvements in the number of customers willing to upgrade to the paid version of our product. Customers who came through after we’d made improvements to the first 5 minutes also tended to stick around longer.

Next Steps

You can see that we relied both on raw data and informal surveys to determine how we could best improve. Once you start doing this, you’ll realize that some parts of the experience you provide are low hanging fruit and others will require a deeper dive to discover the simplest improvements you can make.

In our case, there could have been a LOT of reasons why people weren’t publishing their pages. We had to survey users to learn more, but at least we knew who to ask and what questions to ask because of the data we’d gathered in KISSmetrics.

Anyone can do this. Our case, of course, applies specifically to a freemium SaaS application, but the same principles could be applied to an ecommerce site as well. Imagine someone coming to your site, searching for the product they want to buy, adding it to their shopping cart, entering the credit card information, and making the purchase.

So go forth, identify your ideal customers’ first 5 minutes, and start making them more successful. And, yes, it will help if your website and landing pages load quickly and generate a great first impression.

About the Author: Josh Ledgard is the co-founder of KickoffLabs. He’s fanatical about his family, baseball, and making marketing simpler. You can read more of his posts on the KickoffLabs blog, at Landing Pages 107, and his personal blog. Follow him on Twitter @joshaledgard.

  1. Excellent article.
    Yo aprecio mucho lo que escriben, en verdad se aprende bastante.
    Gracias.

    • Its always important to experiment and measure consistently when optimizing the site for usability. User behavior is what requires more attention to get useful insights.

  2. Very useful article. I do agree that first impression is the last impression and 5 minutes in terms of average time per visit could be very critical for any website.

    Although I have noticed that most of the conversion on the client websites that I work for happen after a lot of page visit and time spent (sometimes 5 times the site average)

    But again more often than not a person who spends 5 minutes after visit is more likely to visit more pages and spend greater time thus leading to conversions.

    Of course funnels could be of great use when it comes to optimization of your exit pages or to find out likely reasons for exit. You have suggested a very good way to find out these “bad user experiences” through surveys.

    Do you think site surveys as Google is now offering could be of help especially when I don’t have the email id of my user?

  3. I totally agree with you, Josh.

    The first 5 minutes after your customer purchases from you, or even comes into contact with you for the first time is extremely important and leaves a lasting impression of how they’ll perceive you throughout the duration of your relationship.

    I aim to make my readers/customers first 5 minutes as pleasant as possible. I think the best way to do that is to infuse your personality into your communication with them, being friendly and letting them know that you’re here for them should they need anything.

    I do this by live video. Video is the closet way to “virtually” meet your readers/customers face-to-face and engage them in a way that text can’t – breaking down the cold barrier that can come along with the internet.

    This isn’t my first time visiting KISSmetrics, Josh; however this is my first time leaving a comment. I’m glad to have stumbled across your content. I’ll be sure to share it with my social circle. :)

    Ti

    • Thanks for the feedback and for sharing this article. I agree that injecting your personality is a critical part of it. We’ve tended to try and do so through words than video, however, since a much lower % of people will actually watch. But both methods target a different segment of your audience. Some will prefer to read while others want to watch.

  4. Bruce Brownlee Jul 25, 2013 at 1:20 pm

    In the early 90′s we published Amí Professional, one of the very first Windows word processing tools (later became Lotus Word Pro).

    Installs required many diskettes and the right wind direction.

    We found that not only did shorter, crisper installs cut down on installation support calls, but it also reduced product lifetime support calls.

    First impressions still count, so that’s why it’s a bad idea to leave the install to whatever leftover code was used in the dev environment. Installations, and website landing pages, are an emotional experience worthy of investment.

    Better to spend time on the initial experience than on expanding the glossary or adding dopey image rotators.

  5. Quite insightful, but for consumer app, I think that time is probably 1-2 mins at most. Consumers aren’t as patient as enterprise users, no?

    • I think it depends on the nature of the app. A fart App – for example – someone will know in 5 seconds if on version works better than another.

      But look to Runkeeper as a fitness app for example. Sure – they may get some people that download the app, open it, and never track a run. But their first “five minutes” should take people through tracking their entire first activity.

  6. Hi!

    It´s a nice article. We are going to make an exercise like that in Cuba with a large sample.
    We have a lot of customers daily. We´ll public the results.

    Thanks!

  7. Thanks for your article. Surveys are great tools if used correctly by using the questions listed chords to a certain topic.

  8. Excellent article. They gave me a great idea that I plan to put into practice very soon. Thank you

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