Time-to-First Sale (TTFS) refers to the period it takes from the moment a SaaS product is made available to a customer or partner to the first actual sale.
This metric is especially important in the SaaS world, as it helps businesses gauge how quickly their sales and marketing efforts can convert leads into paying customers. Whether you’re launching a new product or entering a new market, TTFS provides insight into the speed at which your strategy starts generating revenue.
A shorter TTFS is generally an indicator that your product is being well-received and that your sales process is streamlined. It shows that your marketing campaigns, onboarding processes, and sales efforts are aligned efficiently, helping you bring in revenue more quickly.
How is Time-to-First Sale Calculated?
Calculating TTFS is fairly straightforward. You simply measure the time between when a lead is first acquired or a product becomes available, and the moment a sale is successfully completed.
For SaaS companies, this may vary depending on sales channels. For example, a product sold via self-service may have a much shorter TTFS than a product that requires hands-on demos or trials with sales teams. The TTFS calculation can be customized depending on whether you measure individual leads, channel partners, or specific marketing campaigns.
Why is TTFS Important?
Time-to-First Sale is a key performance metric because it impacts cash flow and scalability. A shorter TTFS means you can begin earning revenue quickly, which is critical for growing companies.
- Revenue forecasting: TTFS helps SaaS companies predict how quickly they will see returns on their sales and marketing investments.
- Customer satisfaction: A shorter TTFS often reflects how effectively a business can move prospects through its sales funnel, which can also lead to better customer satisfaction and loyalty.
- Scalability: Understanding your TTFS enables you to fine-tune your sales process, making it easier to scale operations while maintaining efficiency.
