“It is time to” is a phrase we hear a lot every day. Like, you can say that every day we have moments to do something. So, I declare that it is time to learn a crucial term of the marketing process – time to market.
Learning what time to market means, why it is important, and how to calculate it is of utmost importance if you call yourself a tactful person and want to make your business work clockwork-like. Hence, it is time for you to continue reading this blog.
What is Time to Market?
Time to market, or sometimes called TTS, refers to the period between the time of initial designing of the product idea and the time of the product’s first purchase by the customers. Alternatively, time to market definition might stand for a service or a new update. It simply defines the period in which a product starts and completes its journey by reaching the customers.
Why does Time to Market matter?
This question has a very simple answer – competition! In our age of consumption and competition, you have to act fast. Everything changes, and people develop products rapidly. These people are also your competitors.
This indicates that your revenue is highly affected by the time to market and how well you optimize time to market. To give you an example, let us say that the launch of your product is delayed by three months. In those three months, your competitors will do whatever they can do to get revenue in the absence of you. Long story short, they will get the lion’s share of the total revenue.
Also, if you ever are to pay attention to the time to market, you can project the potential costs and resources needed. This will return better and more efficient resource management and fewer costs of production.
No one likes unpleasant surprises, and when you run a project, you want to minimize the chances of them. So, the time to market shows another benefit of it. You can plan your schedule ahead, and you will not be bothered by unpleasant surprises. Having a highly probable estimate of your schedule is possible with the help of calculating the time to market.
The final benefit of the time to market is the most obvious one. Since you calculate the time of your product’s launch, you are able to act fast and get more revenue from the product. This is because you will be amongst the first ones to act.
Time to Market Statistics and Benchmarks
There are several studies done on the effects of time of market across different industries. To better grasp time to market, you need to see how time to market – whether an optimized one or a non-optimized one – affects your business and revenue.
In a popular study done by McKinsey & Company – the world-renowned management consulting company – they found out that if you are late to market by six months, for the next five years, your earnings are 33% less than a “right on time” scenario. They also point out that if your time to market is right on the spot, however, you spend 50% more on the product than others, your revenue will only be affected by a 4% loss.
Here you can see the importance of time to market, again. Provided that you are late to market, you will experience effects that can’t be irreversible. On the other hand, in a scenario in which you are one of the first companies to put your product on the market, you will not lose as much as being late to the market. This holds true even if you spend more money than others.
Another striking statistic comes from research carried out by OakStone Partners – another management consulting firm. They point out that based on your product being a monopolistic or competitive product if you are late to market, your loss on Net Present Value (NPV) will be 15% to 35%.
Calculating Your Time to Market
Time to market is essentially a KPI; this entails that there should be a way to calculate it, right? Well, not precisely. See, you can calculate the time between the first day of designing and the first sales.
Let’s assume that you have started the designing process on the 18th of May 2020 and the first purchase happened on the 23rd of February 2022. If we don’t include the end date, your time to market is 9 months and 5 days.
6 Steps to Have a Faster Time to Market
If you are convinced that you should pay strict attention to time to market, you would want to know how to minimize it without having a product of low quality. The steps we will advise you to follow can be found below.
1- Optimize the Workflow
Your workflow is the first step you should optimize in order to get faster time to market. After you analyze your workflow, you will notice that there are some steps you can disregard and the bottlenecks that keep you away from accomplishing the tasks effectively.
2- Optimize Approval Process
The approval process is essential for every company; after all, it is the process that stakeholders and other executives of the company decide in favor of or against your product. Since it takes too many people involved in the process, the approval process cycle can take quite a long time.
The best thing to do in this scenario is to find ways to minimize the number of cycles in order to have a faster approval process – however, you should always keep in mind that this process has to be faster but not result in a lack of quality control.
3- Goals & KPIs
Being realistic is important when it comes to team projects – especially when you are leading that team. All the teams, companies, people, and stakeholders have goals in this process. The important thing here is to keep your goals as realistic as possible. The achievability of the goals and KPIs is significant because when your team achieves a goal, each individual will have a motivation refill. Otherwise, your team will resemble a group of people who have no hope concerning the goals and the ultimate aim.
Automation helps you to optimize the parts of the workflow that can be optimized to be less prone to human errors. These errors can encapsulate deadlines, misinformation, and so on.
Also, automating some processes can enhance communication. If the system handles these tasks, they can notify the employees automatically. This way, your employees will immediately know what is happening with the process and act upon it.
5- All in One
Generally speaking, there are multiple teams scattered around working on the same project. Each of the teams creates data, and these data points can be invaluable for other teams. To make your time to market shorter, you have to understand that the information produced by different teams should be accessible to anyone at any time.
This can be achieved by all the information systems, hubs, etc., integrated into one platform. This way, if one of your team members is to access the information, you will ensure that there should be no delays in the process.
6- Improvise, Adapt, Overcome
Finally, you can look into how well your team or teams adapt to the changes in the industry. Almost every industry is dynamic – this means that you and your team have to adapt to the changes presented to you immediately. If you are late to these changes, your time to market will be elongated to the degree that you will lose all the advantages of being the first.
That is why you should investigate the adaptiveness of your team and try to enhance it. However, adaptiveness is not a thing you can enhance by itself; there are multiple factors that contribute to it. Adjusting the tools and your workflow can be ways to improve your adaptiveness.
These tips can be achieved by switching your team’s structure. You can look at the blog post we have compared different team structure types in detail and find the best one that is fitting you.
Frequently Asked Questions
How do you use time to market in a sentence?
“Time to market is one of the key factors of how much revenue your product will bring to your company.”
What is time to market in Agile?
Time to market does not differ for Agile. It is the same thing. However, Agile is built upon reducing the time to market. So, for Agile, time to market may be more important than any other team structure.
What is time to market in project management?
Time to market defines the time gap between the first day of the designing process and the first time a customer purchases the product.
Is time to market a KPI?
Yes, it is essentially a KPI, simply because you have to consider two factors in order to find it – these are the date of the first day of design and the date of the first product purchase by the customers.