Product analytics is critical to your product's success. Without it, you won't have the data you need to drive profitable decisions.
This is because product analytics shows businesses what their customers actually do, by analyzing their actions within a product. These are called revealed behaviors and they're incredibly useful to understand user motivations, pain points and overall actions to better improve the product.
In today's data-driven world, the ability to analyze your product is critical.
This guide will help you answer some of the most common questions about product analytics.
What is product analytics?
Product analytics is a type of business intelligence that captures and analyzes usage patterns from digital products such as web and mobile applications. It uses event tracking, event properties, and event and property grouping to do this. This information is used to make decisions about how to improve the product experience, increase product engagement, and drive business outcomes.
This real-world data is more trustworthy than user surveys and product testing alone.
What's the difference between product analytics and marketing analytics?
Product analytics and marketing analytics are two related but distinct ideas. Although some people use the terms interchangeably, there are some significant differences between them.
- Marketing analytics is more focused with lead conversion, whereas product analytics is more concerned with user experience. A business is successful according to marketing analytics when it acquires a client. Product Analytics begins when a customer interacts with a product. It can be concluded that product analytics begins where marketing analytics finishes.
- Companies rely heavily on publicly available information for marketing analytics strategies. These strategies are of a generic nature. Product analytics, on the other hand, is based on user-generated information such as location, age, gender, and customer experience. It has a more specialized nature. Marketing analytics data for organizations in the same industry may be comparable, while product analytics data is unique to each business.
- Marketing analytics helps you attract customers and persuade them to buy. Product analytics, on the other hand, focuses on long-term client retention through better user experiences. Marketing analytics is geared towards the short term, while product analytics is geared towards the long term.
Why is product analytics important?
Businesses today need to adopt a digital-first approach to best serve their clients (and stay relevant). Software consumers want tools that are frictionless, intuitive, and delightful—whether they are using an application in their personal life or at work. To improve your digital product, begin by understanding how people interact with it. Product analytics provides a basic layer of data that businesses can utilize to assess and optimize their users' experiences.
It provides direction for product development and design
Product analytics is key to creating a great product. By tracking user events, you can get a clear picture of what customers use and don't use. This allows you to remove features that no one is using, making your product leaner, lighter and faster. Additionally, data analytics provides unbiased data that you can use to create better customer experiences and guide users to your most successful products.
Builds better relationships with customers
As we move further into the digital age, people are expecting a more personalized experience. The most effective way to figure out what your customers want is by using product analytics. Listening to the data will make your products more attractive to customers and build loyalty. According to Forbes, 74% of consumers are at least somewhat likely to make a purchase based solely on their experiences. With that in mind, businesses must invest in a tool that will assist them in creating a better customer journey, which will foster greater loyalty and eventually improve sales.
Who can benefit from product analytics?
Product analytics is all about making your product decisions better - whether you're looking at the short or long term. It can be a huge help for teams like Business Leaders, Product Managers, Product Engineers, and Product Designers, who all want to improve their product in different ways. And it doesn't stop there - Product Marketers and Customer Success can also use product analytics to get a better understanding of customers and their behavior.
All in all, product analytics is a powerful tool that can help you make your product even better.
What product analytics metrics should I track?
Product analytics is all about understanding customer behavior and trends. It's also about comprehending and visualizing user engagement and flows.
By analyzing product performance, you can improve your product over time. To measure product success, you need to figure out which metrics will be useful to your team.
Here are some of the top metrics that product analysts look at:
- Business objectives: Information about the performance of the company and its products.
- Product usage: Explains how users interact with your product and how the product team is moving forward with features and upgrades.
- Customer satisfaction: Metrics that help you determine whether or not customers are satisfied with their overall experience.
- Customer journey: The progression of the customer's product use and engagement with the brand.
How do I start usingproduct analytics?
Using product metrics to boost your sales and forge a more meaningful product experience might seem complicated, but the process is actually quite simple.
- Outline the goals: When creating a product, it's important for teams to be clear on why they're doing it. It's also critical to understand what business objectives the product is meant to achieve and what data will be gathered to show how well it performs. This data can help indicate things like the product's audience and if any future changes will be needed.
- Using the most effective tools available: There are numerous tools that provide user experience reports. Google Analytics, Amplitude, Kissmetrics, Mixpanel, and other popular ones are listed below. These are just a few options.
- Create a timeline of activities: Make a list of all the events you need to attend that are related to your goal. These actions include leaving a page, signing in, or removing an item from a cart.
How do product analytics platforms work?
A product analytics tool can help you figure out how people interact with your website or app. You can track clicks, page views, form fills, and other activities to see what people are doing and where they're going. You can also tailor the tool to report on your team's key KPIs and metrics.
Here are some common things an analytics platform can help with:
- Attribution analysis: Examine the customer touchpoints that result in a purchase.
- Funnel: To understand points of friction or churn, map the customers' journey through the buyer stages that lead to a goal.
- Conversion analysis: Analyze desired conversion actions or drop-off detection.
- Segmentation: To gain deeper insights, this can be achieved by dividing users into groups based on demographics, behavior, and other factors.
- Cohort analysis: Measuring user behavior over time by categorizing users into related groups or cohorts.
- Churn analysis: Examine the customer churn rate to learn what causes customers to leave.
- Retention analysis: Find out what makes customers stay. This is the opposite of churn.
When should my business consider investing in product analytics?
Product analytics can help your company whenever you want to influence and improve user experience.
Here's why you may need to use product analytics:
- When you're interested in the experiences your users have on your site and want to improve them.
- When you want to create a product that people like—or, better yet, love.
- Develop your data value chain, increase user retention and conversion rates, and reduce customer churn to properly scale.
- When you want to perfect your data storytelling and stay on top of the market.
We hope this article provided you with a good overview of the most important aspects of product analytics. We also hope that it will be sufficient for you to begin collecting and analyzing data on your own. However, we recognize that there is still much to be said about digital products and analytics.
If you're a product-led company or interested in pivoting into a product-led growth model, StaffGrabbers specializes in sourcing and recruiting all levels of Product Management, Product Design, Product Marketing and Product Analytics.
Reach out to us at firstname.lastname@example.org for a white glove recruiting experience.