Getting started with product analytics: define business goals
With so many digital products available in today's world, ensuring that your users have an enjoyable experience with your app or website is critical: with all the alternatives that exist on the market, there is no need for them to use your product specifically.
Analyzing user journeys through your app provides a clear picture of where things are working and where they're not. Using Product Analytics, you can evaluate at scale what works and what doesn't in your app to help you improve user experiences, increase retention engagement, and ultimately keep your users happy over time.
In this series of articles, we'll begin by going through these topics:
Defining your business goals
What is Product Analytics?
Once your product starts gaining traction, there's no way you can talk to every single person who uses it or even watch them interact as your app usage expands.
Product analytics helps you see how people are using your product at scale. Based on these figures, you can start building better experiences based on the most common behaviors, patterns and flows through your product.
Every big company like Apple, Amazon, or Google uses many pieces of data sent to them to improve your experience over time (sometimes in edgy ways, but that's a topic for another time).
To clarify, when we hear the term "analytics," often the first thing that comes to mind is what we should call "marketing analytics".
There is a big difference between marketing analytics and product analytics.
Marketing analytics are what companies use to measure the effects of their marketing campaigns.
Product analytics helps you measure how customers interact with a company's products and how they behave with said products.
Marketing analytics is all about getting people to use your product. You need to understand how well your campaigns are doing and find ways to get more people interested in using your product.
Product analytics is figuring out how to improve people's experience with your product. If someone is using your app or website, you want to ensure they have a good time and keep coming back.
How to start Product Analytics?
One of the critical things in establishing a good product analytics strategy is to set business goals. This creates the foundation for determining what your company should use in product analytics and how you should implement your company’s analytics strategy.
Product analytics is about figuring out your business's goals and then finding ways to improve your product or experience to reach those goals.
To ensure that you're getting valuable insights for your business, we'll look at the business goals you set to provide a framework for your product analytics.
Defining your goals
Defining why you want to track data is the first step in building a product analytics strategy. You need to know what you want to achieve before you can start measuring and analyzing your product data.
Some common business goals that your company can achieve with product analytics are:
Improve user retention
Improve your onboarding experience
Reduce customer churn
Another reason why it is important to set business goals is because there are many things that you can track in your app. If you track every single one of those, it will take a lot of time and be expensive. You will end up with a lot of useless data and little insight.
By pinpointing your business goals, you can focus in on the data that will show the progress of your product (and ignore the useless data). This way, you can see what is working and what needs to be improved.
Some other examples of product-focused business goals include user activation, retention and engagement.
User activation is when a user’s interest has been activated and they start to use your product more independently.
User retention is also a fundamental goal to track. You want to ensure that your users are happy with your product and keep using it.
User engagement is another important goal. This includes how often users come back to your product, how long they use it for and what they do while using it.
All these goals are essential to track, but you must ensure that you track the right ones for your business.
To do this, you need to start by identifying your company's overall goals. Once you know what your company is trying to achieve, you can begin setting product-focused goals that will help you track your progress.
For example, let's take an email marketing app like Mailchimp or Mailerlite.
It is very likely that their overarching business goal is to help people better integrate emails into their overall marketing strategy.
So data that interests them could include the number of campaigns that are sent, the number of subscribers they have, and if they routinely use the application instead of just sending campaigns one shot.
While this is just an example, it can give you an idea of what to look for.
A common question at this point is: "how many business goals should I track?".
There is no correct answer: it depends on your company and its needs. There might be one, two or three things that you think are impacting your business.
If you are a small company just starting, you might want to focus on a couple of them. Our suggestion is to keep the number low so you can focus on consulting product analytics in your business plan.
As you start to scale that number could increase to multiple goals across several teams, resulting in many more goals, similar to those found in large product analytics implementation.
Once your business goals are clear, you can set up an implementation tracking plan.
It's a document that will help you and your technical team implement the tool of your choice in your product. If you need help with that, you can always book a call with one of our product analytics experts.
Thank you for reading! We hope this article helped get you started with product analytics. If you have any questions or comments, please feel free to contact us at email@example.com
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