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Learn from this guide, what product analytics is, why is it useful, how to select the right product analytics tool for your company, and more.
Analytics has always been an integral part of marketing or sales. Though it has not always been a norm for the product management teams to use analytics, it needs to be made now. The current competitive business environment necessitates analytics for products as well.
Product analytics, in simplest terms, is the process of collecting and interpreting usage data about a business’s product. This is very useful in gaining an insight into customers’ experiences with your product and thereby finding your products’ strengths and weaknesses.
Any product selling business needs to invest resources in product analytics as it has multi-pronged benefits. The competition in the market is gaining more pace with every passing day. If a business wants to survive and thrive in the market, it needs to use all weapons in its arsenal, product analytics being an important one.
Product analytics, as a tool, helps you find the answer to two major business challenges –
In order to find answers to these challenges, you can target several questions through your product analytics strategy. Answers to all those questions will lead you to the answer to the above-mentioned business challenges. The target questions can be –
Product analytics is useful for persons involved in product creation processes, persons involved in sales and marketing processes, developers, and UX designers. , It is a process that benefits everybody starting from the product development stage to the end consumer.
Product managers or people involved in product designing get to understand customers’ needs and expectations and thus design a good product that sells.
People involved in sales and marketing are able to design their marketing campaigns very well when they know about customers’ behavior. They can create a more appealing sales pitch.
Designers and developers can easily solve the issues in their design if they know the pain points of customers. They don’t have to rely on the hit and trial method for creating a seamless design.
Customers get products that suit all their needs and fulfill their expectations. Product analytics is much helpful in enhancing customers’ experience with a product.
Google Analytics was practically the first analytics tool. Being a Google product, it automatically had leverage over the other analytics tool. But is it a good tool for product analytics in today’s competitive time? Well, Google Analytics was undoubtedly a good tool when it was launched and when websites were simple and almost static. Today websites are much more complex, and users need much deeper analytics. Simple page metrics and SEO metrics are not enough to stay in the ever-growing competition. However, Google Analytics can be a good tool if you use Google advertising and publishing products.
In a nutshell, you can use Google Analytics when you are just starting, but you cannot rely simply on the free features of Google Analytics when your business grows.
Product Analytics and Marketing Analytics are two interlinked but different concepts. Though some people use those terms interchangeably, both have some crucial differences.
Though investing in the product analytics tool is important, but one should not hurry in doing so. Any analytics, including product analytics, depends on the volume of data. If your business page or website is getting zero traffic, no product analytics tool can provide you any important data or analysis. So, first, you need to generate traffic for your business page or website. While you are attracting your first stream of visitors, you can spend time researching a tool that suits your need.
If your website is getting a steady flow of leads, say 100 unique visitors per day, then you should invest in a good product analytics tool as soon as possible. Please note that 100 is not a magic number here; the number will vary from industry to industry. You can also start with the free features of Google analytics and then switch to a better tool when you have some traffic.
Product Analytics Tools come with a long list of features, so it is necessary to understand what tool suits your specific need. The most common features offered by product analytics tools include –20
While choosing a product analytics tool for your business, you need to be laser-focused on your end goal. The product analytics tool brings you the answers, so you first need to have the list of questions you need to be answered by your analytics tool. You need to be very clear about the Key Performance Indicators (KPIs) you will be using to interpret your collected data. The best bet is to select a few tools based on their features and your needs and then use free demos to determine which suits you best. The majority of good product analytics tools provide a free demo because they are confident that people will pay for using their product.
Anshi has over 12 years of experience in demand generation, digital marketing, and managing global teams. In her prior role as head of marketing operations for a high growth US healthcare tech organization she transformed marketing from cost to revenue center.
Published 16 Sep 2021, Updated 16 Sep 2021
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