SaaS | 8 MIN READ

A Guide to User Behavior Analytics for SaaS

Learn what user behavior analytics is, how it is different from business analytics and more. A complete Guide for SaaS business.

Surojit Ain
Aug 10, 2021

A-Guide-to-User-Behavior-Analytics-for-SaaS

User Behavior Analytics

What makes for a successful business in a customer-focused economy? A world where eCommerce is ruling and online shopping/transactions are the norms? Where market competition is fierce, the buyer has a lot of choices and significantly less patience? We could come up with a dozen points of what works here, but all of them will converge at one word: data. It is especially true of SaaS products – where the value in an intangible implication that adoption could lead to better practices and revenue growth.

The key to building successful service/products is data. User behavior data – that gives us the knowledge about what people do, or rather, don’t do, so that we can provide them the service or product that they’ll value the most. How will you perfect your software? By studying what people do with it, how they use it, their experience, the pain points, etc. That’s why behavior analytics forms the core function for SaaS.

What is behavioral analytics?

Also referred to as product analytics, behavioral analytics is the entire process of segmenting and sorting user patterns to figure out how to add value to what you’ve already offered him. Separating these behavior patterns into different funnels to create behavioral cohorts, analyzing how customer drifts, engagement, retention and conversion change, why they change, etc, helps fine-tune your services according to user demands.

How is it different from business analytics in general?

Of course, you need all kinds of analytics, from financial to vendor mapping, to grow your business these days. But behavioral analytics is different. It focuses only on your potential and current customers. From segmenting your users and tracking what they do with your service from the moment they land on your site, behavioral analytics follows every customer’s entire journey with you. Mapping, coding, tracking sessions and events, collating data and essential information creates a persona for every user. This allows you to build mind-blowing, personalized journeys for each one of them, making them feel special, and most importantly, valued.

When you view each customer journey as an anecdote, it will give you sales insights, plus help you improve your product/service, tweak marketing strategies, and more. It goes without saying you also need business insights, so your business analytics tools should be able to integrate business data to give you a complete picture.

When should you use behavioral analytics?

Right from the beginning! Especially if you are into SaaS, behavior analytics has the potential to make or break your business. Whether you are a B2B SaaS or B2C, what will be your two primary goals?

  • New users acquisition
  • User retention

Right? And irrespective of your business model, you must know that the more you increase the above figures and reduce churn, the more successful your business would be. And the key to increasing acquisition and retention? User behavior data! It can tell you how the user is using your product and when he drops off; it will give you critical insights on how to handhold him to help him achieve desired outcomes… and this personalized service is what SaaS models thrive on.

What answers can you get using behavioral analytics?

This depends on what answers you are seeking to questions specific to your business and the customer scenario. For example, you could be in an eCommerce business and want drop-off data or the type of products your customer prefers to be highlighted. Your behavioral analytics tool can be tweaked to provide user-level data for these things. However, there are a set of questions you can start with to get a view of how your customers are using your service or product.

  • How do visitors come to your site?
  • Where do they click the most?
  • Which product/service do they check out?
  • At what point do they get stuck?
  • At which stage do they drop off?
  • Do they open and read emails?
  • Do they react to your marketing methods?
  • Which of your ads are most effective?
  • Which medium of communication (WhatsApp, email, FB Messenger, etc.) works best with your consumers?
  • How long does it take for them to convert after the first click?
  • If you modify your site/service or product, how do users react to new features?
  • What is the most received feedback about your service/product?

So, you see, behavioral analysis is much more than running your data through a few business tools. You need to know the right questions that will help you achieve success and deliver his successes to the customer. So, once your organization adopts a customer-first mindset, all departments must identify paths they expect users to take.

So now you have understood the importance of behavioral analytics for SaaS businesses. But how to get there? What are the best practice procedures to use it to convert potential customers?

How to implement behavioral analysis for success

This is not easy, for there’s no ‘common pool’ or a set of ‘dos and don’ts’ that applies to all. You must identify what customer behavior you should track to convert and retain customers. It could involve several optimizations within your organization at multiple levels. You will also have to tweak manpowered tasks into strategic behavioral fits (for example, who in the team will set the goals, who’s going to track, who will do the analysis part of it, etc. You’ll have to ensure all teams and departments in your company collaborate and support each other to achieve success. So, how do you do this?

  • Set the right goals, and then set KPIs and growth metrics to reach those goals to ensure max growth. This means if you have a subscription-based SaaS model, the apparent track should be on paid subscriber growth so that you can plan to change it. 
  • Clearly define a successful user journey for you: Each customer’s journey with your app or service should result in a desirable outcome for your business. So, it makes sense to track every event that can lead to the desired outcome.
  • How to track? It would help if you had a thought-out tracking strategy. The plan should include user flow (For an online shopper, this would be the first click until payment gateway) and be revision-friendly. Also, since most SaaS products are built for multiple platform usage, unique user identification is important.
  • Get your entire company to collaborate. Product, marketing, sales, analytics,even stakeholders to understand what metrics you are mapping and how the reports need to be generated to let the data tell you what’s happening.

How to apply the results of behavioral analytics

At the end of the day, any data is only as good as you interpret it. For behavioral data to work, you begin with tracking the right things for your business, and then, you need to decode all that data into actionable points. The most crucial thing in behavioral information is figuring out what it’s trying to tell you – and tweak your strategies and products in accordance with that.

Once you’ve sorted and read the data, understood what it’s trying to tell, it’s time to apply it to see if it impacts your results. Please create a new KPI, segment customer information, experiment with the new deduced set of metrics, test them on customers and funnels, as well as behavioral cohorts. Set a period to test the market – the results will give you a clear picture of where you’re headed and tell you how to better your wares.

To wrap up

The one thing we haven’t touched upon till now is choosing the right behavioral analytics provider. There are many players out there offering versatile plug-in models that give quick results. But take your time to decide, think over what it is you need your behavioral analytics dashboard to look like and look for easy API integrations for those functions in the software. It’s advisable to go for software that you can adapt into your existing platform rather than a complete makeover – risk factor notwithstanding, it can be expensive.

The tools you must look out for could be:

  • Real-time data access to multiple queries
  • Automated user and event data points capturing
  • Strong report building structures such cohorts and funnels
  • Data visualization
  • Automated notifications

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Originally Published August 10th, 2021, Updated August 10th, 2021

Surojit Ain

Surojit has over 15 years of experience in quality and implementations. He is a promoter of an extremely light and efficient Agile process to fit business needs. In his prior role as product owner, he built a robust product in a very short span of time.

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