If you’re like most business people, you understand the importance of data-driven decision-making. After all, who wants to make decisions based on guesswork or intuition when there’s hard data to guide them? But what if you don’t have a background in data analysis? What if you’re not sure where to start when it comes to finding the best product analytics tools? Don’t worry – we’ve got you covered.
In this blog post, we’ll show you some of the best product analytics tools available today. Whether you’re looking for something straightforward or something with more advanced features, we’ve got a tool that will fit your needs.
The Best Product Analytics Tools
There are a variety of different product analytics tools available on the market, each with its own set of features and benefits. Some of the more popular options include Google Analytics, Mixpanel, and Heap.
Ultimately, the best tool for you will depend on your specific needs and goals.
Why Product Analytics Matter
Building a product can be complicated. There are a ton of decisions that need to be made.
How do you determine which is right and wrong? And of all the right choices, which is better?
In the golden age of advertising, marketers claimed their methods were scientifically sound, but old sayings like this from department store magnate, John Wanamaker, tell another story: “I spend half of my marketing budget on ads that don’t work. The problem is, I don’t know what doesn’t work.”.
Data science provides much more accurate results than relying solely on experience and intuition. Product managers need data to make informed business decisions.
Instead of guessing, or relying on customer feedback, you can measure how successful you are at meeting the needs of your users.
You can track the performance of specific features of your product. You can make decisions about what to build based on metrics that support your broader business objectives.
Product analytics are important because they provide insights that can help you improve your product and the user experience. With analytics, you can track how users interact with your product, identify areas for improvement, and make data-driven decisions to improve your product.
Who Needs Product Analytics?
The data collected by product analytics can be analyzed by anyone who has to make decisions. The insights gained from analyzing this data can help anyone from stakeholders to marketers to developers. What decisions would you make if you had access to all the data?
Once you’ve gathered all the information you need, what additional questions do you have?
By measuring and analyzing user behavior, product managers can make informed, data-based decisions about their products. With this type of insight, they can create engaging, compelling, and personalized user experiences.
Marketing teams can see which marketing campaigns are bringing in the most traffic, and which of those are bringing in the visitors who are most likely to convert, and who are likely to stick around.
This information helps marketers to focus their efforts and makes product development more efficient.
The dev team can resolve issues, improve functionality, and squash pesky bugs that appear during testing without having to deploy more engineers.
By tracking user behavior, user experience (UX) professionals can see how users interact with a website or app, where they get confused, and where they abandon it. This information can help them design better user experiences.
With a growth manager, you can track users’ engagement with your app, so you can optimize their retention rates according to your business goals.
The benefits of using data analytics in product development are that it makes products easier to use, more enjoyable, and more likely to keep the customer satisfied.
What Can You Do with Product Analytics?
The AARR (Acquisition, Activation, Retention, Referral) model is a great way to measure and improve upon your product’s key performance indicators.
Acquisition: By analyzing your product data, you can gain a better understanding of which marketing channels and which users are most likely to convert. This knowledge will help you allocate your marketing budget more effectively.
Activation: Activation is the process of a user becoming a paying customer. Each of the breadcrumbs along this “trial trail” is known as a micro-conversion.
The “Aha! Moment” is the point at which a user realizes the value of your product.
Product analytics can help you to optimize your steps to create a more successful outcome.
Retention: Understanding your retention rate is incredibly important. Are your customers sticking around or are they leaving you?
Product analytics can help you track users to understand customer satisfaction and how to improve it. Additionally, product analytics can identify customers who are unhappy and provide insight on how to win them over.
Referral: Word-of-mouth marketing is one of the most effective forms of advertising. Are your buyers recommending your product or service to their friends?
Do they use social media? Or do they fall off?
Customer loyalty is incredibly important, and product analytics can help give you insight into how your customers use your products. This, in turn, allows you to improve the user experience and increase your customer retention rates.
By improving your funnel and retaining more customers, you can increase your revenue. By analyzing your customers’ actions and behavior, you can reduce customer acquisition costs and optimize your sales cycle.
How to Use a Product Analytics Platform
Good analytic software should give you the following capabilities:
Tracking: Automatically track what users do on your site and app.
Segmentation: Using segmentation, you can learn more about your users, including where they come from, and when.
Profile: With profiles, you can group users based on any set of parameters you choose.
Notification: Notifications allow you to keep product teams informed and users updated on the latest messaging and features. AB Testing ensures that the versions of these messages and features are effective before they are released.
Dashboards: Using dashboards, you can visualize data in ways that reveal useful information.
Funnels: Using funnels, you can test multiple conversion pathways.
Measurement: Measuring each feature of your mobile app allows you to evaluate how engaged users are with each.
Do I Need to Invest in Product Analytics?
Anytime you want to improve a user’s experience, you need product analytics.
If you want to build a product that people actually like, then listen up.
Your company should invest in product analytics when you have a clear idea of your target market and you are ready to start developing your MVP. User tests will help you determine whether your product is appealing to your target market and how you can improve it.
Mid-market companies that are looking to scale need to invest in product analytics. By doing so, they can develop their data value chain, increase user retention and conversion rates, and lower customer churn. All of these factors are essential for a company that wants to stay ahead of the competition.
Enterprise companies need product analytics to stay ahead of the competition. By using product analytics, they can perfect their data storytelling and ensure they continue to evolve with the market. Without product analytics, they risk being disrupted by younger companies who are hungry for market share.
What to Look for in a Product Analytics Tool
Your product analytics tool should be a key piece of your technology infrastructure.
But which factors should you consider when choosing an analytics tool that’s right for your business?
Some things to consider when looking for a product analytics tool include: whether the tool integrates with other tools you are using, the price of the tool, the features offered by the tool, and what data you need from the tool.
When you’re looking for a product analytics tool, it’s important to consider what features are most important to you. Many tools offer free demos or trials, which can help get a feel for how the tool works and whether it will be a good fit for your needs.
What Are the Most Important Metrics in Product Analytics Tools?
The most useful metric in any product analytic tool will vary depending on the team you are working for. Teams have different needs that influence the choice they make.
Metrics for Marketing and Sales Teams
The marketing department is focused on acquiring new customers. The same can be said for the sales department.
These key performance indicators (KPIs) are:
- Customer acquisition cost (CAC)
- Acquisition rate
- Conversion rate from trial to paid subscription
Metrics for Customer Success Teams
Customer success teams focus on retaining and growing their customers. Here are the key performance indicators (KPIs) they use to measure their success.
- Monthly Active Users (MAU)
- Daily Active Users (DAU)
- Net Promoter Score (NPS)
- Recurring Revenue (MRR or ARR)
- Churn rate
- Retention rate
Metrics for the Product Development Team
The development team wants to learn how customers are using the product, what’s working and what isn’t, and how to improve it.
- Product and feature usage
- Usage funnel: Which steps or interactions cause the users to drop off before they complete a flow, such as an in-app purchase?
- Dead ends
Best Analytics Tools
Now that we’ve covered why it’s so important to use data analytics in product management, let’s take a look at some of the most popular options on the market.
1. Google Analytics
Google Analytics was primarily used to track website traffic.
Google Analytics has become an increasingly valuable tool for product managers over time, as it provides robust insights that can be extremely helpful. The easy integration with other Google products is also a major plus.
Google Analytics is a powerful tool that can provide valuable insights into your website’s traffic and performance. However, it can be challenging to set up and interpret the data if you’re not familiar with web analytics.
If you’re already using other Google products, such as AdWords, Search Console, or Data Console, integration with Google Analytics will be seamless.
Since Google’s analytics tool is used by so many users, it’s easy to find help if you have questions or problems. But, keep in mind, that you can only track up to 5 million users for free.
If you need more than the free limit, you’ll have to join the premium program designed for larger enterprises.
If your subscription business relies on a software product, then you’ll definitely need a tool for tracking your metrics. One great option is Baremetrics which specializes in the unique needs of a subscription-based business model.
Subscription analytics platform, BareMetrics, provides users with a global overview of their subscriptions including refunds, annual recurring revenue, and annual run rate.
In addition, Baremetrics offers detailed dashboards for each of these metrics. This allows you to get a clear picture of your subscription business at a glance, and then dive into the details of specific areas that need attention.
This tool provides you with valuable insights into your customer base, so you can identify who is interacting with your products and how.
Additionally, it offers forecasts for three key areas: the future number of customers estimated recurring revenue based on the current churn rate, and estimated cash flow for the next year.
This information is essential for making informed decisions about the growth and direction of your business.
Another free, powerful tool for analyzing your subscriber growth. This tool provides all the financial data you need to understand where you are with your revenue goals.
In addition to the regular growth and activity updates, profitwell.com offers detailed revenue and customer retention reports so that you can identify where exactly your growth is stemming from.
Thanks to this metric, you can figure out which customers are going to stay or go before they do. This is because it tracks their activity, such as their usage of your product.
ProfitWell can easily integrate with Google Sheets, Stripe, and Recurly.
4. Adobe Analytics
Adobe Analytics is based on the 1996 web analytics platform Omniture. According to Forrester Research, it can help achieve an impressive 224% ROI.
As one of the oldest analytics products on the market, Adobe’s offering is comprehensive, and it’s possible to add even more functionality with the implementation of your own plugins.
The business intelligence tool, Insight, is great for companies of all industries.
With artificial intelligence, you can predict which direction your company is heading.
With Insight, you’ll be able to identify weaknesses in your process before it becomes a problem.
And, because you’ll gain insights in real time, you’ll know which actions you should take to add value to the customer.
If you’re looking for the best product analytics tools to help you make data-driven decisions, look no further. In this blog post, we’ve shown you some of the top options available today. Whether you need something straightforward or something with more advanced features, there’s a tool out there that will fit your needs. So what are you waiting for? Start using product analytics tools today!