Have you installed tracking software on your website to capture data about your customers? Can you generate reports that display your bounce rate and conversions? Are you tracking how many people open your emails and click the links inside?
If you’re tracking any of these metrics, that’s fantastic. You need to track customer behavior to know how well your business is performing. However, tracking data and looking at reports isn’t enough. In fact, collecting too much data can work against you as a waste of time.
You won’t automatically get better results by looking at data – you need to collect and analyze targeted data.
Want actionable insight? Forget about vanity metrics and start using product analytics
At the end of the day, page views, downloads, likes, and shares are all vanity metrics. You could have a million downloads and no sales. If sales are your ultimate goal, a million downloads are worthless.
It’s not your fault if you’ve been focusing on vanity metrics. Many business owners don’t know any better because people make a big deal about these metrics. However, your business will stagnate without a more insightful form of data – product analytics.
Product analytics helps increase customer retention and lifetime value by showing you where to improve your product. Product analytics will tell you how your customers relate to your product in their daily lives, which will give you the insight necessary to make improvements.
Continual product improvement is paramount to growing your business:
To grow your business, you need to be continually improving your product. To make product improvements, you need to know the value your customers get from your product, what specific needs are met, and where your product falls short.
You can’t get this information by generating a report from Google Analytics or Facebook Marketplace. You need to connect with a professional product analytics team to analyze your data in-depth and decipher the results.
Analyzing data requires expertise because it’s intertwined with several other components including:
Identifying user flow:
The user flow is the steps your customers take to use your product. For example, if you’re selling an app, the user flow would be the steps taken to purchase, download, and launch the app. You would have another user flow once the app is launched.
Setting KPIs:
Key Performance Indicators (KIPs) are metrics that tell you if you’re reaching your goals. For example, if your goal is to generate recurring subscriptions that don’t get canceled after a free trial, your KPI could be tracking revenue per account compared to the total number of customers.
Creating an event taxonomy:
An event taxonomy requires having specific definitions for user actions while using a clear naming convention on the back end. For example, you’ll want to measure signups and purchases. Signup exists when a user is added to your database and a purchase exists when a purchase is completed and past the return policy deadline.
Connecting everything together:
This is where expertise is required. Connecting everything together is perhaps the hardest part. This requires strategy sessions as opposed to just looking at reports.
Data analytics provide a stronger framework for making business decisions than simply guessing or going with your gut. Without tracking and analyzing data, any actions you take may not be based on factual information, which won’t turn out well for your business.
Actionable insights come from data analysis – not just observation
There is a difference between looking at data and analyzing data. Looking at data gives you a surface-level understanding of what’s going on. For example, you’ll see how many website visitors you’re getting and which emails are performing best. All of that is interesting information, but without in-depth analysis, it’s useless.
In-depth analysis is where you’ll find answers to questions like:
- How can I get my web visitors to stay on my website longer?
- How can I increase newsletter signups?
- How can I increase sales?
- How can I decrease cart abandonment?
- How can I increase email opens?
- How can I get more email subscribers to click on my links?
All of these questions are important and your answers will be found only by performing an in-depth analysis of all the data you’ve been tracking.
Grow your business with product analytics:
There are many factors that contribute to business growth, however, no factor is more important than making sound decisions based on real data. Using product analytics will help you make the decisions that will increase revenue and customer satisfaction.
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