For awhile now, analytics has been used primarily as a means to better market to customers and prospects. Lately, however, we have seen a growing trend of using analytics to help improve a company’s product or service, and this is exciting because it means that companies are taking a much more systematic approach to improving their offerings instead of going off of gut feelings and speculation. If you are a product manager or business owner, by studying how a visitor to your website behaves, you can get a much clearer view of what is of value to them, what their pain points are with your product or service, and what they don’t understand about it. This information in unbiased, honest, and costs little to nothing to collect, making it pretty much a slam dunk. You simply need to know what to look for then analyze the data come up with some solutions, then execute those solutions.
Why Analytics Are Great Tool for Making a Better Product
There is a wonderful book by the author Philip Graves called Consumerology: The Market Research Myth, the Truth About Consumers, and the Psychology of Shopping which talks about how regular market research can be rather inaccurate. In the book Graves talks about how people aren’t always honest with themselves when it comes to what they look for in a product, so it is hard for them to be honest when filling out a survey or participating in a consumer group study. In order to better understand what is of value to the consumer, you have to look at what they do, not just what they say. Analytics helps with this, providing a wealth of data that can help give you a clear picture of how you should improve your brand and make a better product.
A good example of this can be a troubleshooting page for your product. If you find that visitors constantly visit one particular troubleshooting page, more so than any other page, then you can safely deduce that this is an issue that needs to be rectified.
Developing a Analytics Strategy for Product Development
To truly use your analytics to improve your product or service, you need to develop a strategy in advance. You will naturally want to partner with whoever is in charge of monitoring your analytics (unless of course you are in a small company and you happen to be in charge of both analytics and product development). Here’s how:
Start By Creating a Goal for Your Product
By all accounts you have probably have this done already. You need to know where your product stands in the market, what the target demographic is for it, what distinguishes it from the competition, and where you would like to take your product.
Identify KPIs That Fall in Line With Your Goal
Once you have an idea of where you want to take your product, you can come up with the key performance indicators (KPIs) that show how close you are to meeting these goals. Depending on what stage your product is at, the KPIs will vary. If you are offering software as a service (SaaS), for example, and it has been around for awhile, you may want to focus on KPIs that are related to retention.
Determine Which Metrics Relate To Your KPIs
Your KPIs indicate where you are at in terms of your goals, but by analyzing your metrics you can discover how you got there. Using the above example, if your SaaS is looking at retention rates, you would need to review your analytics for things like how often users log into their accounts, how much time they spend while there, what are the most common actions, and things of that nature.
I hope that you found this useful. If you happen to have any questions, please let me know in the comments below.
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