Product Analytics: How to Measure and Improve Your Product's Success

Product Analytics: How to Measure and Improve Your Product's Success

Simon Zynda
Simon Zynda9 minAugust 19, 2022

You’ve launched your product out into the world. Well done!

But what’s next?

How do you know if your product is successful, and what levers can you pull if it isn’t?

This is where product analytics comes in.

In this post, we’ll define product analytics, discuss the types of product analytics techniques and walk through how to use that data to make data-driven decisions about your product.

Let’s get started!

What is product analytics, and why do you need it?

At its core, product analytics is the process of tracking and analyzing data to improve the performance of a product.

By understanding how users interact with a product, businesses can identify areas for improvement and make strategic choices about future development.

While product analytics can be used to track any number of key metrics, it is particularly valuable for understanding user behavior.

By analyzing data such as session and bounce rate or using heat maps, businesses can gain valuable insights into user interactions with their products and what they are looking for.

Using this information, you can improve the user experience (UX) and conversion rates, as well as increase overall product performance.

In today’s fiercely competitive marketplaces, product analytics is essential if you want to thrive.

That makes sense, doesn’t it?

Product analytics - that makes sense

Source: Giphy

Product analytics: 9 steps to make it happen

Product analytics can provide product insights into how it is performing and where improvements may be needed.

However, in the process of interpreting this data, it can be easy to make incorrect assumptions, initiate pointless changes, and incur unnecessary expenses.

These things must be avoided at all costs.

That’s why, when looking at analytics data, it is important to keep a few things in mind:

It can be tempting to make changes based on isolated data points.

For example, if you see a sudden drop in sales, you might be quick to blame it on a particular change in the product.

However, it is important to look at trends over time rather than individual numbers.

This will help you avoid making knee-jerk reactions that could end up doing more harm than good.

02 Identify user needs and develop solutions that address them

Some areas of your product may perform well, but others may not. There’s nothing wrong with it.

However, it is important to be able to identify well those areas where change is actually needed – this involves looking at how users interact with the product and understanding their motivations.

The question is, how to learn about the needs of the active users?

Talk to them directly.

Customer interviews, surveys, and focus groups are all great ways to get feedback about what customers want and need from your product.

03 Analyze customer feedback and reviews

When we’re talking about user feedback, it’s worth mentioning that analyzing customer feedback and reviews is the next extremely important DO of the product analytics strategy.

This step will help you understand how your customers feel about your product, what their needs are, and how you can improve your offering.

It’s an act of taking care of your customer’s issues and complaints and turning them into product development improvements.

It shows that you care – so don’t hesitate to ask for customers’ opinions and create positive feedback loops. It can be a real help to have them on hand!

04 Do keep track of your product goals and KPIs

Product goals and KPIs tracking

Source: Undraw

Your product analytics strategy should be aligned with your overall business objectives.

This means that you need to have a clear understanding of what you want to achieve with your product and what product KPIs you need to track to gauge success.

It will help you prioritize which changes to make to your product and how to measure its impact.

05 Set up software for monitoring product analytics

Keeping track of regular activities would be nearly impossible without an appropriate product analytics solution.

There are various product analytics software options, so make sure to do some research and find the one that works best for your entire product team.

Such measurement tools offer tons of features and benefits that streamline your product analysis and help you understand your customer behavior even more.

Find the one that you can easily integrate with your toolbox and the one that offers a free trial so that you can test it out before making a purchase.

06 Do create a solid product roadmap

Your product roadmap is a high-level overview of the planned changes to your product.

It should be based on your product goals and KPIs, as well as your findings from customer feedback and competitor analysis.

To build a roadmap, product managers need to have a clear understanding of where the product is today and where it needs to be in the future.

Carry out the process by conducting user research, analyzing data, and talking to stakeholders. Don’t forget to share it with your team so that everyone is on the same page.

07 Identify any major problems with your product and work on fixing them

Your customers might occur problems during any product journey stage, so it’s important to identify those issues as soon as possible and put all the necessary effort into solving them.

This way, you will not only ensure customer satisfaction but also increase current user retention and decrease customer churn rate.

To find out about potential product problems, you can talk to your customer support team or use high-value customer feedback.

08 Test different versions of your product to see which is most successful

A/B test before rolling out changes.

It is a great way to test different product changes and see which ones have the biggest impact on your business goals.

A/B Testing

Source: Undraw

This testing method can be used for a variety of purposes, such as testing different design changes, new product features, or even different pricing structures.

How does it work?

One variant is typically the control, which is the current version of the product, while the others are called treatments. 

Treatments are usually the changes that you want to test to see if they have a positive impact on your business goals. 

For example, if you want to see if a new design change increases conversion rates, then you would A/B test the current design against the new design. 

The goal of an A/B test is to find a winner – the variant that performs better than the others.

09 Compare your product to similar products on the market

It will help you understand how your product stacks up against the competition.

Comparing your product to others will also help you understand what makes your product unique and why customers should choose your product over others.

Also, it lets you stay on top of changes in the market so that you can keep your product at the cutting edge.

​​Tools and techniques for product analytics

As any savvy business knows, the right product analytics tools can make a significant difference (and tremendously streamline the workflow).

The things that used to take you a lifetime (or at least plenty of hours) can now be done in a matter of minutes.

What’s more, in some cases, the tools may provide the actionable insight you would not otherwise be able to obtain.

Which of them might be especially helpful during product analytics?

Heat maps 🗺

Whenever there is a complex dataset to understand, visualization is the key to understanding it. This opens up new possibilities and makes data analysis much easier.

Heat maps are a type of visual representation that can be used to show the relationships between different data points.

By using different colors to represent different values, heat maps make it easy to see patterns and trends that would otherwise be difficult to detect.

This makes them an invaluable tool for product analytics.

Depending on the type of the heat maps (click maps, mouse-tracking maps, scroll maps), they can be used to track customer engagement, identify areas of improvement, and spot potential problems before they become irreparable.

In short, heat maps are an essential tool for a range of businesses who wants to get the most out of their data.

Click and Heat Maps - LiveSession feature

Do you want to know more about how heat maps work? Check out this guide ➡️ The only guide you need to use heatmaps effectively

User engagement tracking 👣

It’s an important part of product analytics. The more you know about how people use your product, the better it can be.

There are a number of different product metrics that you can use to track user engagement, including how long a user spends on a particular page or how often they return to use the product. You can also track conversions and other key user actions that they take within your product.

User engagement tracking - LiveSession feature

With a proper user engagement tracking plan, you can spot which features are being used most frequently, which areas of the product are causing confusion or frustration, and where people are dropping off.

Usability testing 📈

In product analytics, usability testing refers to techniques used to evaluate how easy your product is to use.

You need to be sure that your product is intuitive and that users have no problems starting using it from the get-go.

Otherwise, they may give up too soon – which is particularly important if your digital product is based on a subscription model.

LiveSession - Product Analytics Software

Right, but how do you accomplish all of that without any turbulence?

Your search for the right tool can end with LiveSession. It’s a product analytics software that lets you test your ideas remotely and watch results anytime.

Its capabilities are even more extensive – you can manage session recordings, analyze marketing funnels, and integrate it with many other useful tools (such as Google Analytics, Zendesk, Intercom) to create a real analytics combo.

In addition, Custom metrics and dashboards will soon be available, making LiveSession a comprehensive product analytics tool that will completely support product teams in SaaS (and beyond).

Dashboards and metrics - LiveSession features

Start using LiveSession for free and test all features for 14 days, no credit card required.

Remember that product analytics is only one piece of the puzzle

When it comes to data, there’s no such thing as too much information. That’s why product analytics is such a valuable tool for businesses. By tracking how customers use your product, you can gain insights into their needs and preferences.

However, it’s important to remember that product analytics is only one part of the picture.

To truly understand your customers, you need to integrate data from multiple sources – session replays, heat maps, events, funnels – and use the power of combined analytics.

LiveSession - Session replay for product teams in SaaS companies

Join LiveSession for free and try it for your product analytics. Its holistic approach to data allows you to get a complete picture of your customers and make better product decisions in the future – leading you to success! 🏆

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