Product analytics is the process of measuring and reporting how users interact with your product. Companies use product analytics to measure who, what, where, when, and how users move through a product's key features.
Analytics eliminate guesswork and provide insights into which product areas are performing well and need improvement. By removing friction, companies use product analytics to improve the user experience. Diagnosing problems, optimizing interactions, and reducing churn strengthen your product and increase long-term value.
Product analytics can measure the success of flows, filters, forms, buttons, components, and features. Analyzing behavioral data empowers companies to answer questions like:
- How often do users use your product?
- How long do users stay in your product?
- What is your most used feature?
- What is your least-used report?
- Where are most of your users located?
- Who are your most valuable customers?
- Are people using your new feature?
- What are the characteristics of your most valuable users?
- When do most users churn?
Who Should Use Product Analytics?
Product managers and UX researchers often use analytics software, but everybody can benefit from it. Successful companies demonstrate the benefits of analytics software to all departments.
Executives use analytics to understand how the product contributes to business goals. Marketing departments better understand customers, and customer success teams monitor customer engagement. Product managers inform product roadmaps. Engineers can prioritize areas of friction and push for new features, and designers can identify roadblocks and improve design flaws.
How to Configure Product Analytics
Many companies combine product analytics with other customer data tools. For example, integrations with Drift, Hubspot, Intercom, Jira, Segment, Salesforce, or Zendesk can complement usage data with valuable insights from help desks, CRMs, or chatbots.
Common Product Metrics
- Attribution analysis measures how customers succeeded or completed their journey through specific touchpoints.
- Churn analysis measures how many people are sticking with or abandoning your product over a particular period. This analysis can uncover which parts of your customer's journey are churning the most and whether that churn is happening quickly or slowly.
- Cohort analysis allows you to group your users by common characteristics, like when they first signed up for your product, when they paid for a subscription, or if they spoke to an account executive.
- A conversion is a desirable action a customer takes, like submitting a form, upgrading accounts, or clicking on a new feature. Conversion analysis examines which customers completed the conversion and compares them to those that did not, finding common characteristics.
- Funnel analysis gauges how your users move through a designated series of steps on their way to a conversion, like completing their onboarding or adding items to their cart. Analyzing funnels helps identify opportunities for improvement by showcasing where users drop off along the way.
- Retention analysis enables you to understand how many customers return to your product over time. Comparing long-term customers to churned ones can help identify which features are successful over days, weeks, or months.
- Trends analysis visualizes whether a feature's adoption increases or decreases over time by focusing on specific touchpoints along a user's journey.
- Amplitude promises to measure "what happened, why, and which actions to take next."
- FullStory records user sessions, allowing you to watch playbacks of mouse movements and clicks.
- In addition to user analytics, Gainsight offers in-app engagements like walkthroughs and guides.
- Heap claims to surface "the hidden friction and opportunities in the customer journey."
- Mixpanel promises to measure "how your product is used, who sticks around, and much more."
- Pendo differentiates itself with a suite of tools: analytics (both web and mobile), guides, and user feedback.
- Segment is the leading customer data platform specializing in user segmentation. It integrates with any of the other tools listed.