Does your SaaS need Product Analytics?
If you're a SaaS business, product analytics is a must-have.
The type of data you collect and how you use it can make all the difference in your business. It's not just about knowing what's happening with your SaaS product right now; it's about also being able to predict what will happen next. At the end of the day, that's what differentiates a great SaaS setup from just another SaaS company in the market.
So how can you use product analytics to get ahead? In this blog post, we will discuss product analytics for SaaS in detail and understand why it is key to success.
What is product analytics?
Product analytics is a broad term that refers to the collection, analysis, and reporting of data related to your product. In short, it’s the science of understanding your users and designing products that meet their needs.
Why does it matter?
Product analytics is the study of how people interact with a product. It helps companies to understand how customers are engaging or consuming their products or solutions, and how they're using them.
Product analytics is different from traditional analytics because it focuses on the product in addition to the users. The idea behind product analytics is that if you can understand how people are using your product, you can make changes in the product to drive incremental user engagement.
If you don’t know how people use your product, you won’t know how to make it better. This information can help you improve existing features or create new ones based on what customers want and need. As a result, you’ll be able to build products that people actually want to use. This is what the market wants.
Why is product analytics important for SaaS?
Product analytics is a key element of a successful SaaS business. It can help you understand how your customers are using your product, and how they're interacting with your product features. Product analytics gives you the insights you need to make better decisions about product development and marketing. Product Analytics helps you with answers to questions such as:
- What problems are your users facing?
- Which features are being used most often by customers?
- What's the average lifetime value of a customer?
How to use product analytics for your SaaS product?
You're running a SaaS business, and you want to know how your customers are using your product.
But how much do you really need to know?
How much data do you need to collect, process, and analyze?
And what can you do with all this information?
The answer depends on what you're trying to accomplish and what is your objective of the analytics. If you're just looking for a simple tally of the number of users who have visited your website, then a simple Google Analytics implementation is probably sufficient. But if you want to understand how users are interacting with your site and which features they're using, then it's time to up the ante as far as product analytics is concerned.
Product analytics has two main components: usage data and customer data. Usage data tells us how consumers are using and/or engaging with products — what features they use, where they face issues or friction etc. Customer data tells us who our users are — their demographics, interests, and buying habits — so we can better target them with offers or upsell them into new products.
Product analytics can help you understand –
Understand Consumer Behavior – One of the most important uses of product analytics is to understand consumer behavior. You need to know how consumers or users use your product and which features they use most often to improve those features or add more value to them. For example, if most users are using a feature once a month or less, then it might not be worth investing time into improving that feature. However, if most users are using a feature multiple times per week or daily, then it’s a no-brainer to invest time into improving that feature or set of features.
Customer engagement – You can measure the time spent on each feature and segment these users based on their activity. This gives you an understanding of how engaged each customer is with your product, which helps you make decisions about customer retention strategies.
Analyze User Feedback – Another important use of product analytics is analyzing user feedback to identify areas where there is room for improvement in your product. This allows you to make quick changes based on customer feedback.
Product performance – You can measure how well a specific feature or functionality works within your SaaS product. You would know how your application is performing overall with detail on the functions that are performing or not performing well and which users and what part of their journey is frictional. Using anomaly detection algorithms, you can get a real-time view of anomalies with critical information needed to monitor and fix issues proactively.
Best Practices in product analytics for your SaaS
To help you get started, here are 5 best practices in product analytics for your SaaS:
- Start with the end in mind – The first step to product analytics is to determine what you want to achieve with your data.
- What questions do you want to be answered?
- How will you use that data?
- What will be the impact on your business?
Having an idea of what kind of insights you want to uncover helps guide your decisions down the line.
- Measure your product's health – The lifetime value of a customer (LTV) and customer acquisition costs (CAC) are two important metrics for any business. You need to know how much it costs to acquire a new customer, and how much money they will make you over the lifetime of their subscription. These are both important metrics to help you determine whether or not a feature is worth building.
- Measure user retention and churn – Keep an eye on user retention and churn so that you know which features are keeping customers happy, and which ones are driving them away. If you have customers who are leaving in droves, it's time to look at what can be improved upon in order to retain them as customers for longer periods of time.
- Track feature usage with cohort analysis – Know what features are being used most often among your users, and which ones aren't getting much attention at all (which may indicate that they're not very valuable). This can help inform what kinds of new features should be added to your product next — those that will get more usage from users over time — as well as what existing features may need some extra attention to improve their utility in some way (perhaps through an update).
- Get your data in one place – Use dashboards and visualization to easily comprehend all the data so you can easily analyze it and make better decisions based on what you see in real-time.
Qualetics – AI-powered Product Analytics Platform
At Qualetics, we believe in using AI to help you make data-driven decisions. That's why we've created a tool that will help you understand your product's performance and how to improve it.
Qualetics is an AI-powered Product Analytics platform that helps product managers and marketers reduce their time to market by providing an automated way to collect data, analyze it and get insights about user behavior.
Qualetics analyzes customer behavior and provides actionable insights based on the analysis.
The platform can be used by both large enterprises as well as small businesses.
With Qualetics, you can:
- Analyze user behavior to improve conversion rates, increase retention and engagement and reduce churn
- Understand what your users want and how they use your product
- Identify which features are the most popular and where you should focus your efforts
- See how different segments of users interact with your product
And a lot more. To know more about Qualetics or to experience it in action, click here.