A: “I would like to improve the conversion rate on my website but I don’t know where to start”.
B: “Let’s buy a CRO tool. That should help us solve the problem”.
Over the years I have witnessed this so many times. Unfortunately as far as I’m aware, buying a license and implementing a tool has never been the solution as such. It is always a means to an end. Product Analytics solutions are no exceptions here. And while most companies would consider implementing one, very few organisations really understand what it requires to turn this decision into business value creation. Once implemented, tools require to be (1) maintained, (2) operated in order to turn data into insights and finally (3) those insights to be activated in order to drive business growth. It requires time and effort. In short - it requires resources: time & brains, coordination with internal and external stakeholders. Implementing such a tool comes with a certain cost on top of the license.
Today, more and more companies launch projects and look into how they can implement and/or improve their current MarkTech stack. But very few organisations are taking the time to define what profit can be expected from those solutions.
What is concretely expected from Product Analytics
This section aims at clarifying what is to be expected in terms of business value creation when a product analytics solution such as Mixpanel or Amplitude is properly implemented within an organization. For the sake of clarity, we have classified the expectations into 2 categories: (1) the cost saving expectations and (2) the revenue increase expectations:
Cost saving expectations
Accelerated product innovation: in a world of continuous and rapid evolution, being able to bring innovation in one’s platform/solution is often a key differentiator. Unfortunately, in the age of copy/paste, bringing innovation once is not enough. Being able to continuously innovate is key. Product analytics solutions will clearly help you (1) better understand how customers engage with the product, (2) easily identify the bottlenecks and “aha” moments and (3) create a data-driven DevOps cycle. Those will consequently help you reduce the time needed to bring innovation which can be translated into cost saving in terms of development.
Improved technical team productivity: Product analytics comes as an out-of-the-box solution. Consequently it allows your technical people (developers, data scientists & engineers) to spend less time on ETL (extract, transform and load) operations, pipeline maintenance and dashboard implementation and configuration. This time can then be shifted towards deeper analysis which will drive more insights on the behavior of your users.
Maintained security, privacy, and compliance standards: today more than ever, it is to ensure that your customer data collection practices are privacy and security compliant. Product analytics implementation requires reflection on consent, PII data, construction of a data catalog, data quality, governance, etc. All of these allow your legal team to spend less time in understanding what and how things are being tracked. This can be translated into cost saving for those profiles.
Revenue increase expectations
Enhanced user experience and improved product offering: the implementation of product analytics solutions will ensure faster and easier identification of bottleneck and “aha” moments. Imagine results such as - in usability, drop-off reduction and higher conversion rates. This will obviously be translated into revenue increase for a given volume of traffic. last but not least, using a product analytics solution will ensure the discovery and resolution of site issues and customer pain points that were previously unknown in a processed and automated way (ie. through alerts). Solving those issues and paint points can again be translated into revenue increase for a similar volume of traffic.
Democratized analytics: Implementing a product analytics solution gives easy access to highly detailed data in a democratized way. The solutions allow you to query in a user friendly interface, every question marketers, product owners and UX specialists are asking themselves. Giving access to those accessible data and insights to less ‘technical’ oriented profiles ensures accelerated time-to-market and increased competitiveness through faster analysis and better data to help product teams move more quickly.
Improved marketing planning and effectiveness: From a marketing point of view, being able to identify what users like and consume will bring plenty of insights to be used for higher-performing content, improved landing pages and overall activation. This will be translated into more relevance, engagement and finally revenue for a similar investment.
Implementing and operating technologies is often not fully considered in terms of scope and requirements. Along with the license’s cost comes the FTEs (internal and/or external) needed to implement, maintain and operate the tool in order to bring the expected business value as defined when the project has been initially brought on the table.
Measuring and ensuring a tool or stack’s profitable for your company is not an easy task. At Human37 we can help you. Interested ? Reach out!