Collection, analysis, action: A beginner’s guide to the product stack
This post is written by TWG, a product consultancy specializing in modern application development, data engineering, and product growth. Since 2002, they have helped both scale-ups and large enterprises achieve their conversion, engagement, and retention goals.
Simply put, data is at the core of good product management.
But making the most of the data that organizations collect is a process that’s often hindered by unnecessary complexity. Consider that there are more than 7,000 tools in the marketing technology landscape along—up from 150 just 8 years ago.
Enter the Product Stack—a useful framework for cutting through the noise whether you fit into either of the following categories:
- You have a web or mobile product that has users, but hasn’t reached its potential (B2B or B2C), or
- You’re currently building a product, but aren’t sure how to instrument the right tools to maximize your chances of success.
Now, let’s dive in.
What is a product stack?
A product stack is simply a collection of tools that allow you to collect, analyze, and act on data that is created by users in your application.
As a product professional, you know that most applications allow you to sign up, log in, and do a bunch of activities that realize the core value the product offers you. And in properly instrumented applications, each of those steps is an “event” that is recorded with all of the relevant details. Knowing those details helps product managers improve the experience for future users.
To build a product stack that gives you these necessary insights, there are three core components to know about: collection, analysis, and action.
Ever heard the phrase, “garbage in, garbage out”? This step, which is all about instrumenting your stack appropriately, helps avoid that.
In quality decision making, everything starts with data you can trust. Because data that is collected reliably, hosted securely, and maintained continuously makes all other activities possible.
There are a number of ways to do this—from dedicated tools like Customer Data Platforms to custom, in-house solutions. Depending on your budget, the size of your technical team, and the vision for the future of your data, you can choose the solution that feels the best for you. As a product consultancy, we prefer to engage with clients at this stage to give them the chance to instrument things properly, and with scalability in mind.
Proper data collection can also quickly turn into a competitive advantage, because a) most companies don’t make the most of their data, and b) the future value of quality data significantly outweighs its early setup cost.
Whatever you choose, be sure to approach collection with intentionality.
In 2005, fresh off of an IPO the previous year, Google analyzed how it could invest its war chest in a forward-looking manner. They opted to buy Urchin Software Corp, using its tool as the core of what’s arguably one of the most important free tools ever released on the web. You know it as Google Analytics.
The power of free—and what is actually a really good tool—meant that, for many years, Google Analytics was the only name in town for those who didn’t have an enterprise-level analytics budgets.
Now, many moons later, the landscape has evolved to include a whole range of options that help product people understand user behavior at scale, and answer questions like:
- Where are my users coming from?
- What parts of the product are confusing for them?
- What features increase their likelihood of conversion from free to paid? [see what this looks like in Mixpanel].
Here’s where a product analytics tool like Mixpanel fits in. As the “brains” of the product stack, product analytics tools allow you to analyze how users are using (or not using) your product. From Impact Analysis to detailed user flows, there really is no shortage of clever ways to slice your data—and form conclusions about how best to improve conversion, boost user retention and make your product better.
Without a robust approach to the analysis stage, the rest of the stack becomes pretty meaningless. After all, in the absence of quality insights, your product can’t really reach its full potential.
For this reason, it’s one of the most effective tools in our arsenal when we engage with clients to help them improve conversions and user retention.
Here are just a few of the key questions a product analytics tool can help product managers address:
- What features should we prioritize to invest in next quarter?
- Where are users falling out of our free-to-paid conversion funnel?
- What kinds of behaviors are leading indicators of a user who will be retained for 30+ days? [see what this looks like in Mixpanel].
- How do I target users who are high spenders for my multi-channel marketing campaigns?
- Which features are poorly understood by users?
Now, this is where things get fun for marketers (product managers, too, but we likely had their attention in the analysis section).
This is a large bucket, but it’s essentially about taking the work we’ve done in the previous step (which has hopefully resulted in cohorts of key users), and turning it into action with the goal of improving a key product metric.
For example, maybe you landed upon a cohort of users who were likely to cancel their subscriptions. Try sending them an annual renewal offer at 30% off. Or, perhaps you discovered that your product details page is leading to lots of exits. Well, here’s the perfect chance to do some A/B testing and see if you can improve things!
The world of engagement and messaging is powerful, but can admittedly be daunting for the uninitiated. Yet, the rewards for getting it right will be exponentially greater than the time invested.
The best way to approach action is one step at a time. It’s really easy to get overwhelmed by possibilities and pull multiple levers, or bring on multiple solutions, without a proper game plan. This is a bad idea for a number of reasons:
- You may not be able to pinpoint why your metrics are changing: was it because of the drip marketing campaign you started, or the A/B testing that was instituted on the new onboarding flow?
- Introducing too many new components to the user experience all at once rarely goes swimmingly from a user satisfaction perspective.
- Your annual tool budget may be blown out of the water, and if results don’t come quickly, you’ll have some unhappy higher-ups to deal with.
- A lot goes into knowing how to make the most of each tool, and it’s unlikely that your team will be able to devote enough attention to each.
Go slow, and be smart with your approach to action. At TWG, we’ve seen great success with using a single action tool for our clients, and sometimes without! This is because a robust implementation of a product analytics tool, like Mixpanel, can give you dozens of ways to improve your product simply through better roadmap planning, which can sustain your growth for months or years at a time.
All you need
There you have it—a primer on the modern approach to data-driven product management, and the product stack.
To reiterate, here’s a summary of the most important takeaways:
- Data is at the core of good product management but most companies are not mature enough in their approach, leaving opportunities on the table.
- The product stack has many components, and has been evolving quickly over the years, but can be broken down into three key buckets: collection, analysis, action.
- Collection is the orderly logging of clean data, and can be using through in-house tools, or enabled by things like customer data platforms.
- Analysis is the heart of the beast, and where a product analytics solution fits in. This is where product thinkers go to understand their users, and identify ways in which they can prioritize their roadmap.
- In the Action part of the equation, be careful not to take on too much at once or you’ll risk not knowing what’s really making a difference.
And if this article created as many questions for you as it answered, don’t worry—that only means that you’re ready to dive deeper. I recommend you check out QBQ | The Mixpanel Community, or email us directly at firstname.lastname@example.org to chat product and growth.