Unlocking insights with user analytics: A roadmap for product teams

Every product needs users. No matter how good your idea is or how sleek your UI, at the end of the day, no users, no product. Understanding what users want and how they interact with what you’re building is a core requirement for anyone building digital products. And to do that, you need user analytics. 

Let’s take a look at what user analytics is, why it’s important, and how it works. 

User analytics is important for understanding and optimizing user behavior. User analytics will give you insights into different types of user data, including (but not limited to): 

Product managers can use this information to make product decisions that will improve user experience, increase user numbers, and boost retention. 

Here’s an example: Say a multinational company operating in Switzerland notices that their product usage is higher in the German-speaking part of Switzerland than in the French part of the country. With that insight, they can adjust their marketing strategy and ad spend to target regions with better product-market fit. 

(Intrigued? That’s exactly what happened to Evulpo when they looked at their user analytics. Read the full case study to find out more.) 

Beyond geography and demographic data, powerful user analytics will give you granular insights into your user base. You can explore unique user history, create and update user profiles with different demographic attributes, count or segment users based on behavior, and create cohorts that group users with similar attributes together so that you can see how their behavior evolves. 

User analytics allow product managers (and everyone else) to understand users and user behavior. Without it, you’re flying blind. 

User analytics allows you to investigate and dig deeper into how people interact with your product by going beyond surface-level questions. Each insight leads to more investigation and deeper knowledge of your users and your product. 

Example 1: How much is X feature used? Are users who utilize X more frequently less likely to churn? If they are, how can we nudge more users toward this feature? How does that impact overall retention?

Example 2: Are more users acquired from Y channel or Z channel? Which ones are more likely to still be using your product 30, 60, or 90 days later? Which ones are most likely to convert to paid users? If we see more users from Y channel but better retention from Z channel, should we focus more on Z channel? 

Example 3: Where are users dropping off, and why? What changes can we make to reduce that dropoff? Are certain user segments dropping off more than others? Why? 

Example 4: Are users who complete onboarding more engaged? If so, how can we nudge more users to complete onboarding? If not, how can we improve our product onboarding experience? 

These are the types of insights you can gain from user analytics. You can use that information to drive product decisions, improve engagement, and reduce churn. 

Even more importantly, optimizing your product based on these insights can help grow revenue and simply create a better product that users like and are willing to pay for. 

User analytics involves a few key elements: 

Powerful user analytics can track all kinds of user actions (usually tracked as events within your product), including things like clicks, sign-ups, feature use, and engagement.  

Once they’ve collected that user data, product teams can spot behavioral patterns and come up with theories to test and make product improvements. 

For example, as we mentioned above, PMs might notice that users who adopt a specific feature are less likely to churn. Once they have that data and that theory, they can make product adjustments to nudge more users toward that feature. How does that impact churn rate? Do different cohorts have different behaviors or impacts? 

Data and analysis are valuable, but to share insights with your team and make those insights easy to understand, you need to create data visualizations. Dashboards and reports can help you create compelling, interactive visualizations to share user insights and even investigate further. 

User analytics allows you to gain deeper insights into several key performance metrics, which can tell you a lot about the health of your product and what your users care about. 

User retention and churn are very important metrics for product managers. As we said at the top, no users means no product. Acquiring new users is significantly more expensive than retaining existing ones—according to the Harvard Business Review, “depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.” Understanding your users means creating a product they want, and ultimately improves retention.  

User analytics allows you to measure feature adoption and understand which features most resonate with users. With this information, you can prioritize valuable features and potentially update underutilized ones to make them more useful (or decide to remove them completely). 

We mentioned above that understanding users goes beyond demographic and behavioral data. Key user metrics also include measuring daily, weekly, and monthly active users (DAU, WAU, and MAU). Understanding active users will help you measure product stickiness with the DAU/MAU ratio, which will tell you how often users use your product. 

User analytics will help you track conversions and understand user progression through funnels. It can show you how effectively you’re acquiring new users and help you make sense of in-product user journeys, which will help improve overall product health. 

User analytics is important if you want to understand your users and their relationship to your product, but like any new platform, setting up user analytics and getting value from it can be challenging. 

Having access to user data is important, but sifting through too much data can make it harder to find answers. It’s important to focus on actionable metrics and the data that you need, rather than tracking every event under the sun. 

Companies that analyze and store customer data also need to comply with privacy and data regulations to keep their data secure. It’s important to choose user analytics solutions with built-in security and compliance features to avoid embarrassing data breaches and expensive legal repercussions. 

Now that you understand the value of user analytics, you need to choose a powerful analytics platform that will give you the insights you need to harness that user data. Mixpanel, which provides simple access to real-time data and behavioral insights, is a great option.

With in-depth analysis navigated by rich-context dashboards (we call them Boards), anyone can self-serve answers in Mixpanel without technical expertise or outside support from your data analytics team. And adding a qualitative element to your analysis is also just clicks away with Mixpanel's Session Replay, which lets you quite literally see how users are interacting with your product.

You can get started with Mixpanel today for free.