Best Practices

How to set the right product analytics priorities

Published Jul 6, 2023
Why “tracking everything” doesn’t work.

One of the biggest mistakes that product leaders make when they think about a product analytics strategy is immediately jumping to the question: “What are we tracking?” Or worse, jumping to the conclusion: “I want to track everything.”

The truth is, you’re never going to find signal in the noise if you try to track everything and hope an answer or insight appears in front of you. Your product analytics strategy should be about answering concrete questions, and you should go into it with specific things that you’re trying to understand about your users and your product as a whole.

The best way to think about setting goals or priorities is by working backwards. That means asking: What are you trying to accomplish with your product analytics tool

Common goals for product analytics

1. Understanding engagement

Product leaders often turn to analytics to understand engagement. In other words: How are my customers using my product? Beyond simply tracking user behavior, most product managers (PMs) want to understand if users are taking the “happy path” through the product—this is made up of the key features and aha moments that you’re trying to get users to engage with. Product analytics is key to measuring whether or not users are interacting with said features and moving through workflows that lead to long-term engagement. 

It’s also worth noting that every company will define ideal engagement differently, as it depends on your product and what users need from it. For example, ideal engagement for a tax application probably isn’t daily or even monthly use. Users likely only engage with the app during tax season. It’s important to measure engagement based on what makes sense for your product and its usage patterns.

2. Getting stakeholders aligned

Another common goal for product analytics is to facilitate better conversations with stakeholders. Product management is an extremely cross-functional role, and PMs collaborate with everyone from design and engineering to marketing, sales, and company leadership. When you have data from product analytics to back up your recommendations and potential development work, it makes those conversations go a lot more smoothly. It also helps bring everyone onto the same page and get aligned around what the data is showing, and prevents a situation where the loudest person in the room automatically gets approval for their idea.

3. Driving better business outcomes

There are many different goals and priorities that teams set out to use product analytics to accomplish. In this way, product analytics is a bit of a double-edged sword. There is so much you can do with it, but it can be hard to narrow down your focus. But a great place to start is around driving better business outcomes.

You might anchor your efforts around better understanding your users and their needs so that you can build the right products and features. Or maybe, your team wants to focus on how to reduce friction in the product experience. It could also be the case that your biggest priority is to increase revenue, and use product analytics to identify opportunities for customer expansion or to measure the ROI for specific features. Perhaps your team wants to drive more innovation and use product analytics to fuel faster experimentation and iteration.

Every company’s priorities for product analytics are going to vary. As a rule of thumb, try to start with one or two goals and expand your strategy from there. If you’re part of a larger organization with multiple product teams, you might have the ability to tackle more goals at once. 

The most important thing, however, is to ensure you’ve established these priorities from the very beginning so that your teams know where to focus their efforts and what to be working towards. 

Interested in learning more about what to prioritize with product analytics? Take Pendo’s Product Analytics Certification Course here.