These tumultuous macroeconomic times are weighing on all parts of every business. But the teams delivering the goods and services that customers buy—namely, product teams—are really feeling the pressure. Because more than ever, the work that they do directly correlates to the company’s ability to survive. And particularly in large, distributed organizations, these teams need to prove that the products they’re delivering are making a measurable impact on the business.
As daunting as it seems, this is an opportunity for product teams to shine and let the value of their work be known across the business—from the CFO’s office to the boardroom.
Here are three key reasons product teams should always leverage product data—but especially when times are tough.
1. It helps you speak the same language as your CFO
Product analytics helps companies objectively understand how their customers interact with their products and move through their digital experiences. It shows the irrefutable, quantitative truth of what your customers are actually doing in your product (not just what they say they’re doing)—including the areas they use the most, the places they’re getting stuck, and all the actions they take in between. This kind of quantifiable insight allows you to validate product decisions, justify feature investments (or divestments), and make a clear case for resources.
With product analytics, product teams can better communicate with the company’s finance team (hello, CFO!) and understand the business the same way they do. Finance teams love product data because it allows them to identify areas of inefficiency and opportunities for cost consolidation. By analyzing data on product usage, customer behavior, and resource utilization, finance teams can pinpoint areas where costs could be recouped. For example, they can identify features that aren’t generating sufficient value, and pivot the human and monetary capital going into them to other areas of the product that do. Product data can also inform finance teams’ budgeting and forecasting processes—which is invaluable when it comes to planning investments and managing financial expectations (especially when a board or shareholders are involved).
Building a solid foundation of product data also allows product teams to tell a compelling story that connects product initiatives to business impact. Analytics is a powerful tool for product teams to prove the cause-and-effect relationship between product improvements and business metrics—for example, driving more conversions after deploying a targeted in-app guide. With product metrics available to measure the performance—and prove the impact—of every change or optimization, product teams can directly influence business outcome metrics like customer retention, satisfaction (CSAT), churn, and more.
In other words: You get to prove the value of your efforts, and your CFO gets the hard data they need to crunch the numbers.
2. It results in faster iteration and smarter decisions
Product analytics gives product teams the usage data and customer behavior insights they need to make faster, better informed decisions. It allows teams to become more proactive and gives them the tools they need to measure the impact of incremental changes—so they can spend more time working on the features most likely to drive value, and quickly move past the ones that don’t. In turn, these decisions result in benefits for the business, including:
- Stronger product-market fit, the first time—because what you’re building aligns with what your customers are actually doing, not what they say (or what you think) they’re doing
- More efficient spending—because you know exactly where to allocate budget and resources, based on the areas of your product that drive the most value and engagement
- Less operational waste—because teams are able to quickly identify what isn’t working, so they can redirect resources to optimize what is working
- Higher customer retention and satisfaction—because you can proactively identify indicators of churn, and use learnings from your most active and satisfied customers to optimize the experience for everyone
Particularly during an economic downturn, companies have fewer resources to invest in new product development. Product analytics ensures teams have the data they need to focus on the right things (rather than what they only assume they should work on)—free from biases—so they can build the digital experiences customers actually want to pay for.
3. It unlocks competitive advantage
In a tough economy where customer buying power is diminished, competition intensifies as businesses strive to attract and retain customers. But by pairing quantitative product analytics with qualitative customer feedback, companies can gain a strong competitive advantage.
Customer feedback is an invaluable companion to product analytics—giving teams the complete picture of customers’ digital experiences. While product analytics can objectively show you how your customers and users engage with your product, feedback tells you what they subjectively think and feel about their experience—all important indicators of a customer’s satisfaction, likelihood to churn, and other critical business measures.
Companies that leverage customer feedback are able to stay ahead of the competition by having an up-to-date view of their users’ needs and wants—particularly when the feedback is collected in the moment, within the context of the product. Feedback also helps inform product development decisions and gives teams throughout the business insight on where they should be focusing their efforts to best retain and satisfy customers—from enablement to support to marketing and beyond. And paired with product analytics, this data also allows them to uncover hidden opportunities, discover untapped user segments, and drive customer advocacy.
Ultimately, this combination of qualitative and quantitative insights helps product teams to build higher quality digital experiences (based on data, rather than gut feel) that will keep customers happy and engaged in the long run.
Want to learn more about the value of product analytics, and why it should be a priority in your organization? Sign up for our newsletter to be the first to know when we publish our product analytics benchmarks report in June.
And in the meantime, check out our e-book, 10 KPIs every product leader needs to know, to learn which KPIs you should prioritize in your next QBR to help demonstrate the value of product.