Product analytics gives teams the foundational customer insights they need to make smarter (and ultimately, more profitable) product and business decisions. Particularly when it comes to reimagining a company’s digital experiences, analytics helps product managers (PMs) and owners validate their choices and investments—and prove the impact of their efforts—as part of the organization’s overarching digital transformation.
The more you measure, the more you’ll discover about your customers—empowering you to build products and digital experiences that better meet their needs. And by becoming more data-driven, you’ll be able to make more informed choices—ultimately saving your organization time and money.
Let’s take a closer look at four reasons you should make product analytics the backbone of your digital transformation initiatives.
1. It helps you make the right decision, the first time
Particularly because digital transformation initiatives often come with a hefty price tag (some estimates predict that global spending on digital transformation will reach over $3.4 trillion by 2026!), it’s important to take a data-driven approach when the success of the business is on the line.
Product analytics gives you the data you need to truly understand how your customers are using and experiencing your product, so you can implement quick fixes or get the insights you need for future releases. For example, with a product analytics solution like Pendo, you can spot where exactly in a typical workflow most of your users are getting stuck—which tells you that you may have a user interface (UI) or enablement problem. Then, by comparing those findings to the qualitative feedback you’re receiving from those same users, you can further diagnose the problem and implement a fix. For example, you might use an in-app guide to show users how to correctly complete the workflow, deliver feature-specific onboarding, or provide always-available training modules in a Resource Center to help intercept and reduce support tickets.
Evian Gutman (Head of Product) from AusDoc said it perfectly: “Gut-feel will only take you so far. You want to make sure dominant voices don’t dictate how decisions are made just because that’s how things have always been done. If you really want to evolve that to the next level, you need a tool like Pendo to get specific and granular insights to operate in an agile framework. [Having] that enables you to then act on them quickly and adaptively.”
2. It makes your customer the focus of your strategy
Leveraging product data—and understanding the journeys your users take within your product—is a critical first step in becoming more customer-centric. And it’s not just about the number of clicks you see on a certain button within your product—it’s identifying the outcomes users are trying to reach by clicking on that button, and then optimizing their experiences accordingly.
By starting with a foundation of product data, product teams can measure and validate whether the features they’re focused on are actually delivering value to users, or simply checking a box. They can use both quantitative product analytics and qualitative customer feedback to get the full picture of the user experience, and optimize or build features to solve the challenges customers are really looking to solve.
Building your product experience around your customers’ digital experiences not only makes it more likely that they’ll stick around, it also builds trust and strengthens your brand’s reputation in the market—creating a viral loop that attracts future customers, increases revenue retention, and drives expansion and growth.
3. It reduces costs and mitigates risk
Product discovery—fueled by analytics—is a critical element of any solid digital transformation plan. Product analytics helps you measure the performance of your product, the health of your customers, and the ROI of any changes you make to your digital experience. By having clear visibility into which products in your portfolio drive meaningful engagement, which features get the most use from the most users, and which areas of your product drive desired conversions, you can better allocate resources and ensure you’re only spending money where you need to.
With a tool like Pendo Validate, you can even get a step ahead in the discovery process by testing new ideas and gathering feedback at scale—before you ever start building. This helps you identify and mitigate potential risks and issues early in the product development process. And combined with quantitative analytics data (and in-app guidance), helps you proactively address issues that may impact the success or speed of your overarching transformation initiatives.
4. It powers continuous innovation and improvement
The companies that are best positioned to survive and thrive are those that are making digital transformation a priority. According to research from Harvard Business Review, in the banking segment alone, between 2018 and 2022, “digital leaders achieved average annual total shareholder returns of 8.1% vs. 4.9% for laggards.” And in the same time period, “digital leaders have grown their active customer base at 0.5% . . . while digital laggards saw zero growth in their active customer base.”
Tying your product initiatives to metrics that are meaningful to the business not only helps you prove your impact—it’s also often the nexus for new ideas that can keep pushing your features and digital experiences forward. Regularly evaluating all of your product data (both quantitative and qualitative)—and making it a core element in your business intelligence reporting—is a great way to uncover new ideas to better serve your customers and drive your business forward. For example, the team at Filevine sourced over 2,000 new product ideas in just one year by using Pendo Feedback in conjunction with Pendo Analytics.
To learn more about using your product to drive growth and digital transformation, check out all the resources on our Product-led Hub.
Also be sure to register for Pendomonium 2023 to get inspired by other leaders and organizations who have successfully embarked on their own digital transformation journeys.