You can witness a large number of similar products in your niche industry. And, to survive in today's huge market, you need to maintain the authenticity of your product. And one of the best ways to do that is through data and analytics.
"Data can identify pain points, customer journeys, conversion rates, and more. Talk to the retailers you are selling to and get more information from them. Partner with retailers to get analytics on interactions with your products from the consumer standpoint. That will give you more insight on how consumers feel about your product, demographics on who is buying it, and allows you to target the customer experience to dial in on that feedback," says Kaela Kucera, Ecommerce Manager at Pierce Manufacturing in Clootrack's 102 CX Expert report.
To become the market leader, you must monitor and upgrade your product consistently to preserve the benchmarked standards and fulfill customers' expectations. And performing product performance analysis and implementing its outcomes will help you to manage your product efficiently.
Let's get into the details!
What is Product Performance Analysis?
Product Performance Analysis is the process of obtaining valuable product insights by gathering and analyzing data to gain knowledge regarding the performance of your product. It provides you with critical information using which you can take impactful actions that would improve your product and move towards dynamic business growth.
In addition, product performance analysis act as your guide that assists you in evaluating the effectiveness and efficiency of your product. For example, if you notice a sudden decrease in product sales, you can find the reason behind that using product performance analysis. It reveals the exact reasons behind the issue, whether a product's particular feature or the pricing is troubling the customers. You can take necessary steps to increase sales numbers using actionable insights from the product performance analytics process.
Role of Data in Product Performance Analysis
Data allows organizations to understand how their products are being used and how well they are performing. By collecting and analyzing data on product usage, customer satisfaction, and sales, you can gain insights into areas where your products are succeeding and where they may need improvement. For instance, usage data can help you understand how often your products are being used, while customer feedback can provide insight into how satisfied customers interact with your product.
Data help your company develop robust strategies for product development, marketing, and sales endeavors. Tracking a product's performance with data assists you in detecting and addressing any issues that may arise in the near future to prevent the risks, ensuring the continued success of your product. Further, it allows you to make data-driven decisions that improve the performance of your products over time.
What are the Advantages of Using Good Quality Data for Product Performance Analysis?
Good quality data used for product performance analysis discloses valuable details that enable your product team to successfully execute several product-based activities and allow you to focus your resources on the areas that will have the biggest impact on overall organizational performance.
Here are 7 product-related advantages that good quality data provides when utilized for the process of product performance analysis:-
1) Making Impactful Decisions
In this data-informed world, data is a powerful asset to every organization. You can use it to make crucial business decisions like whats, whys, and hows of implementing a transformation to your product.
Related Read:- Data-Driven Decision Making To Improve Business Outcomes.
2) In-depth Understanding of the Product
The data analysis provides insights for a better understanding of the efforts your organization put into keeping your product on the customer's checklist. You can keep the purpose of your product alive so that you keep getting paying customers.
3) Devising an Effective Marketing and Sales Plan
By analyzing sales data and customer demographics, businesses can identify which marketing strategies and sales channels are most effective and adjust their approach accordingly.
4) Revealing Profitable Opportunities
The data after analysis showcases a full picture of opportunities that reveals what all things are possible for you to carry out to make your product perform at an optimal level and increase conversion rate.
5) Monitoring Product-Based Operations
Product managers can use the product performance report to manage the procedures that are been followed to maintain the authenticity and relevancy of the product in the market.
6) Reworking and Innovating Products
Product analytics reveal user behavior with your product. Using that, you can use the data to pinpoint the issues in your existing product to rework or innovate a new product, if possible, to drive the product's success.
7) Revamping Product Development Strategies
The product development phase is critical, so it requires proper planning for successful execution. The product analytics report is a profitable aid to the product development strategy as it guides teams to work in the right direction.
Steps to Perform Product Performance Analysis
Product performance analysis is an ongoing process of improvement to ensure that the product remains relevant and continues to meet the customers' requirements.
Here is 5 step action plan you need to follow iteratively to execute the process of product performance analysis properly:-
1) Set Objectives
Clearly define what you want to achieve with product analytics for performance measurement. This will help you to determine which specific metrics to track and what data to collect. Further, you can specify the key metrics to track the performance of your product and increase revenue.
2) Define Data Sources
There are many different types of data sources that you can use for product performance analysis, such as customer surveys, analytics tools, sales data, social media monitoring, and user testing. Ensure that you pick sources from where you collect good-quality and relevant data that is reliable enough to support your analysis.
3) Collect the Data
Before you start gathering data, plan the process of data collection beforehand to make the operation effective, as in today's world, you have to deal with large data sets. While collecting data, keep the privacy and data protection policies in consideration so that you do not land into unnecessary trouble for using that data.
4) Analyze the Data
Look for patterns and trends after analyzing the data and identify areas of product refinement. Use techniques such as A/B testing, funnel analysis, customer journey analysis, and similar analysis methods to gain deeper knowledge about ways to increase user engagement and reduce user churn.
5) Take Actions
Your product performs better when you take action based on the analyzed data. Use the insights gained from the product analytics to identify areas where your product can be improved, such as changes to the user interface, addition of new features, or enhancement of customer service, and act quickly for better results.
Effective Techniques That Use Data for Product Performance Analysis
Here are the 5 most effective analysis techniques that a product manager should consider using to analyze product performance and gain valuable insights to bring required transformations:-
1) A/B Testing
In the A/B testing method, two versions of a product (A and B) are created and randomly exposed to different users for each version. The performance of the two versions is then compared to determine which is more effective. It is a cost-effective and efficient method for testing changes you need to implement in your product without investing significant resources.
2) Cohort Analysis
The cohort analysis method involves tracking the behavior of users over time and grouping them into "cohorts" based on common characteristics. It is often used in product performance analysis to understand how different groups of users engage with your product, revealing important insights, such as how long they continue to use it, how frequently they engage with it, or how much they spend.
3) Funnel Analysis
Funnel analysis is a method used to track how users move through a series of steps in a product, such as moving from viewing your product page to adding it to the cart to completing a purchase. You can use this method to understand where users drop off or struggle to complete a task and identify opportunities to improve the user experience and increase conversion rates.
4) Customer Journey Analysis
Customer journey analysis helps you apprehend the ways in which a customer interacts with your product at different touch points. This analysis displays how customers discover your product, what their needs and wants are, how they engage with it, and what they expect from your brand at various points of contact in the product purchasing journey.
5) CX Analysis
Customer experience analysis is a method used to evaluate the overall experience of a customer with your product. It is a holistic approach to understanding how customers perceive your product and its feature. By analyzing the customer experience, you can identify areas of improvement in terms of product features, usability, and customer service to optimize its performance.
How Does Product Performance Analysis Enhance Customer Experience Using Data?
A properly functioning product with the capability to serve the customers' demands well is the most common way to keep your customers happy and deliver a top-notch customer experience. Today's customers value the product's ease of use with smoothness in every functionality, but at the same time, they also want more personalized features and options. By implementing data-driven changes, such as incorporating more customization options and utilizing data analysis to identify and address customer pain points, you can further improve the customer experience and drive product growth.
On top of that, product performance analysis aid the process of product category analysis, where you perform an in-depth analysis of different product categories. Understanding customers in the current marketplace and serving them with the best solutions become easy with the combination of these analyses. Overall, product performance analysis highlights the importance of informing product development and making data-backed decisions to meet the customers' evolving needs and stay competitive in the industry.
To Wrap Up
Product performance analysis uncovers several key insights that show the potential and adaptability of the product in meeting the needs of its intended market. You can easily comprehend if or not your product has performed well in terms of sales and customer satisfaction. Then accordingly, you can take the right steps to implement the outcomes of product performance analytics to bring a high degree of customer loyalty and positive feedback.
Additionally, you can use the product performance report to identify improvement opportunities, such as increasing the product's appeal to a wider range of customers and addressing any identified issues with the product's design or functionality. Based on these findings, your product team can take a series of actions to enhance the product's performance and continue to drive growth and long-term success in the marketplace.