If metrics are the vehicle that drives product development, then analytics is the gasoline that provides the power. Without product analytics, the information generated by metrics is just a pile of data.
Analytics is crucial to product management for one significant purpose: product improvement. Without the measurements taken by metrics and the insights provided by analytics, product teams will not know how well their products are meeting the needs of users. They cannot make informed decisions about upgrading product functionality or adding capabilities. And if they make changes to the product without measuring and analyzing the results, they’ll have no idea if the revisions implemented are effective or even necessary. They would be operating in the dark.
Analytics plays five important roles in product management:
- It helps provide insight into the user experience. Understanding user needs and behavior isn’t relegated solely to the realm of marketing. Product teams can use analytics to understand why users are buying their product and how they are using it.
- It can measure product progress. Product analytics can inform team members about which features are working and which are not. If revisions and adjustments need to be made, analytics will tell them if the changes are actually solving the problem they are meant to address. Analytics can play a critical role in creating an accurate product roadmap that can tell you where your product is currently, where you want it to go (what you want it to be), and how to get it there.
- It can verify product ideas’ viability. A variety of analytics tools can verify product concepts, helping developers test, learn, adjust and retest to speed up the product design and launch process.
- It turns quantifiable data into knowledge for informed product decisions. There was a time when product development was a “fly-by-the-seat-of-your-pants” process that involved more guesswork than data-backed, informed decision-making. Analytics has made decision-making more objective, reliable, and faster. While intuition based on experience and expertise can still play a valuable role in product development, it can – and should –take a backseat to objective analytics.
- It fuels inspiration for further product developments. Analytics can jumpstart innovation and help product teams provide the kind of improvements that can help an existing product remain viable for an extended period of time. It’s important to note that quantitative data, by itself, cannot extend the shelf-life of a product. Quantitative analytics, used in conjunction with qualitative techniques, can provide a more holistic view of a product to help product management teams make the kind of focused improvements and adjustments that will help maintain that product’s value and improve its longevity.
It may surprise some to learn that, despite the spotlight brought to bear here on the product development side of analytics, that is only half of the analytics story. The other half concerns overall business strategy and the need to balance analysis of the business side with the technical side for an even broader holistic view of the organization.
This analytical yin and yang is often overlooked by manufacturers as well as outside product consultants retained to help companies innovate new products. But to ignore the business context of product development and management invites failure. You cannot launch and grow a successful product without understanding the business environment in which it exists. Any product development consultant worth their salt will insist upon business and market analysis to develop a picture of where the client company stands in relation to their competition, the marketplace in general, and their own ability to successfully go-to-market with the product under consideration.
Over the past decade or so, data generated by metrics and the analytical tools used to tease insights out of it have transformed product development and management. While some product team members may lament the demise of “seat-of-the-pants” engineering, the reality today is that without data and the analytics to understand it, effective product development and successful product management are simply not possible.
A new age of product analytics
We find ourselves now at the beginning of a new age of product analytics. Advances in data management, cloud computing, and the wholehearted embrace of Big Data by virtually every industry and organization is fueling a revolution in new product development processes and methodologies.
It’s now possible to improve product development and the chances of success by classifying and analyzing key characteristics of past product successes – attributes such as customer involvement level, sales force collaboration, and key metrics to model the relationship between product development factors and eventual product success. The trick is to collect the relevant product development attributes data and relate it all to product success in the marketplace. This can be a challenge because much of the data related to customer demand and response as well as competitive reactions reside outside the organization.
Still, the power of product analytics is reason enough to put it to work for your next product development project, despite whatever shortcomings may exist. Analytics are critical for telling you what’s going on with your products – from development, to launch, to customer satisfaction.
Product analytics can reveal the cold, hard truth about the capabilities and functionality of your product and how people really use it. Analytics gives you the most complete picture possible so you can build the best product possible.