Product Analytics in a Nutshell

A Concise Overview from a Marketing and Business Analytics Lens

Arjun Ken
6 min readOct 10, 2022
Photo by fauxels from Pexels

In the realm of business, customers reign supreme, acting as indispensable assets that drive decision-making. Placing customers at the heart of every decision is non-negotiable, as businesses strive to comprehend their desires, interactions with products, and overall needs. Ultimately, it is a positive user experience that distinguishes successful businesses from the rest.

In our contemporary world, products and services abound, each vying for customer attention. With competitors lurking around every corner, businesses are compelled to employ strategic measures to both acquire and retain customers. The internet’s evolution into a fundamental utility has birthed a new class of cloud products, facilitating instantaneous analytics to comprehend customer behavior. In this exploration, let’s delve into the world of product analytics, unraveling its essence and distinguishing characteristics within the realms of marketing and business analytics.

What is Product Analytics?

In straightforward terms, product analytics involves the meticulous collection and organization of user behavior data during product interactions. This data is then harnessed to derive valuable insights, steering product teams toward refining the user experience. Beyond this, product analytics fosters empathy within teams, fostering a quick implementation of enhancements based on user insights.

Typically, product analytics data is sourced directly from the product itself. This involves embedding a code strategically in key locations where user actions yield meaningful insights. As users traverse these locations, data is gathered, organized, and formatted for interpretation by analytical tools.

Why Product Analytics?

The implementation of product analytics establishes a rapid feedback loop for product teams to glean insights from users swiftly. Understanding user interactions, objectives, and journeys enables the identification of weak points, facilitating prompt enhancements to the user experience. This not only saves valuable time and money in the early stages but also identifies and caters to power users, ensuring their prolonged engagement and valuable insights.

Notably, companies reliant on advertising revenue heavily leverage product analytics to craft effective user interfaces and experiences, fostering user retention.

Product Analytics vs. Marketing Analytics

Preceding the ’90s, product management was synonymous with marketing, leading to the interchangeability of terms. However, product analytics and marketing analytics differ in their approaches to customer engagement. Here’s a breakdown:

  • Focus and Approach: Product analytics centers on solving market problems, providing technical and user-centric insights to improve products. In contrast, marketing analytics concentrates on revenue generation through effective messaging, employing diagnostic and predictive analytics with a sales-centric focus.
  • Outcomes: Product analytics results in new product requirements, code changes, or even pivots, while marketing analytics leads to refined messaging, positioning, and the implementation of market strategies.
  • Data Handling: Product analytics often involves handling sensitive user information, necessitating careful adherence to company policies and legal boundaries. Marketing analytics, in contrast, avoids user-specific data, making it more accessible within the company.

Product Analytics vs. Business Analytics

Business analytics, often synonymous with Business Intelligence (BI), extends beyond product-centric scopes. Distinguishing features include:

  • Scope: Unlike product and marketing analytics, business analytics encompasses organizational-level data from diverse sources, analyzing trends in markets, products, services, finance, and human resources.
  • Techniques: Business analytics deploys predictive techniques like data mining, modeling, and machine learning to anticipate future outcomes, aiding business leaders in identifying threats and opportunities.
  • Focus: While product and marketing analytics zoom in on specific functions, business analytics casts a broader net, focusing on the overall operation of the business on a day-to-day basis.

Tools for Product Analytics

Real-time analysis of user activities necessitates specialized tools that seamlessly interact with products. Originating from the lineage of Google Analytics, a pioneer in web-based analytical tools, a plethora of options now saturate the market. These tools, with functionalities spanning product, marketing, and business analytics, offer unique strengths.

Here’s a curated list of the top 13 analytics software, each offering distinct capabilities. While primarily tailored for marketing and business analytics, these tools can be customized to cater to the nuanced demands of product analytics.

1. Google Analytics

Best Known For

  • all types of cloud-based applications
  • personal and business websites
  • businesses of all sizes to track users’ behaviours and customers interactions
  • digital marketing
  • Startups

2. Mixpanel

Best Known For

  • account level product analytics
  • landing page optimization
  • SaaS web apps
  • temporal analysis of user activities
  • integrating segmentation
  • A/B Testing

3. Amplitude

Best Known For

  • mobile app analytics
  • for creating different cohorts based on the custom events tracked and the segments of users
  • using heat maps and funnels
  • startups (with their great trial version product)
  • A/B testing

4. Segment

Best Known For

  • developing Customer Data Platforms to support expandability, data enrichment, and multiple devices
  • creating chart diagrams, and flowcharts for users
  • custom-built websites

5. Heap Analytics

Best Known For

  • simplified functionality to track clicks, events, and user journey
  • generating heat maps
  • user-level product analytics
  • segmentation optimization

6. Snowplow

Best Known For

  • Big Data processing and distribution with integration to Hadoop
  • business intelligence with capabilities for data modelling and transformation
  • collecting high-quality event data
  • product analytics on multiple platforms and channels (including IoT) with our range of first-party trackers

7. Looker

Best Known For

  • Business Intelligence and data visualization
  • self-serve user-defined dashboards
  • quickly and easily integrating data from across data sources into a single view
  • data modelling and blending
  • column data filtering
  • user-friendly interface for reporting

8. Baremetrics

Best Known For

  • simplified SaaS product analytics
  • payment, revenue, churn, and cohort analysis
  • intuitive dashboards

9. Pendo

Best Known For

  • account and user-level product analytics
  • click reporting
  • feature-based user engagement
  • in-app guides and NPS tracking

10. Adobe Analytics

Best Known For

  • custom event tracking
  • session-based analytics for digital marketing
  • tracking user interactions and conversions
  • cloud-based solutions
  • good reporting tools

11. Profitwell

Best Known For

  • customer success monitoring
  • SaaS product analytics
  • business analytics and improving customer retention
  • customer payments tracking

12. Gainsight PX

Best Known For

  • simplified integration for both mobile and web apps
  • better user engagement and improving conversions
  • multi-language support
  • integrated surveys and text-bubble walkthroughs

13. Smartlook

Best Known For

  • replaying sessions
  • replaying mouse movements and click tracking
  • ability to create heatmaps with historical data
  • segmentation
  • analyzing e-commerce sites
  • providing insights to the UI/UX designers
  • collecting data for qualitative analysis


Thanks for reading. That’s the long list of tools. There are many more. But, I find these are the most popular ones in the market. For product analytics, my top picks are Mixpanel, Heap, Amplitude, and Pendo.

In conclusion, product analytics emerges as a pivotal ally in the business landscape, fostering user-centric improvements, saving resources, and propelling businesses toward sustained success. As we navigate the vast sea of analytics tools, choosing the right ones will undoubtedly empower businesses to thrive in an era where understanding and catering to customer needs reign supreme.

Further Reading

For further reading, I highly recommend visiting the below link to get more information about this topic.

  1. 5 Top Analytics Tools That Are Product Managers’ Best Friends — by Donald Fomby
  2. Business Intelligence or Business Analytics — By Tableau
  3. Product Analytics — By ProductPlan

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