Web Analytics vs. User Analytics
Website analytics are important to keep track of, but if you’re spending all your time thinking about and focusing on the wrong data, they can actually be pretty useless.
Google Analytics is a staple in every startup, and is integrated with the majority of websites to monitor their success. The dashboard is full of pretty charts displaying fluctuating pageviews and number of sessions, which are useful in understanding you how your site is being viewed around the world. Unfortunately, you can’t rely on the number of site visits to tell you what’s really going on with your users (which are the most important part of your business model).
Don’t get me wrong - website analytics (sessions, % of new users, time on page, etc.) can help notify you if something is going very well or terribly wrong with your site. But, as you’ve probably figured out by now, those only begin to scratch the surface. To really gain insight into growing your business, you truly need to focus on user analytics.
‘User analytics’ (sometimes referred to as customer analytics or even marketing analytics) stem from website analytics, but have a different focus: the users (surprise!). When launching an application, it is expected that you’ll simultaneously set up multiple inbound marketing channels to get users to your site. These channels include social media profiles, blogs, emailing potential users, etc. To analyze the best ways to gain users and grow your product, you’ll need to collect data from the users that enter your application from these channels.
The Metrics to Focus on (and the Tools to Help You Do So)
|Tools We Use||Purpose||Cost/Month (if your app has < 1,000 users)|
|Google Analytics||Website analytics: detailed statistics on website traffic||Free|
|USERcycle||Customer analytics (cohort and pirate metric specific), lifecycle messaging, A/B testing||$29|
|Segment.io||Can send all your data to third party tools that need it||Free|
|Buffer||Manage social media channels||$10|
|Delighted||Calculate NPS (net promoter score)||$99 (we've only used the free trial)|
In order to extract the most accurate data from your users, it is important to start “tracking events” the moment your site is launched. Seriously - set up event tracking up, like, right now. There are guides for Google Analytics, USERcycle, and other analytics systems you’ve been using that walk you through the process, but we suggest using Segment.io to set things up. They have great documentation on how to do so, and once you start tracking events, you can send this data to any analytics tool you are using.
So, what analytics should you focus on? Here at Differential, we are big executors of the Lean Startup, so we think the important and actionable user analytics to focus on are the pirate metrics. Coined by Dave McClure of 500startups, pirate metrics refer to the 5 stages of a customer’s life cycle (the steps a customer goes through when using your website): Acquisition, Activation, Retention, Referral, and Revenue. AARRR!
Let’s say you’ve launched your MVP and are starting to gather interest. You’ve probably met with some people, sent lots of emails, and implemented an online presence through social media and have been drawing people in with your content.Now you need to keep track of the visitors who are coming to your site and how they found you!
Buffer is the tool we use to help manage our social media that can schedule and track whatever you post to the platforms of your choice. To measure user acquisition on your application, Google Analytics is helpful in showing where site visitors are coming from so you can find out how people are discovering your product. However, USERcycle is more strict about measuring acquisition - it says that you don’t acquire a user until they have signed up, which gives you a very realistic insight into your product’s actual growth.
So, people are signing up for your product! Awesome. Now you want to keep track of those who are actually interested in your product versus those who just signed up for kicks, and that’s where activation comes in.
Activation is where USERcycle excels: you can customize what ‘activation’ means to your product right in USERcycle. For example, a user could be activated once they return to the site after signing up, once they complete an entire user profile, or once they complete an event in your app three times, etc. Being able to personally define activation helps you make sure you are seeing the most accurate conversion rates.
Now that you’ve turned some signups into active users, you probably want to make sure they keep coming back. Using a lifecycle messaging tool, like USERcycle, keeps users engaged with your product/site and can help dramatically with retention. You can remind and nag users who haven’t returned in a while to visit your site, and send help and advice to users who didn’t follow through with a task (e.g. they started but didn’t complete a form, left something in their shopping cart, etc.).
Of course, you will also want to keep track of the attributes and rates of returning users. Google Analytics can show you how many returning visitors you have, and USERcycle is great for diving deeper into these retention statistics. It can give you a list of every interaction between a user and your site, and shows you the overall retention rates for different daily, weekly, and monthly cohorts of users.
If you’re retaining users, some of them should like the site enough to refer it to other people, therefore encouraging your growth! The more “shareable” your product is, the higher your referral rate will be. Track shareability (referrals) by creating events when a user clicks the share button on your website or invites someone new to use your product. This can be done easily in Segment.io to send the data to both USERcycle and Google Analytics (or whatever platform you prefer to use).
Another unique way to understand the referral rate is to measure your Net Promoter Score. Your NPS gauges how likely it is that your users would recommend your product to others by asking them to rate their recommendation level on a scale of 1-10. We’ve only used the free 30-day trial of Delighted, but were very happy with the ease of use. You simply import a CSV with the users that you want to survey (conveniently, you can export lists of different cohorts of users from USERcycle) and Delighted will send the NPS survey and keep track of the results. To give you an idea of where you want to be: companies with the best growth engines (Apple, Amazon, etc.) show an NPS of 50-80.
At this point, you have successfully guided some customers all the way through the life cycle, and they are ready to pay for your product. If you are planning to charge your users from the the very first site launch, you should immediately start tracking revenue (both the event and the amount) and cancellation.
You can create conversion goals in Google Analytics that are succeeded when a user is billed. However, you can easily send the ‘billed’ and ‘canceled’ data you are tracking through Segment.io to USERcycle to see the flow of revenue right on your metrics dashboard.
Ready, Set, Go!
Get out there and start tracking your success. Keep in mind, this process and these tools have worked for us, but every business is different. While these guidelines will help you start to measure growth and success, you’ll want to experiment with different tools to see what user analysis process works best for you!