Behavioral Analytics is the study of how and why users interact with a digital application. Behavioral analytics does not exist with physical products because very little data is collected after the physical product is sold.
One of the hardest concepts to grasp about digital applications is the fact that a wealth of data can be collected after you launch a product. With traditional physical products, little to no data is collected after a product is sold. Products cannot be optimized after they leave the shelves.
For example, let’s look at the process of a customer buying a lightbulb. In order for the manufacturer to produce and sell the lightbulb, the following stages occur:
- Shipping to a store
At each of these four stages, the manufacturer collects valuable data. At the design phase, they do user research and determine what lamp will work best with customers. At the production stage, they collect data in order to optimize efficiency and reduce the costs of making the lamp. During shipping, they keep detailed records about how many lamps each store receives. And at the point of sale, they record how many lamps were sold and at what cost.
After this stage, the manufacturer gets very little data about how users use lamps. They collect data on returns, receive customer service complaints and may do a survey on how users like their lamps, but they mainly collect anecdotal evidence. They don’t know key metrics like how many times the lamp is turned on/off, where people tend to put the lamp in their house or how long the average user keeps their lamp.
Let’s look at the same process for an app:
- Push to website or App Store
- User visits the website or downloads
Application developers collect similar data to manufacturers at each of the above stages. They do (or should do) user research on their prototype, optimize their development process and receive metrics on how many visits or downloads they receive.
After a user has visited their site or downloaded their app, they receive a wealth of data. Developers can record data such as where people use their app, what buttons they click on and how long they use the app for. Savvy app developers will use this data to continuously iterate and optimize their application resulting in boosts to engagement and conversions.
Behavioral Analytics forms the cornerstone of optimization. Given the millions of websites and apps available today, your app must have a very compelling experience in order for users to continue to use your app. Behavioral Analytics gives you a thorough understanding of how users engage with your application so that you can optimize your app and keep happy users without spending additional money on marketing.
Below, we’ll outline the basic process in order to get started utilizing Behavioral Analytics.
Step 1 – Determine the objectives that you want to optimize in your app and figure out what data points to track.
Are you trying to increase revenue? Increase conversions? Decrease churn? Track data points that relate to your objectives. For example, if you want to increase revenue, make sure that you collect analytics around the checkout funnel and figure out where users drop-off.
Step 2 – Physically track actions in your app.
Utilizing a tracking provider like Google Analytics or Flurry, add snippets of code to your app to track your objectives. Make sure you do this before you launch because data cannot be retroactively pulled!
Step 3 – Analyze your data.
Remember to use the data you collect to optimize your objectives. The data will paint a picture of how users behave in your app and will give you lots of inspiration for what to optimize.
It is evident that proper behavioral analysis greatly assists in reaching your business goals. Apps that utilize Behavioral Analytics have:
- Increased retention
- Increased conversions
- Much higher user satisfaction and virality
And remember, proper use of Behavioral Analytics increases engagement without a single dollar spent on marketing!
We will have much more detail about how to use Behavioral Analytics in our upcoming e-book. In the interim, if you have questions about utilizing Behavioral Analytics drop us a note at firstname.lastname@example.org.