The COVID-19 pandemic has turbocharged the digital economy worldwide.
IDC predicts “65% of global GDP [will be] digitalized by 2022 and will drive over $6.8 trillion of direct DX investments from 2020 to 2023,” and by 2023, “75% of organizations will have comprehensive digital transformation (DX) implementation roadmaps, up from 27% today, resulting in true transformation across all facets of business and society.”
These predictions may sound like an exaggeration to some, but to people who have moved their “In Real Life” (IRL) activities online due to pandemic lockdowns and travel constraints — which is most of us — they are not far-fetched.
And what’s more, the new digital economy has opened up a whole new opportunity for companies able and willing to analyze how people are using their products.
Consumer online activities provide a treasure trove of valuable data on user behavior and preferences if companies know what questions to ask and what to look for.
What is product analytics?
To learn the answer to this question, we spoke with Natalie Kouzeleas, EMEA sales director at product analytics software pioneer and innovator Mixpanel. The company is headquartered in San Francisco, with additional offices in Austin, New York, Seattle, Barcelona, London, and Singapore.
“Analytics automates the collection and management of data,” Kouzeleas explained. “Product leaders, growth marketers, data analysts and designers use product analytics to make data-driven decisions on how to build better products. In short, product analytics allows companies to fully understand how their users behave to engage, convert, and retain more customers.”
Product analytics platforms are built around two core functions: tracking users’ digital footprints step by step, and analyzing what users like or dislike and what leads them to engage with a product, return for more, or churn (drop off).
“Analytics is a critical piece of modern product management because most apps and websites aren’t designed to run detailed reports on themselves,” she said. “Product analytics makes user engagement data useful for companies by integrating all data sources into one single organized view. With data that’s been tracked, and organized into dashboards and reports, companies are free to research user demographics, the typical behavior flow that users take through a site or app, and opportunities to reduce churn.”
The aim is to build and improve digital products and services that consumers will value and hence buy again and again and again.
Why don’t tech companies just ask their users?
If only it were that easy, Kouzeleas said.
“Product analytics shows companies what their users really do, not just what they say they do,” she explained. “These are known as revealed behaviors and they’re highly telling. Product analytics allows product teams to dig deeper than human error-prone surveys and user interviews.”
Kouzeleas said that it’s very easy to make objective decisions using data, and that’s why all companies should use marketing analytics and product analytics. Quantitative data is accurate and tells the real story, and it can be supplemented by qualitative data; they’re not mutually exclusive.
“The fact is that hyper-detailed data leads companies to more profitable decisions,” she said. “According to McKinsey, companies that use product analytics comprehensively report outstripping their competition in terms of profit almost twice as often as companies that do not.”
The Israel connection
Israel represents a key market for product analytics because it’s a tech hub and hosts some of the world’s most important startup and scaleup companies.
Using savvy product management tools to inform profitable business decisions is especially important for startups and scaleups, which aim for building a loyal customer base, achieving brand recognition, and reaching full-fledged enterprise status.
“Israel already has advanced knowledge of product analytics,” said Kouzeleas, citing the company’s roster of Israeli clients, which include CWT, eToro, Fiverr, Gett, and Israel-founded (now New York-based) AI-powered insurance broker Lemonade.
The insurtech pioneer exemplifies the win-win synergy that occurs when a startup uses product analytics to scale into a profitable, growth-oriented enterprise.
According to a San Francisco Business Times article published in 2018, “Lemonade saw a 500 percent jump in new policyholders during the first 15 months after the company began using Mixpanel’s insights.” Today, Lemonade reports over 1 million policyholders and has expanded to France, Germany, and the Netherlands.
Silicon Valley success story Mixpanel began in 2009 when Suhail Doshi (then 20) teamed up with American tech startup accelerator Y Combinator to address the online business world’s need for fast, reliable, nuanced product analytics software.
In the hunch-based digital design era inspired by Steve Jobs, Doshi’s breakthrough insight was to offer companies a data-driven approach based on user behavior.
Mixpanel helps its clients take a deep dive into how people interact with their digital products. The company calls its analytics model “event-based tracking,” which is built on three key concepts — events, users, and properties.
As an example, a customer (i.e., “user”) takes an action (i.e., the “event”) by purchasing a coffee via an app. In Mixpanel terminology, the type of coffee and its price are the “event properties,” and the user’s name or age or even their most frequently ordered item(s) are the “user properties.” Mixpanel software tracks all interaction details in real time.
Mixpanel’s drill-down features include profiling users and segmenting them into cohorts; communicating with users via notifications and sending alerts to the product team; viewing marketing funnels (a customer’s path on the way to purchase); testing user response to variations on messaging or features; visualizing data with templated or custom reports; and measuring user engagement by feature.
In CEO Amir Movafaghi’s words, “We are the only company single-mindedly focused on enabling the world’s most innovative companies to fold data into their day-to-day workflows and providing immediate feedback loops to know whether their product changes are successful.”
The proof is in the data. Mixpanel’s client roster includes over 6,000 paying customers from the world’s largest to the most innovative startups. Over the past 18 months, Mixpanel’s leading indicators — sign-ups and active users — have traced spikes that have directly translated to revenue growth. Sign-ups have increased by 57% per month, NPS (an indicator that measures customer loyalty and satisfaction) has tripled, customer retention has improved by 150%, and weekly active users have increased by 72% since the beginning of 2020.
In November 2021, the company raised $200 million in series C investments from Bain Capital. In his remarks announcing the investment, Movafaghi vowed to remain true to Mixpanel’s real-time, self-serve design model and described his vision going forward: “The majority of the market is well on its way to leveraging cloud data warehouses to centralize, join, clean, and operationalize data, and we’re building Mixpanel’s fast interactive analysis with that inevitable future in mind.”
Israel as a digital transformation hub
According to AI Magazine, citing data presented by Stock Apps, “the global big data and business analytics (BDA) market was valued at $215.7bn in 2021. This figure is projected to grow by 27% to over $274bn by the end of .” These predictions suggest that our longed-for, post-pandemic world promises a Jazz Age for digital product designers and for deep-dive product analytics services that help designers know and better serve their customers.
Startup Nation’s entrepreneurs are ready. Their savvy strategy of applying product analytics to business decisions will benefit not only Israel but also our trading partners.
Israel’s location at the geographical and commercial crossroads of Europe, Asia, and Africa perfectly positions its digital businesses for international growth.
This advantage has become even more promising since the signing of the Abraham Accords in September 2020. At that time, the U.S. Chamber of Commerce stated that the agreement would “unlock tremendous potential between these economies and create new opportunities for trade and investment across the Middle East.”
Figures recently released by the Israel Central Bureau of Statistics (CBS) bear out this forecast, reporting about $610 million in trade between Israel and the United Arab Emirates for the period of January to July 2021.
The digital transformation age is here, as is the age of Israel-based companies using product analytics. A win-win indeed.
To learn more about Mixpanel click here to visit their site.