Defining Event-Based Analytics
Event-based analytics is the method of tracking and analyzing interactions between users and your product, also known as events. Events and users are the core elements of event-based analytics. An event is any action or behavior that occurs within a digital touchpoint, such as a mobile app, email, product dashboard, CRM, or webpage.
There are three common categories of events:
- Events that are important in completing a process within your product, like a tutorial or signup
- Events that guide a user through the main mechanics of your product
- Events that enable a user to make an in-app purchase
Users represent prospects or customers who engage with your business within a digital environment. As users interact with your product, their behaviors, demographics, and other attributes are recorded along with user properties, including location, device, language, email address, or mobile number.
This combination of users and events gives you valuable information about how your product is being used and, most importantly, why.
- Event-based analytics tracks the behaviors of users as they engage and explore your product.
- If you can understand why customers complete certain events in your product, you can make improvements to the user experience.
- Event-based analytics platforms provide the foundation for improving key performance indicators, such as conversion rates, retention, and customer lifetime value.
Benefits of Event-Based Analytics
Tracking user behaviors and events goes beyond simple metrics, such as page views or traffic channels. Event-based analytics doesn’t just tell you what is happening in your product; it aims to tell you why. If you can create a product that’s aligned with that “why,” you stand to gain increased engagement, loyal customers, and increased revenue.
Although each business will target specific outcomes, event-based analytics can help you:
Measure engagement and improve your product: Today’s consumers expect highly personalized experiences that feel designed just for them. That goes for B2B services, too. Without knowing what your users expect from your product, it’s difficult to design a customer experience that’s packed with personalization. Events and behaviors are the keys needed to unlock better engagement and accurate product adjustments.
Quickly apply complex technology to problems: You no longer have to be an SQL expert to extract powerful insights from data. Event-based analytics products like Amplitude offer low/no-code tools that let teams answer complex analytical questions. This dramatically increases efficiency and lets more team members benefit from the insights you gather.
Democratize data across your business: Event-based analytics provides a golden opportunity for different teams within your business to collaborate through data. According to Gartner, “by 2023, organizations that promote data sharing will outperform their peers on most business value metrics.” User behaviors can inform strategy across multiple teams, such as product, marketing, IT, and customer success.
Event-Based Analytics Tools
New event-based analytics tools continue to emerge as companies realize the value of behavioral data. But not every company has the same goals, resources, or constraints. Each tool offers certain capabilities that may satisfy the unique objectives of companies across industries.
Commonly used event-based analytics tools and event-based systems include:
What Can You Do with Event-Based Analytics Platforms?
Once you’ve collected data about users and events, you can perform various tests and experiments through your analytics platform. Each analytics platform offers different capabilities. Platforms such as Amplitude will give you the ability to conduct the below analyses and more.
Funnels consist of multiple events arranged in a way that leads to a point of conversion. Funnel analysis gives you a better understanding of how different events link together to form a funnel. A basic ecommerce funnel, for example, might look something like this: a user searches for items > they view details about that item > they add an item to their cart > they complete their purchase.
Each step in the funnel presents an opportunity for users to keep going or drop off. Funnel analysis lets you isolate each event so you can investigate any points of friction. If a step in the funnel is working well, you can replicate that experience in other areas of your product.
Segmentation is an analytics method that compares different users and events over time. You can use segmentation to separate prospects and customers into specific groups depending on how they engage with your product.
Comparing groups of users and events helps you locate key differences along the customer journey. One group of users may be traveling through the funnel at lightning speed in contrast to a slower group. These variations point you toward new ways of adjusting experiences, so they provide value and satisfy customers.
Real Examples of Using Event-Based Analytics
Companies that prioritize an intimate understanding of user behavior will have more insights to help drive personalized experiences. According to McKinsey & Company, “companies that grow faster drive 40 percent more of their revenue from personalization than their slower-growing counterparts.”
Jumbo Interactive Drives Revenue with Personalization
Jumbo Interactive, a platform that resells Australian National Lottery products, used Amplitude to personalize its marketing initiatives. Jumbo found three opportunities for personalization by targeting specific events and users.
- Jumbo experienced 20% more engagement after sending a recommendation email to users who had made an online purchase.
- After sending a push notification to players who had placed an order in the online app, Jumbo experienced a 32% boost in engagement.
- For users who clicked through an email or push notification to access the website, Jumbo delivered a personalized content card, resulting in 8.5% more engagement.
The result of these experiments? A 158% boost in conversions within two months of using Amplitude. At that pace, Jumbo is projected to earn $500,000 in new year-over-year revenue.
NerdWallet Boosts KPIs with Funnel Analysis
NerdWallet, a personal finance company, partnered with Amplitude to better understand how their website and mobile app were resonating with users. They used event-based analytics to conduct a funnel analysis of both mobile app and website users. NerdWallet discovered that mobile users were two times less likely to click through content than web users. After conducting various experiments in real-time, NerdWallet adjusted their mobile experience, resulting in a 200% boost in click-through rates.
Using Event-Based Analytics to Increase Revenue
Let’s say you own an ecommerce business that includes a website and mobile app. A prospect opens the website and browses a number of items before adding an item to their cart. Then, days later, they log in via the mobile app and complete the checkout flow. Within your analytics platform, the above behaviors or events might look like this: “User Sign Up,” “Search for Items,” “View Item Details,” “Add Item to Cart,” and “Purchase Complete.”
Over time, this event-based data can spark important questions that lead to product changes and adjustments. After inspecting the data from the above ecommerce example, a product designer might ask:
- What percentage of users complete the checkout flow in a single session?
- How does conversion differ by item or brand?
- If users don’t convert, where do they go instead?
- What is the typical duration (in minutes or days) it takes for conversion?
- How many users face a payment error? Do they return to try with a new credit card? If not, do we lose them forever?
The above questions are nearly impossible to answer without event-based analytics. Armed with event-based data, you’ll no longer have to make critical decisions based on intuition. Instead, you can leverage the patterns, trends, and desires of the people your product is designed to satisfy.
Connecting Event-Based Analytics to Growth
When it comes to improving your product, retaining customers, and growing your business, you no longer have to ask customers what they like or don’t like— you can simply watch what they do.
Companies like Amazon have found much success by paying attention to the habits and preferences of their customers. It’s clear that event-based analytics has helped companies like Amazon experience tremendous growth and increased revenue.
User behavior reflects motivation and intention. Every time a prospect or customer makes a payment, abandons a cart, or plays a song, they make a decision that communicates what they want. Over time, these user behaviors reveal patterns that point to new insights and discoveries—patterns that can be tracked using event-based analytics.