We’ve written extensively about why organizations—and business units within organizations—leverage data analytics tools to make smarter, data-driven decisions. Today, we’re even seeing a convergence of some of those tools as silos between product, engineering, marketing, and other teams begin to come down. While the benefits of a data-led approach are well-documented, at Amplitude we believe that the most effective way to understand your customers, improve retention and increase business growth is through a product-led approach.
Data, insights, and actions define the analytics loop. When viewing this analytics loop from a product data standpoint, you not only get a deeper understanding of customer behavior than you would through traditional web analytics, but you also help to minimize privacy risks that are often associated with surface-level web or third-party analytics. While it is on all of us to be good data stewards, here’s how putting first-party product data at the center of your business strategy can help reach your goals while demonstrating privacy and compliance diligence.
Putting product at the center
Today, your product is your business, and the value of product data providing deep, behavioral insights cannot be understated. A report by Harvard Business Review Analytics Services sponsored by Amplitude shows user engagement is the number one indicator of a digital product’s long-term success, with retention and customer lifetime value as close seconds. Amplitude was built specifically for product teams that have a heavy focus on customer engagement/retention analysis and lifetime customer value.
Behavioral analytics can help you understand what your prospects and customers actually find valuable—and sometimes more importantly—what they don’t. Further, behavioral data grants product, marketing, and customer success teams alike a deeper understanding of the entire customer journey, without requiring any third-party sources. This data not only gives insight into customer retention, churn, and preferences, but also provides an improved product experience. Customers are telling you a lot just by how they use your product, and behavioral analytics gives you the opportunity to tap into this wealth of information.
First-party data and identity resolution
Historically, third-party tracking has given marketers the ability to identify which digital location their customers are coming from, the information they have leveraged to tailor the customer experience and learn more about their customers’ online behavior. However, the use of third-party data does not come without risks—from data quality issues to security and privacy concerns to regulatory considerations. With product analytics, first-party data can provide the same benefits to the business without requiring a third-party source.
First-party data-driven product analytics solutions like Amplitude use identity resolution capabilities to create a full picture of the customer journey. This means that if a customer visits a company’s website, then clicks on an ad on the company Instagram page, and then later converts and signs up for an account, Amplitude can merge these user journeys into one, showing how one customer engaged with the brand from three different streams, all of which contributed to the final conversion. In other analytics platforms without identity resolution, this single customer would appear to be three different customers, and it would not be clear how each channel and interaction contributed to the conversion.
Amplitude’s approach to privacy
Product analytics is about how users interact with your product, not their identity. Amplitude needs very limited personal information (PII) to fulfill its promise to customers. Amplitude focuses on understanding patterns in feature usage and user experience, which can be done using pseudonymized data.
Our Amplitude team not only maintains secure practices and systems ourselves, but we also strive to help customers maintain their own compliance. Amplitude is data-neutral and agnostic, to provide our customers with privacy and control over the data sent to our platform. Amplitude offers its customers tools, such as our User Privacy API, that support honoring end-user deletion requests and opt-outs within their apps. Our customers also have access to tools supporting user access requests which make it easy to retrieve all data about an end user.
Our practice at Amplitude is to refer any user requests that we receive from our customers’ end users to our customer organizations, which can then make use of the tools offered by Amplitude to implement deletion requests within the Amplitude platform. From May 2019 to December 2021, customers used Amplitude’s user deletion tools to honor the privacy requests of nearly 260 million users. We have also shipped over seven new improvements to our user deletion tools, including the ability to fast-track urgent requests.
Today’s consumers want the best of both worlds: optimal customer experiences and brands they can trust. With a product-led approach, organizations can bring product analytics to the forefront of their product and marketing efforts in order to focus on outcomes, while meeting privacy obligations.