Why is analysis of products important

The lessons you learn from analyzing existing products can be applied to new products. In an ideal world, a dedicated product analytics manager should be a part of your product team. However, smaller companies, startups, and larger enterprises that are still growing their product team out can absolutely conduct a product performance analysis on their own.

Ultimately product performance analytics should become the domain of the product, but it often makes sense to start with marketers conducting the analysis, since many important product metrics will be familiar to the marketing team. Reading a few product analytics books is a good start, but to make things even simpler, here are a few specific metrics that almost any company will want to look into for every product they offer.

Note that these metrics are starting points. Simply looking up these numbers may produce real insights, but the real gold is found by digging as deep into the data as possible to uncover the factors that influence these critical business metrics.

Revenue per product is another baseline data point that will answer a very simple but important question: Which products are bringing in the most money? Is it best to focus on selling a few more of your most expensive, highest-margin products, or double-down on maximizing the sales volume of lower-margin products?

Looking at the behavior of active users is often a helpful metric for churn analysis. When do customers stop using your product? If you can improve the product experience, decrease friction, or make other improvements that keep your users happy. Related to churn is another metric called LTV. Increasing the lifetime value of your customers is a surefire way to increase revenue without increasing your marketing spend.

With an eCommerce platform model, analyzing visitor activity, purchase trends, product page bounce rates, and other web metrics can help you make better recommendations and turn more one-time purchasers into repeat customers. Conversion rate and abandonment rate are two sides of the same coin. Your conversion rate is the percentage of people who view a product and buy it.

Forecast your sales volume Estimate the volume of the product sales you anticipate based on your research into customer needs, the size of your existing customer base and your market. Identify your break-even point Estimate the profitability of your product, and determine your break-even point — the amount of product you need to sell to cover your fixed costs such as rent, electricity and wages. Determine your minimum sale price Project your returns based on your anticipated discounted product price to identify your lowest sales figure per item.

Consider the long term Forecast the lifespan of your product in the market. Scope your marketing strategy Your marketing strategy will help you determine how to position your new product in the marketplace. Also consider Find out if there are grants and business support available to help your new product development. Find out if your business and industry association can assist with industry-wide sales figures. Previous New product concept development and screening Next New product prototypes and market testing.

Last reviewed: 17 Jul Last updated: 27 May Print Page Print Topic. I want to More online services More events Every product is designed in a particular way - product analysis enables us to understand the important materials , processing , economic and aesthetic decisions which are required before any product can be manufactured.

An understanding of these decisions can help us in designing and making for ourselves. The first task in product analysis is to become familiar with the product!

What does it do? How does it do it? What does it look like? All these questions, and more, need to be asked before a product can be analysed. As well as considering the obvious mechanical and possibly electrical requirements, it is also important to consider the ergonomics , how the design has been made user-friendly and any marketing issues - these all have an impact on the later design decisions. If you do this exercise for various products, you will very quickly discover something interesting There are 2 main types of product - those that only have one component e.

Products with lots of components we call systems.