How to create an analytics strategy for your product?

The short version: Break your product into pieces rather than tackling it whole — the AAARRR funnel works. Design a small number of metrics, testing each against whether it changes a decision. Then resist going deeper than you need to; tracking everything leaves you with nothing.

There are multiple frameworks that you can use to create an analytics strategy.

And, the objective of the analytics strategy is to be able to build a story around your product, about how users are using the product.

I’ll keep it simple, & break the process into 3 chunks.

How do you break your product down?

Don't tackle your entire product at once. Instead, segment it into pieces. You can use the AAARRR funnel (also known as the pirate funnel) or segment it by features.

Using a holistic approach will often overlook the nuances of user behavior within different parts of your product. Do not make this mistake.

💡 I love using the AAARRR funnel. Here’s a quick article on how you can use AAARRR funnel to create the analytics strategy.

How do you design metrics that aren't vanity metrics?

Avoid the impulse to jot down every possible metric. With each metric, answer the following questions:

• What decision will this metric inform?
• How does it enhance understanding of user behavior, & is it actionable?

If a metric doesn’t offer clear insights into decision-making or user behavior, it’s likely to be a vanity metric and should be excluded from your strategy.

Quick example: Consider an e-commerce app evaluating two metrics

1. Vanity Metric: The total number of products a user views in a week. While interesting, it doesn’t directly inform any actionable decisions.
2. Actionable Metric: The number of products a user views before adding an item to their cart. This metric is valuable because it can help optimize the user journey to encourage cart additions.

Why shouldn't you go too deep?

You’ll be tempted to track numerous metrics, to get a detailed understanding of the product. It’s a trap - you’ll end up with nothing.

Focus on the most impactful metrics to gain a comprehensive understanding of your product.

Your analytics strategy shouldn't attempt to decode every aspect of user interaction from the get-go. Start with a broad understanding of your product. This will allow you to identify areas for deeper investigation, formulate hypotheses, and progressively refine your insights.

Is there a template you can start from?

I’ve created a template around AAARRR metrics that you can use for your product. Here’s the link to access it.

Note: Please do not blindly follow the metrics. Use it as an inspiration, & design the ones that make sense for your product.

Refer here to read about all the steps involved in a Mixpanel setup.

Hope this was helpful. If you’re looking for any help with Mixpanel, feel free to reach out using any of the below methods.

LinkedIn | Email - anshdoesanalytics@gmail.com | Book a slot on my calendar

Frequently asked questions

What is an analytics strategy?

A way to build a story around your product — how users are actually using it. It's what you write before you build dashboards or set up tracking, so the instrumentation maps to a decision.

Why break the product into pieces first?

Because a holistic approach overlooks the nuances of user behaviour within different parts of your product. Segment it — the AAARRR pirate funnel is one way — and analyse each piece on its own terms.

How do you tell a vanity metric from an actionable one?

Ask whether it offers clear insight into a decision or into user behaviour. If it doesn't, it's a vanity metric and it should be out of your strategy.

How many metrics should you track?

Fewer than you want to. The temptation is to track everything for a detailed picture, and it's a trap — you end up with nothing. Focus on the most impactful metrics and start with a broad understanding.

Should you use a metrics template as-is?

No. Use one as inspiration and design the metrics that make sense for your product. Blindly following someone else's AAARRR template is how you end up measuring things that don't apply to you.