5 value drivers to get buy-in for customer-facing analytics
Posted On 13/03/2018
Customer-facing analytics is a must-have for your product strategy. Your customers need data to make better decisions. And when the competition doesn’t have it yet, it’s a product differentiator. All the more reason to put it on your roadmap.
Adding a customer analytics feature set seems like a no-brainer. But it is sometimes easier said than done. And with many competing priorities, product managers often need to build a business case to justify the time and engineering resource commitment.
If you find yourself in this situation, look no further. Here are 5 value drivers to build consensus to invest in customer-facing analytics.
1. Drive more engaged users
Low product usage is one of the top reasons for churn. Customers love data. So adding analytics and insights is a great way to engage them and increase time spent on your platform.
Pro tip: forecast the impact on product usage and retention rates.
A stickier product is good for business. A more engaged customer is a happy and vocal customer. Second order effects may also include:
More social proof and case studies
More word-of-mouth and referrals
An easier upsell process
More feedback for product R&D
Aside from engagement, customer-facing analytics makes the product packaging more attractive. Benefits include:
An additional unique selling proposition
New analytics visuals for website and collateral
Wow factor in sales demos
2. Reduce the cost of in-house development
Product companies often have an aversion to buying instead of building solutions. For many reasons, one being the cost involved.
Many executives assume developing a customer-facing dashboard is the cheaper alternative. But the costs can pile up in the following areas:
On the contrary, customer-facing analytics software can save you money. It reduces your Total Cost of Ownership (TCO), because a software license costs only a fraction of the average developer salary. Make sure to crunch these numbers before you make your pitch for customer-facing analytics.
Besides a lower TCO, a buy strategy comes with additional benefits:
Faster time to value. Go to market in as little as two months. The sooner you commercialize, the faster you see the return.
Expertise. You don’t just buy software. You also buy the expertise of a trusted partner. This means less time Googling and searching Github for help.
However, the right software investment has the opposite effect. It frees up time for developers for many reasons:
Quick setup. Low-code tools for customer-facing analytics are easy to set up. You may need a little engineering help but it’s quick and a one-off. On the contrary, developing analytics from scratch takes months of effort and resource consumption.
Self-service. Dev teams no longer have to create dashboards and reports. Instead, product managers and client-facing teams can prototype and publish dashboards themselves.
No maintenance. Maintenance of dashboards, similarly is “what you see is what you get.” No complex code base to maintain.
4. Improve competitive positioning with customer-facing analytics
Some people respond to the carrot (benefits), while others respond to stick (fear). And one the biggest and most universal fears is market competition.
If your company doesn’t offer meaningful insights, your competitors may beat you to the punch.
So make sure to have a good handle on your competitive stance in analytics. Depending on the situation, you have a choice of reasoning:
They don’t have analytics? Then you have a competitive edge if you act fast.
Their analytics suck? With a modest investment in analytics, you can steal market share.
They have solid analytics? Take action now to avoid getting crushed by competitors.
If you can prove that adding analytics worked for your competitors, it’s helpful to your cause.
If no competitors offer good analytics, the world is your oyster. But you need to act fast!
5. Generate a new revenue source
Your customers are willing to pay for insights. In fact, it can generate as high as 20% of your total revenue. Executives love new ARR! So show them how customer-facing analytics drives revenue.
Include dashboards in a higher pricing plan to upsell customers.
Sell custom dashboards as an add-on
Unlock more dashboards as customers move from lower to premium plans.
Before presenting your case, make sure to do some customer research. Run a survey to gauge interest, and find out how much customers are willing to pay.
A risk-free approach to customer-facing analytics
Above we outlined five different value drivers. It’s likely you will only need to lean into a couple of these to secure buy-in from the powers that be.
Whether it’s a CEO, CTO, Head of Product, or other manager, it’s hard to argue driving customer success and product usage at the same time. Similarly, you will be hard pressed to find someone in leadership who doesn’t want to make the offering more attractive, generate revenue potential, or redirect valuable engineering time to core features.
If you still get push-back, try to get them on board with a low-risk pilot project. With 2 months of guidance and no annual commitment, it’s the best of both worlds. Our team is ready to help: book a consultation or a product tour today.