What is a product analyst?

In the last decade, market research and customer-driven data analysis have become essential tools in business growth. There is a great demand for product analysts and their skills in defining a product or service roadmap based on customer feedback and market analysis. 

These skills are in great demand because having a predetermined roadmap when considering product or service integration with consumers saves businesses time and money.

Learn what product analytics is and how a product analyst converts data such as usage metrics, customer feedback, testing results, and sales figures into improved product and service performance in the marketplace. 

Find out how to become a product analyst, what responsibilities a product analyst requires, and why businesses can’t perform as well without them.

If a company has a great product idea, it's not enough to rely on that alone. The product will likely fail in the market without testing it with the target audience to determine if it addresses a pressing problem.

Additionally, if the product is launched without gathering sufficient customer feedback, the expenses incurred in its design and development may go to waste. Therefore, leveraging customer data is crucial for creating useful and valuable products. 

This is where product analytics comes into play, enabling the design, development, modification, and enhancement of products and services. This is particularly true for websites and digital products, where measuring key performance indicators (KPIs) and conducting tests can improve customer experience and business outcomes.

A product analyst is a person who contributes to every stage of product development by using market research techniques. This is to collect customer feedback before a product launch or when analyzing sales trends and product usage data once the product is on the market. 

The information and insights a product analyst gathers can influence decisions on whether to allocate time and effort for a particular product or the considered added features.

A product analyst can also gather data that can influence decisions about products already on the market. Products that aren't selling well or need improvement can be unveiled by collecting information on customer’s reactions to the product.

Product analysts' skills are not just limited to tangible products and services. They can also contribute to website user experience designs. Product analysts can help designers create websites or applications for businesses that want to enhance and improve users' efficiency and experience when using their digital products to increase revenue.

Product analyst vs. business analyst

While product analyst jobs solely focus on how a product affects a business's bottom line, business analysts examine data to identify issues in all parts of a company, such as human resources, IT, or business operations. Once the business analyst identifies the problems in any of these departments, they will recommend solutions.

The difference between a product analyst and a product manager

Product analysts supply product managers with strategic data that the latter will follow in the product's design, development, and manufacturing processes. Product managers conduct each product phase's logistical and tactical planning to bring the product to market.

The product manager is in charge of technological innovation and will determine how the product will function and what features it will contain. The product analyst will research to determine if customers will respond positively to the product functions and features under consideration. They will then produce data to help the product manager adjust the design if necessary.

Is a product analyst the same as a data analyst?

Data analysts is a generic term for those that collect, organize, and analyze data. However, this position can fall under any company department, such as marketing, finance, HR, sales, and business operations. Product analysts collect, organize, and analyze data, but the information is focused solely on the products the company sells and how they relate to its bottom line. 

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A product analyst's job description is similar to a data scientist's. They have to collect information through various methods, examine the data, and present conclusions based on the knowledge gained from the analysis process. 

Some responsibilities of a product analyst include conducting research and tracking metrics while analyzing what was collected and drawing conclusions.  

Conduct user research

First, a product analyst has to gather the data to be analyzed. The product analyst must be adept at formulating and conducting methods to produce usable results. They can collect the information through carefully designed processes, including:

• Surveys

• A/B tests

• Product analytics

• Quantitative usability testing (benchmarking)

• Card sorting

• Interviews

The selection of the people asked to participate in these data collection processes is just as important as the processes themselves. The product analyst needs to comprehend the product and identify the market segment that best suits the product's target audience.

Tracking product metrics

Creating experiments, taking measurements, and assessing the results are ways to track product metrics. The product analyst will want to measure metrics such as:

• Acquisition

• Activation

• Engagement

• Retention

• Monetization

• Churn

• Lifetime value

These are stages within a customer's lifecycle with the goal of steady monetization or revenue. For instance, the product analyst might be interested in understanding the reasons behind customers' decision to purchase the product during the acquisition phase but not continuing to the activation stage, where they recognize its value, leading to potential loyalty.

By making changes related to pricing or availability, the product analyst can see if more customers transition from the acquisition to the activation stage more readily or if the changes have no effect.

Analyzing user data

Once the product analyst has gathered data through user research and product metrics, it's time to sit down and analyze the data. The product analyst must make sense of quantitative data, such as statistics, percentages, calculations, or measurements, and the non-numerical or qualitative data collected.

Identifying areas of improvement

When the data is analyzed, the product analyst will produce conclusions based on the analysis and inform the product manager if they should spend more money or time on a product or make changes to improve it. The efforts of the product analyst should result in a product becoming more competitive and profitable.

Knowing how to conduct research that will produce accurate results and guide a product's course is a critical skill a product analyst can have. Becoming proficient at research methods that accurately depict the product's performance in the marketplace is a skill that will substantially increase the cost-effectiveness of product production.

Some other helpful skills include: 

• Understanding consumer behavior

• Being able to work with large datasets and understand statistical analysis

• Know how the product development process works

• Have problem-solving skills

• Collaboration in a cross-functional team

You'll also need communication skills to present to the population in your user research what is expected of them as they go through the designed process. Communication skills can also be helpful when explaining results to other team members so that they understand the product strategy they should embark on.

A product analyst usually needs a bachelor's degree in market research, business, communications, economics, or social sciences. However, some employers may require or prefer that a job candidate also have a master's degree in business administration. 

Courses in statistics, research methods, marketing, economics, consumer behavior, communications, and social sciences are helpful in learning product analyst skills. Once you have completed your degree, you can start as an assistant product analyst, working with more experienced product analysts.

You can also start as a junior product development team member in product or project management departments. Starting on the product development team will help you understand the product development process that you'll need to know when analyzing data from consumers and tracking product metrics.

When dealing with mounds of raw data, you may need help mining it to identify patterns and extract useful information. The knowledge of programming languages can help when analyzing data and include:

• Python

• Java

• SQL

• R

• SAS

You'll need these programming languages to digitally prepare the data, build models, and evaluate the data to understand results better. You'll need an understanding of programming languages to use algorithms and other techniques to convert a significant amount of collected data into a usable output. 

According to Glassdoor, the average salary for product analysts is $73,857. A product assistant analyst's earnings may be around $37,570 when starting the career. However, because product analysts are in such demand, job security and growth opportunities will be available for the next decade.

Product analysts play a crucial role in ensuring the cost-effectiveness of product development within a company. They can enhance their effectiveness by skillfully designing user research methods, acquiring programming language proficiency to analyze data more efficiently, and identifying opportunities for improvement. This enables the products to generate maximum revenue and achieve significant cost savings for the company.