Choosing your first tool for marketing analytics is a surprisingly hard and important decision. The impact on this decision will have very strong effects in the short-term (actions you take) and will also affect your long-term options. Let’s take a look at the key things you need to consider and think about before choosing your analytical tool.
The Target Market of This Article
The type of company who will benefit the most from this article has some or all the following attributes:
- early stage or pre launch phase
- monthly traffic below 10,000 visits or less than 500 users on mobile
- Has never done any significant work in analytics
- you’re starting to grow an important number in your company such as product sign ups but you don’t understand why the number is growing or how to improve it
- the search for this tool is being done by whoever is responsible for the growth of the company in terms of marketing
Companies that are past this stage start to develop more complex needs that will naturally limit the choices available to them. These companies also have some experience using analytics to improve their product which gives them a better idea at what they need. With that in mind, let’s move on.
The Paradox of Choice in Marketing Analytics
The difficulty of choosing your first analytics solution comes down to the growing number of available options. Analytics is a very popular space and one that is going to keep growing, making it very appealing for companies to come into the market with their own interpretation of how analytics should work.
The Most Important Factor to Focus On
It is important that we then focus on the most important skill that we need to develop and that is:
Analytical Skill = The ability to understand data and make decisions from it
The large number of options tell us that we are bound to find a tool that will fit our needs thus finding the right tool isn’t the hardest problem we face. The hardest problem is developing our knowledge around how to analyze data and how to take action with that data. The tool will then simply help us carry out our goals. Once your analytical skills grow, you will realize that all tools have limitations and you will understand how to make the most out of whatever tool you are using.
The Steps Behind Choosing Your First Marketing Analytics Tool
Developing your analytical skills will take time and we need to come back to our most immediate problem which is finding the right tool to use now. For that, I will recommend a step by step guide that will increase the chances of choosing the right tool without wasting too much of your time. The guide isn’t perfect but it will give you something to start with.
A high level view of this guide is as follows:
- You first need to filter through all the available options in the most efficient way possible and narrow down your list to 2 good options. You will be reading through product features, talking to sales reps and analyzing tools mostly through their marketing materials.
- The second step will be to integrate your two options from step 1 to your product. This integration needs to happen without consuming too much of your development resources.
- You then want to test your two options (tools) against an real problem that you are having within your company or product. This problem should be important to your business goals and one that you are looking to do immediate improvements. Testing your tools against an immediate problem gives you a chance to understand how the tool works under real life conditions and helps you build your analytical skills.
- After a short time (1-2 months), you should have a better idea of which tools better fit your workflow, and your way of tackling problems. The tool should have also started to help you with your problem from step 3 which means you should have started to see some positive improvements. Finally, you decide on 1 tool and remove the integration for the second tool.
All the steps should be doable within 1-3 months and you should be testing tools against real problems within a few weeks of starting your search. Let’s now dig deeper into the details for each step.
A Note About In-House Solutions
You might have noticed that I have focused entirely on third-party solutions and skipped over the option of an in-house solution. There’s two reasons for this:
- At this stage, your development resources are very limited and the highest impact work you can do is usually around improving the product.
- Your knowledge around marketing analytics is also limited and you are probably not an expert on the technical aspects of collecting and storing data. You would be building a tool for something that you don’t truly understand (marketing analytics) while trying to improve your product in a market that you most likely understand better.
For the above two reasons, I believe you will benefit more from starting with a third-party tool while you build your analytical skills.
Step 1: How to Filter Through All the Noise
Time to complete step: 1-2 weeks
Our first step involves going through most of the available tools and narrowing them down into 2 solid options for your company. This is probably the most time-consuming step but also a very important one. Since you won’t integrating any tools in this step, you need to take educated guesses at whether a given tool will solve your short-term and long-term problems.
1a. We first need to start by creating a master list of all the possible options. Since this list could be incredibly long, we are going to depend on a few factors to help us create this list. You want to end up with a document (spreadsheet, Word document, etc) with a list that includes the name of the tool and the website link for each tool.
1b. Our first signal will be publicity. Start by searching phrases such as “best web analytics tools” or “best mobile analytics tools”. Open the first few articles and write down the names of the tools they mention. Note any tools that tend to be repeating in different lists. You will start to see the same names pop up in different lists such as Mixpanel, Kissmetrics, Flurry, Google Analytics or Localytics.
1c. Our second signal will be by industry. With so many tools, a lot of companies tend to focus on specific industries or types of companies. Search your type of company or industry with phrases like “best analytics tools for ecommerce websites” or “best analytics tools for mobile games” Just like before, note any tools that get mentioned multiple times and tools that got mention in the previous step.
1d. Our third and last signal will be social proof. Find similar companies/products to yourself and try to find out what marketing analytics tool they use. You can find this information through a few different ways:
- Searching online
- Inspecting their website or product to see what kind of resources they are downloading
- Asking other people or even the people who work at those companies
Regardless of which method you use, note which tools they mention and how this list compares to your existing list.
1e. Let’s now shrink down our list to the top 5-10 tools that got mentioned multiple times across the different factors that we explored. If you came across a tool that seems like a good fit but didn’t get mentioned that often then still add it to the list. Part of this process is also trusting your instinct.
1f. We now need to rank our tools against a criteria that will help us decide which ones are the best for us. This criteria will can be tweaked depending on your company but there are a few key things that you should keep in mind (in no particular order):
- Ease of use: How easily can you create reports from your data using internal or external dashboards? Can you then take these reports and compare them against each other or export to something like Excel?
- Setup time/cost: How long will it take/cost to set up the tool and start receiving data? You should be able to translate this into development hours and that can usually be translated into cost through the salary of the developers who will setup the tool. The ongoing cost is simply how much the tool will cost you per month, per year, or some other metric. This number has to make sense with your current budget at your company, whatever that is.
- Connections to other tools: Analytics tools don’t live in an independent world. They take data coming from channels like Facebook, Twitter, etc which goes through landing pages (another tool) and through your website and then your product. There will be other marketing tools that you will be using and you want to know how nicely your marketing analytics tools will play with them.
- Reliability: As with any third-party tool, you need to know how reliable this tool is. Any downtime would mean miss data which could lead you to incorrect results. SLAs or past reliability performance here will help a lot.
- Industry focus: We want to know who this tool likes to target in terms of industry, category, etc. This focus will usually decide the type of product features they build and how they grow the company. Make sure that this focus is somewhat aligned with what you are doing.
- Type of data it will offer: What kind of data can the tool offer? There’s a few categories here and they have different benefits.
- The first category is general visits/users which give you a high level look at your product e.g. how many unique visitors we had the last month.
- The second is specific users/customers which let you see how someone is using your app e.g. John signed up last week and has uploaded two pictures.
- The third are supplementary data such as revenue which can usually be seen at a high level e.g. all users spent $10,000 last week and on a personal level e.g John spent $150 last week. Find what kind of data this tool can give and what kind it can’t.
- Real time data: How quickly can the tool give you data? Does it take 24 hours for the data to be processed?
- Best use cases: What are the best use cases for this tool? Who can benefit the most from this using tool? As an example, some tools will be really good at telling general patterns like where your traffic/users are coming from while other will be better at telling you who are your best users/customers. These are different uses cases and it’s important to understand where the tool excels and where it falls short.
- Mobile specific uses cases: Mobile apps tend to have unique use cases that make data tracking slightly different. How does that tool handle this? Can it easily separate between mobile and web traffic? What do they recommend when it comes to data should be tracked across multiple platforms?
- Short and long-term needs: Following on the last point, you want to understand your short-term vs long-term needs. In the short-term, you might need help improving sign ups and then improving retention while the long-term would need you to scale marketing campaigns more efficiently (spend less money) and carry out high level marketing decisions. It will be hard to find a tool that will grow with you through every single stage but it’s important that you know where the tool will fall short so you are prepared to change tools or add a new tool.
- Data portability: You will one day outgrow your tool and you need to know what you can do when that happens. How portable is your data? Do they have an API that lets you export the data somewhere else? What limitations do they have when exporting data?
- Customer support: Find out what kind of customer service does the tool offer. Customer support can come in the form of a real human or in the form of clear documentation documents. In an ideal world you want both but if you have to choose, a clear and detailed documentation is better.
1g. We now need to research each tool and try to find as much information as possible in the least amount of time. Reading through websites and marketing materials can be fun but it will take you a long time to find all the answers that you need. I recommend to schedule 30 minute demos with the tools on your list and simply get them to answer your questions. The sale reps will be able to give you an overview of each tool and answer all (or most) of your questions and you would save yourself potential hours of manual research.
Talking to sales will also give you a chance to see how responsive the company. While sales departments tend to be more responsive than customer service departments, failing at being responsive with a potential customer can’t translate well into being responsive with real customers. Your experience may vary with this of course.
1h. To simplify your rankings, you can simply give each tool a score of up to 5 for the criteria items listed above plus any criteria unique to your company.. Once you complete your research, you can see which tools rank the highest. You then have to choose two tools from your list and you can do that through a combination of your rankings (quantitative data) and your gut instinct (qualitative data) of which tool would fit your company.
Step 2. Integrating The Best Two Tools
Time to complete step: 1-2 weeks
Now that we have two options for tools, we can work on integrating them to our product. This step will happen in different ways for companies. Avoid complex and fancy integrations since they will waste a lot of development time. I understand the need to do things right from a software perspective but you also want to start the most important part of this process which using the real tools.
Once the tool is integrated, you then want to set it up and get to know the key features. Just like with the sales calls, ask someone at the tools company how to set it up properly for your current needs (tackling immediate problem). If you can’t get a hold of someone, then you have to dig into the documentation and learn it yourself.
Step 3. Using the Actual Tools
Time to complete step: 1-2 months
We now reached the most important part of this process and that is using the real tools. This step isn’t important just because you get to play with the tools but because you get to build your analytical skills.
You should have an immediate and short-term problem that you are hoping marketing analytics will help you with and now is the time to start using our tools from the previous steps to tackle this problem. Spend the next 1-2 months working on this problem while leveraging the data your two tools are giving you. You should be able to see some positive improvements over this time.
You will also realize a few things along the way:
- A lot of the problems or challenges you may meet aren’t tool related but are instead due to your limited knowledge in marketing analytics. Work on improving the latter (analytics knowledge) and not changing the former (the tool itself).
- You need to approach analytics with the right mindset from the beginning to make sure you get the most out of the time you spent in this area. See my earlier blog post on principles behind effective analytics.
- You will get an idea of which of the two tools you prefer and why.
- You will also understand the limitations of the tool (which applies to any tool) and what changes you need to make to your product to get the most out of analytics.
Remember that the point of any tool is to help you form recommendations on how to improve your product or your company. Avinash Kaushik has a great quote on things can go so wrong and one day your CEO might say to you:
““how come you are using a quarter million dollars a year web analytics tool and you are not recommending actions”. – Avinash Kaushik
Don’t fall into the trap of feeling productive because you are tracking data around your product. Make sure your tools are helping you form recommendations around how to improve your product.
Step 4. Choosing One Tool
Time to complete step: 1 week
Your last step will be to choose one of the two tools and to remove the integration for the second one. This is a rather straightforward process and you will then be able to become better at using that specific tool.
I want to make a note about using multiple tools for longer periods. If you are using different tools for the same thing, you are wasting your time. We do this over a short period (1-2 months) to test the tools but continuing to do this for longer periods isn’t a smart use of your time. You should be able to confidently choose among your options and then commit to learning that tool. Eventually, you might outgrow the tool and you will need to move on to a different tool but that is a different topic for another day.
I don’t have any specific tools to recommend and that is because I don’t understand your business as well as you do. You need to do the research and come up with a tool that will fit your current needs and your company.
Do you have other tips or ideas on how to choose your first marketing analytics tool? I would love to hear from your, either in the comments below or through Twitter @ugarteruben.
I find most companies are stuck with high-level metrics and they aren't able to properly understand what actually drives user growth for their web and mobile products. To do that, you need the right data and the right tools.
If this sounds like your situation, then you should download our free tracking plan (and tutorial video). This is the document that you should create before you ever implement tools like Mixpanel, Amplitude, Segment, and Intercom. Click the image below to download your own free tracking plan (and tutorial video).