What’s the Role of User Experience Analytics in Reducing Churn & Funnel Drop-offs? [INFOGRAPHIC]

What’s the Role of User Experience Analytics in Reducing Churn & Funnel Drop-offs? [INFOGRAPHIC]

Elena Doynova

Jun 1, 2023 • 9 min read

What's the Role of User Experience Analytics in Reducing Product Churn?

Reducing churn and drop-offs is high on your list, right? Organizations that start their journey with this goal in mind reach farther than those that don’t. It’s not difficult to come to this conclusion – if you are dead set on achieving any ambitious ARR or growth objective, churn will be one of your worst enemies. How you go about this task is different with every organization – some choose to incorporate brilliant onboarding strategies, some opt for offers that keep their customer hooked, some rely on the constant introduction of new features or trendy products. There is no one-size-fits-all approach, yet there are some tactics that can be employed to maximize whatever strategy you choose. The clever use of user experience analytics should be part of your plan to help you a/ pinpoint the exact moments of the user journey that generate the most churn or drop-offs, b/ understand why your users leave at these moments, and c/ how to address the issues at hand to turn visitors into customers. Let’s go!

Reducing churn meme

What is user experience analytics?

User experience analytics, also known as UX analytics, is a set of analytics that help businesses understand user behavior on their website or app and gain insights into how users interact with their product. It follows the user journey, including how users find the website or app, what they do while they’re there, and how they exit.

What is user experience analytics?

User experience analytics differs from traditional analytics in that it focuses on qualitative data instead of just quantitative data. While traditional analytics tools like Google Analytics provide data on page views, bounce rates, and conversion rates, user experience analytics takes a deeper dive into the user experience by also examining user behavior and feedback.

There are several user experience analytics tools available that can help you collect data on how users interact with your product. Here are just a few examples:

  • Session replays

Session replay is a tool that records user sessions on your website or app and provides you with a complete replay of their interaction (including the environment). It lets you see what users are doing on the page so you can spot with precision the areas they find confusing – or when a technical issue prevents them from moving forward.

Even if you don’t have the time to watch countless long sessions, AI-generated session replay summaries can help you pinpoint the gold nuggets with ease.

  • Heatmaps

Heatmaps visualize an aggregate of user behavior by showing you where users click and how far they scroll on your web pages. This data can help you identify popular areas of your website or app and areas that just don’t get enough love and need rethinking.

  • User feedback tools

These can come in the form of surveys, feedback forms, or reviews. Collecting user feedback can help you understand their pain points in their own words and provide insight into how you can improve your website or app to better meet their needs (let’s face it, sometimes there’s a discrepancy between what we think their needs are and what their needs truly are).

There are various metrics that you can use to measure user experience. Here are a few examples:

  • Rage and dead clicks: these are important frustration signals that you can monitor with click trends charts. As the names suggest, rage clicks and dead clicks signal a mismatch between user expectations and the result of their actions. By working to reduce the times people are met with such a mismatch, you can greatly improve the user experience.
  • Conversion rates: this metric measures the percentage of users who complete a desired action on your website or app, such as making a purchase or filling out a form. By analyzing conversion rates, you can identify areas where users are having trouble completing the desired action and make improvements to reduce churn at crucial steps in the user flow.
  • Time on site: This metric measures how long users spend on your website or app. By analyzing time on site, you can identify areas where users are spending a lot of time and areas where they’re leaving quickly. This can guide the prioritization of your development efforts (helping you focus on the most visited areas). Pair time on site with daily active users (DAUs) and you can examine the overall health of your product.

All of these tools and metrics are an essential part of the stack that can set you up for success. The trickiest part is learning how to read the signs…

And what is churn, you ask?

What is churn?

Churn rate refers to the rate at which customers discontinue using a product or service. It’s similar to a funnel drop-off in online stores and is a critical metric for businesses that rely on recurring revenue streams, such as subscription-based models, because it directly affects a company’s monthly or annual recurring revenue (MRR/ARR). A high churn rate indicates that a significant number of customers are leaving, resulting in a decline in revenue. This can be a severe issue for businesses, as acquiring new customers is often more expensive than retaining existing ones. That’s why you must monitor the churn rate closely and implement measures to reduce it to maintain your ARR and profitability.

There are several types of churn – related to the price of the product or service, the product/market fit, the user experience, etc. In this article, we’ll focus on the latter type.

What is a healthy churn rate? This depends on your industry but for B2C companies 2-8% is considered healthy, while for B2B, anything above 2% may be disastrous.

So… User experience analytics can reduce product churn?

No, silly. These are merely tools – they can’t do something instead of you. But they can make your life a lot easier. User experience analytics can be a powerful enabler – by analyzing user behaviors at scale, they can enable your team to uncover pain points in the product that are causing users to leave. Here’s how:

Identifying Pain Points

User experience analytics can help you identify where users are struggling with your website or app. By analyzing user behavior and feedback, you can identify areas of the product that need improvement. For example, if users are dropping off during the checkout process, user experience analytics can help you identify the specific steps in the process that are causing users to abandon their purchase. You can use funnels to identify the major drop-off points, then watch session replays of users who dropped off at these points to find common characteristics of the sessions – maybe it was a technical issue, or maybe users found your UI too convoluted?

Improving the User Experience

Once you’ve identified pain points in the product, user experience analytics can help you make improvements to the user experience. For example, if it’s a technical issue, you can use the replays and the associated error logs to aid your product team in resolving the issue. Or, if it is a UI problem, you can work to redesign the underlying experience and map a better navigation on top of it so your customers find it more intuitive to move towards their desired outcome. Last but not least, if there is no issue with the product itself but users find it unintuitive to navigate, you can invest more time and resources in onboarding.

Case studies have shown that user experience analytics can be an effective way to reduce churn and improve user satisfaction and retention. For example, a mobile game company uses user experience analytics to analyze behavior and feedback and discovers that a large number of its users are abandoning the game after a certain level – they may find it too difficult to pass a certain obstacle, or there may be a bug. By identifying the specific pain point that’s causing users to leave, the company can address it – by decreasing the difficulty level or solving the bug. This helps them increase user satisfaction and retention, reduce churn and ultimately, increase revenue.

Any business can reap the benefits of user experience analytics but for some it may be of critical importance – for example, McKinsey & Company found that telecoms can reduce churn by 15% by using advanced analytics.

What’s more, users are more likely to recommend a product that they have had a positive experience with!

User Experience Analytics: The Strategy Part

Now that we’ve discussed the importance of user experience analytics in reducing product churn, let’s explore how to implement and use these tools in your product.

User Experience Analytics: Infographic

1/ Determine your goals & metrics

The first step is to determine your goals. What are you hoping to achieve by analyzing user behavior and feedback? Are you looking to improve conversion rates, reduce churn, or improve user satisfaction? This step is vital in any UX analysis because identifying your goals will help you determine what data to collect and how to analyze it. Let’s say that your specific goal here is to reduce churn by x% by the end of the next quarter. How to calculate your churn rate? Follow this simple formula:

(Lost customers / All customers at beginning of period) x 100

2/ Choose your analytics tools

There are many analytics tools available for collecting and analyzing user experience data: Google Analytics, Mixpanel, Amplitude, SmartLook. Choose the tools that best meet your needs and align with your goals. May we suggest you take a look at SessionStack – the one-and-done user experience analytics tool that allows you to monitor all parts of the journey in your quest to reduce churn?

3/ Collect both qualitative and quantitative data

User experience analytics should include both qualitative and quantitative data. Qualitative data may include user feedback and session replays, while quantitative data may include metrics like conversion rates and DAUs. By collecting both types of data, you can gain a more comprehensive understanding of user behavior and pain points.

4/ Analyze the data

Once you’ve collected user experience data, it’s time to analyze it. Look for patterns in user behavior and pain points in the product. Identify areas where users are dropping off or experiencing difficulties, and look for opportunities to make improvements so that you improve the core metrics you set out at the beginning. 

For example, you can collect users in two buckets: those who stay and those who churn. Studying the habits of both types can give you valuable insights into their demographics, firmographics, psychographic, and technographics. Notice how each ‘bucket’ uses your app, the journeys it takes, and how it interacts with other brand touchpoints (customer support and social media, to name a few). 

5/ Use the data to make improvements

Finally, use the data to make improvements to the product. Address the pain points that users are experiencing, and make changes that will improve the overall experience. Be sure to track the impact of these changes over time, and continue to collect and analyze data to ensure that the product is meeting user needs and expectations. If needed, go back to step 1.

What does this look like IRL? Let’s unpack a use case – a meditation platform that sees an increase in churn after a recent feature update. Here’s how they can go about finding the culprit:

  1. User segmentation based on the current user status: segment only users who have churned since the last update. 
  2. Funnel analysis of the most common user journeys taken, specifically those related to the last update. Retroactive data can be used to create a benchmark for a similar journey.
  3. Find the most significant drop-off points. Look for deviations from the benchmark.
  4. Watch session replays of churned users that contain these specific drop-off points. Look for common issues (such as technical issues or people who are confused about the navigation of the new feature).
  5. Pinpoint the issues and share all pertinent data with the UX/engineering team so that they can start developing solutions.
  6. In the meantime, Customer Success teams can use the knowledge they now have about the issues and aid users to overcome them by better onboarding or support procedures.
  7. Once the solution has been deployed, monitor it with funnels to spot whether it’s working. 

User Experience Analytics: The Best Practices Part

User Experience Analytics: Best Practices

If this is the first time you are doing a UX analysis (or using user experience analytics altogether), you might be confused by some common misconceptions about the process. To make things clear, let’s unpack a few of the most common ones.

  • Avoid confirmation bias: User experience analytics should be used to inform decisions about the product but you should steer clear of cherry-picking the data only to confirm your assumptions. Confirmation bias is a real thing that can take your attention away from real usability issues and towards imaginary ones.  Always have a strategy on how to use the data to identify pain points and opportunities for improvement, and make sure you don’t just follow some baseless assumptions.
  • Collect data from multiple sources: Collect data from a variety of sources, including web analytics, user feedback, and session replays. By making sure you have a complete analytics arsenal, you can gain a more comprehensive understanding of user behavior. The pitfalls of using only one source are numerous and they all involve a lot of time spent on things that don’t matter. 
  • Analyze the data regularly: Analyze user experience data regularly to ensure that the product is meeting user needs continuously. Use the data to identify trends over time as this will help you easily spot any deviations from the norm and inform the need for a more in-depth analysis of what’s going on. What’s more, following up with analysis after every major (and even minor) change can help you see whether your product strategy is on point. One very useful way to make the most of user behavior data is to study the users who stay to attract more of them in the first place!

To put it in a nutshell…

As inescapable as churn is, there are many ways in which businesses can proactively seek to reduce it. User experience analytics tools can provide a treasure trove of actionable insights in the fight to seduce and retain customers. From funnel analysis to session replay, they can help you build a bullet-proof plan to tackle churn in an informed way so you can weave anti-churn tactics into your product strategy. Start today with SessionStack – the digital experience analytics platform that can give you all important user experience insights & a lot more in one neat package – for free!

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