What does a product analyst do for companies?

Product analysts are essential to a company’s success. They analyze data to identify key product insights and improvements. As a person who has managed many product analysts during my 15 years in the workforce, I can confidently say that they make a difference. So, what do product analysts do, and why are they so important to businesses?

What is a Product Analyst?

Product analysts are one of the most common jobs you’ll see in companies today. They are the data-oriented decision makers who help companies better understand their products and customers. I’ve interacted with many product analysts over the years, and their impact is substantial.

A product analyst uses data to make products better and drive business growth. They gather, analyze, and interpret data on product performance, customer actions, and/or market trends. Their analysis informs product development, marketing ideas, and business strategy.

You can find product analysts across a variety of industries.

• Tech companies
• e-commerce companies
• financial companies
• healthcare companies

All employ product analysts. Any company that has products or services can benefit from a great product analyst.

Product analysts are incredibly important because they are the link between data and insight. By identifying patterns and market trends, product analysts help companies make data-backed decisions about products. This results in

• happier customers
• more revenue
• a better competitive position in the market.

The U.S. Bureau of Labor Statistics predicts that market research analyst jobs will grow 19% by 2031. This is much faster than average, signaling high demand for these skills. If you’re considering becoming a product analyst, now is a great time to get started.

Product analysts also earn competitive salaries. The average product analyst salary in the United States is $73,369. This number varies based on experience, location, and industry, but as you become more skilled, your income potential increases significantly.

Essential Skills for Product Analysts

To excel as a product analyst, you’ll need a combination of technical and soft skills. Here they are:

Technical skills:

• Data analysis and statistical modeling
• SQL and database management
• Programming languages (Python R)
• Data visualization tools
• A/B testing and experimentation

Soft skills:

• Critical thinking and problem-solving
• Communication and presentation skills
• Attention to detail
• Curiosity and a learning mindset
• Collaboration and working with others

Most product analysts have a bachelor’s degree in statistics, mathematics, computer science, or business analytics. Some employers prefer candidates with a master’s degree, particularly for more senior roles.

Certifications can help you stand out from other candidates. Some popular options include:

• Google Analytics Certification
• Product School’s Product Analytics Certification
• IIBA Certification in Business Data Analytics

The average annual base salary for product analysts is $77,090. When you include bonuses and additional compensation, the average total pay is $94,308 per year. These numbers clearly demonstrate the demand for talented product analysts.

Keep in mind learning is a continuous journey as a product analyst. Technology and analysis techniques change quickly. Keeping up to date with the latest trends and tools will ensure you have a successful career.

Data Analysis Techniques for Product Analysts

You’ll use various data analysis techniques as a product analyst. These are the methods to extract valuable insights from data. Here are some of the most common data analysis methods:

Quantitative analysis techniques:

• Regression analysis
• Cohort analysis
• Time series analysis
• Cluster analysis
• Factor analysis

Qualitative analysis techniques:

• User interviews
• Focus groups
• Surveys and questionnaires
• Usability testing
• Content analysis

Product analysts use a variety of tools and software. Most product analysts use the following:

• SQL to query databases
• Python or R for statistical analysis
• Tableau or Power BI for data visualization
• Google Analytics for web analytics
• Mixpanel or Amplitude for product analytics

When analyzing and presenting data, product analysts should apply these best practices:

1. Start with a clear hypothesis or question.
2. Clean and validate your data before analysis.
3. Use appropriate statistical tests.
4. Create clear and compelling visualizations.
5. Provide actionable recommendations based on your findings.

Remember, the key isn’t simply analyzing data. It’s analyzing a data set in a way that produces insights to improve a product and a business at large. Therefore, always think about the business implications of a data set you analyze. For example, understanding how an agile coach vs scrum master can influence team dynamics can be a valuable insight.

Product Lifecycle Management for Analysts

Understanding the product lifecycle is important, as you can then identify what analysis the company or product needs at that specific stage. The typical product lifecycle includes:

1. Development
2. Introduction
3. Growth
4. Maturity
5. Decline

As the product analyst, your responsibilities change at each stage. In the development phase, for example, your job might be analyzing market trends and competitor products. During the introduction phase, you might monitor early adoption rates and early user feedback. In the growth phase, you analyze sales trends and user engagement data.

In the maturity phase, your job is to maximize market share and optimize business processes. Finally, during the decline phase, you might analyze why people aren’t buying the product and what improvements could be made to the product (or if it needs to be sunsetted).

Managing the product lifecycle effectively requires:

1. Data acquisition process at each stage of the product lifecycle
2. Your ability to analyze and report the most important metrics at each stage
3. Your relationship with the product manager or exec at each stage
4. Your ability to change your analysis based on product lifecycle

The biggest challenges of product lifecycle management include data inconsistencies, a changing market, and executives that don’t want to make data-driven decisions. To overcome these, ensure you have a data collection process at each stage of the product lifecycle, stay informed about market trends, and work on stakeholder management.

Career Path and Growth Opportunities

The product analyst career path has a lot of growth potential. Here are typical progression steps:

When you enter the workforce, you’ll likely land a job as a Junior Product Analyst or Associate Product Analyst. These positions primarily involve data collection, basic analysis, and report writing.

With more experience, you can qualify for roles as a Senior Product Analyst. In these positions, you’ll work on more advanced analyses, provide strategic recommendations, and help less experienced team members.

With even more experience, you could land a job as a Lead Product Analyst. These are typically the most senior analytics positions in product departments. You’ll help executives make analytics-driven decisions that improve the business.

To progress in your career, build these skills:

1. More complex statistical methods and machine learning.
2. Leadership and project management skills.
3. More business acumen and strategic thinking.
4. More skills in data storytelling and communicating with executives.

Some analysts also become Product Managers or Data Scientists. These role transitions can help you develop a broader skill set and access new career paths.

Finally, don’t forget to remain curious. The field of product analytics is always changing. You can stay up to date with the latest changes by attending conferences, reading industry publications, and participating in Scrum sessions.

Global Salary Trends for Product Analysts

Product analyst salaries can vary significantly depending on their location and other factors. Here’s a look at the average salaries for a product analyst in different countries:

Several variables impact product analyst salaries:

1. Experience level
2. Company size and industry
3. Location (city and country)
4. Educational background and certifications
5. Specific skills and expertise

In addition to the base salary, product analysts often receive these benefits:

• Health insurance
• Retirement savings accounts
• Stock/equity
• Paid time off
• Professional development budget
• Remote work flexibility

When negotiating your product analyst salary, do your research on the salary range for a product analyst in your city with your experience level. Then, communicate the unique value you bring to the role and don’t forget to consider the complete compensation package (not just the base salary).

Salary is just one component of job satisfaction, so also consider the opportunity for growth, work-life balance, and the company culture when evaluating job opportunities.

Collaboration with Cross-functional Teams

As a product analyst, you’ll collaborate with many different teams within the company. This cross-functional collaboration is key to translating data insights into actionable strategies. The main teams you’ll work with as a product analyst are:

• Product management
• Marketing
• Sales
• Engineering
• Customer support
• UX/UI design

Excellent communication skills are therefore essential to effectively work with these diverse teams. Here are some tips to communicate effectively with each group:

1. Tailor your key message to the specific group you are talking to. For example, use technical terms in your communication with an engineering group but talk about the business impact in your communication with an executive group.
2. Use visual communication to explain complex data. Most people are visual learners, so using charts, graphs, and dashboards can make your data insights easier to digest.
3. Proactively communicate data insights. Don’t expect other people to ask you for data – you should constantly communicate data insights to stakeholders.
4. Actively listen to understand the needs and challenges of each team. The better you understand their questions and challenges, the more relevant of an analysis you can provide.

Managing stakeholders is also important, as you need to set expectations about what the data can and can’t tell you and how long certain analyses will take. Additionally, you must communicate any limitations or assumptions in your work.

Cross-functional environments are also inherently political. Here’s how to navigate this:

1. Focus on the data, not people’s personal opinions.
2. Encourage an open discussion and questions, unless you have a very good reason to believe people are asking questions to be difficult.
3. Be willing to re-do analyses if something wasn’t right in the initial analysis.
4. Find common ground and discuss shared goals.

Ultimately, your job is to provide objective data insights that lead to better decision-making, so focus on that. Further, by building great relationships with these other teams, you’ll end up driving more impact from your data analysis.

Product Analytics Tools and Technologies

You’ll likely use various tools and technologies as a product analyst. Here are some of the most common tools:

• Google Analytics
• Mixpanel
• Amplitude
• Segment
• Heap
• Pendo
• Hotjar

And for data visualization, you’ll commonly see:

• Tableau
• Power BI
• Looker
• Data Studio

These are some of the emerging technologies in product analytics:

1. AI and machine learning (for predictive analytics)
2. Natural language processing (for analyzing user feedback)
3. IoT (for collecting product usage data)
4. AR/VR (for enhancing user experience analysis)

The best tools for you will vary. Consider:

1. The specific type of product you’re analyzing (web, mobile, IoT, etc.)
2. The volume and variety of data you’re working with
3. Your team’s technical chops
4. Integration options with your existing tech stack
5. Budget

Keep in mind that no tool is perfect for everything. Sometimes, you may need to use multiple tools together to get all the analysis done that you need, so be flexible and always be willing to learn new tools as the space changes.

Regularly reassess your tools to make sure they’re still the best fit for your analyses. As your product and analysis matures, you may need to swap or upgrade the tools you’re using for something more sophisticated. To aid in your analysis, employing behavior-driven development techniques can also enhance your outcomes.

Final Takeaways

Product analysts are essential to business success through data analysis. They have a varied skill set (both technical and soft skills) that allows them to effectively manage the complexities of product lifecycles and work cross-functionally with teams.

As the industry continues to evolve, there are ample opportunities for career growth and competitive salaries available worldwide. By learning the key tools and frameworks, product analysts can have a big impact on product development and company growth.