How to analyse user behaviour with product analytics

The Bottom Line

To improve your product effectively, you must identify your 'Aha! moment'—the specific action that makes a user realise the value of your software—and then use your data to see how many people actually reach it. By observing where users drop out of your typical workflows, you can fix technical friction and double down on the features that keep people coming back.

1. Define your core user journeys

Before diving into the data, outline the 'happy path' you want a user to take. This usually starts with sign-up, moves through a first key action (like creating their first project or uploading a file), and ends with a repeat visit. Once you know what success looks like, you can compare this ideal path against the actual paths users are taking in your analytics tool.

2. Use funnels to find where users get stuck

A funnel shows the percentage of users who move from one step to the next. If 100 people start your onboarding process but only 10 finish it, you have a leak. Look for the biggest percentage drop-offs. Common friction points include:

• Overly long sign-up forms.
• Confusing navigation buttons.
• Unexpected paywalls.
• Technical errors on specific browser types.

3. Analyse feature popularity

In most software, 20% of the features drive 80% of the value. Use your analytics to see which buttons are clicked most often. If you find that a feature you spent months building is barely being used, you have two choices: improve its visibility (if it is actually useful) or retire it to simplify your product. This data helps you stay lean and focused on what works.

4. Segment your users

Not all users are the same. To get deeper insights, group your users into segments, such as:

5. Combine data with 'why'

Analytics tell you what is happening, but they don't always tell you why. If you see a massive drop-off at your payment page, the data might suggest the price is too high, or it might just be that the 'Submit' button is broken on mobile devices. Always use your analytics as a starting point for further investigation or user conversations.

Top Tip: Don't track every single click from day one. It leads to 'data fatigue.' Focus on the five most important actions a user can take and master those insights first.