Product School

5 Reasons Why Product Managers Have to Understand Data

Ellen Merryweather

Author: Ellen Merryweather

January 9, 2023 - 5 min read

Updated: January 24, 2024 - 5 min read

We love talking about data. As product people, it’s our bread and butter. We’ve previously discussed Product Data Management, and taken a look at some of the best data visualization platforms for PMs.

You don’t need to be a data scientist to be a product manager. You don’t need to have any serious data analysis experience to start your Product Management path.

But the best products are data-driven products, which means you need to get comfortable with handling data on a day-to-day basis.

In Product Management, the most important things are to be able to work with your team, understand who you are building for and why. How do you get to know your customers? And how do you develop the ability to communicate with everyone? The key is building up your skillset as much as possible.

Don’t believe us? Here are the top five things that data can empower a PM to do.

Data on Apple screen

1. Understand your customers

To be a good Product Manager, you need to know what your customers want and which problems, habits and preferences they have. To figure this out, you first define the customer profiles.

Putting together the profiles is hard enough. But you need to understand them as well. This is where you need data knowledge. Your customers’ behavior affects your decision-making, as customer profiles allow you to make good decisions based on user experiences and desires.

Not only do you need to understand your customers before building your product, but you need to understand how they respond to it after launch. You’ll start receiving information about where the pain points are for your users and where they’re dropping off. If you understand data, you’ll understand exactly where those are and be able to prioritize which ones to fix first.

It’ll also help you when it comes to gathering feedback.

Feedback helps you find out what that group of customers think about your product. Product data provides a larger scale of answers to who exactly your customers are, what they use your product for and what they think about it. Having at least a basic understand of NPS scores can help a new product manager our immeasurably.

2. Make better product decisions

Learning data helps PM’s make better product decisions. One of Product Managers’ tasks is to find out whether the product is actually successful and how different changes affect the product. To do this, you need to combine feedback and data. Knowing how to interpret the data will allow you to refine your product.

You can have data without information, but you cannot have information without data

As you work on refining your product, a steady stream of data will help you make decisions based on fact, rather than on instinct.

This is especially important for building brand new products, or for Product Managers who are working in a new industry. When venturing into the unknown, you need as many hard facts behind you as possible.

3. Help you communicate with your data scientist

Teams work cross-functionally, so knowing data and being able to talk about it with your data scientists is a great advantage. It’s like learning their language. You’ll be able understand them and better communicate your questions and ideas to them.

There are other data-centric roles within big businesses, and if you want to move up the career ladder you need to be able to work with them. Data Analysts, Senior Product Managers, Product Data Managers, Group Product Managers, Data Analysts, Software Engineers, UX Designers…the list goes on.

Some people are naturally more data-centric than others. If you move to a new company you may find that, for example, your new Product Marketing Manager loves data. If you understand and can talk about data, your collaboration with them will be stronger.

Teams working

4. Optimize Your Time

Knowing data will help optimize your time by differentiating urgent things from other urgent things. This will require trade-offs. You’ll have to be aware that if you work on one specific thing now, it might affect another thing negatively somewhere else.

However, data should give you a pretty good idea what that change might be and what kind of effect it will have. Every time you choose to work on something, it also means not working on something else. Make sure you choose the right one.

In God we trust. All others bring data.

5. Manage Stakeholders and Align Product Teams

Without data, you’re just another person with an opinion. When it comes to influencing team members, and getting them aligned on one product vision, data is key. Data helps you to back up your opinions because, after all, data doesn’t lie.

Not only will this help with team members, but with stakeholders. If you need to convince someone important why the feature they requested won’t be shipped in V1, show them the numbers that prove it to be redundant. Data will also help you give useful updates for more data-driven stakeholders who want more details.

Start Understanding Data

So now you’re all fired up and ready to start understanding data, that’s great!

We’ve compiled a list of our top resources for learning more about data, and understanding how it drives product.

For those of you who love product books, check out Lean Analytics by Alistair Croll and Benjamin Yoskovitz.

If you prefer your learning in bite-sized chunks, these articles are just what you need:

Don’t worry, video-lovers, we’ve got you covered too! Head over to our YouTube channel to see all of our awesome talks!

Updated: January 24, 2024

Subscribe to The Product Blog

Discover Where Product is Heading Next

Share this post

By sharing your email, you agree to our Privacy Policy and Terms of Service