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What is the Purpose of Event Data?

Table of Contents

This is part 2 of the 5-part series on Customer Data. Here are parts 1, 3, 4, and 5.


Event data helps you understand exactly how your product is being used — whether or not are users performing critical actions and completing the tasks that will lead them to derive the product’s core value, or in other words, reach the aha moment. 

To learn more about Event data, check out part 1 of this series.

But it doesn’t just end at the aha moment.

Once you know how users are using, or for that matter, not using your product, you will be able to identify points of friction and answer all types of questions that arise when trying to understand user behaviour.

In essence, event data is crucial for teams to build better products and to improve the overall customer experience.

The benefits of gathering event data is best understood by looking at the user journey. It can be broken down into three key stages that are core to every company’s growth post user acquisition — activation, engagement, and retention.

Phase 1: Activation

Before you start gathering event data, it is assumed that you are already acquiring some users or at least have a plan in place to do so. Without users, there will be no events to track (events take place when a user interacts with a product).

Once users start using your product, the goal should be to activate them. What activation means differs for every product and it makes sense to define your own activation event.

Here are some common activation events for each industry that can help you define your own:

  • Ecommerce: Product Purchased
  • SaaS: Campaign Sent
  • Ride-hailing: Ride Booked
  • Music Streaming: Song Played
  • Video Streaming: Video Watched

It helps to look at your activation event as a transaction that once completed, helps the user derive the product’s core value. Once your activation event is clearly defined, it is a real pleasure seeing the rate at which users complete that event, as well as the path that leads them to do so. 

Side note: Product analytics tools such as Mixpanel and Amplitude make it really easy to view such metrics and understand the user journey via funnel analysis.

Hereon, users are considered as activated and the next phase is to engage them so that they remain active. For freemium products, the next phase is critical in converting free users to paid ones.

While monetization is also an important stage in a company’s growth, it has been excluded here since it often overlaps with one or more of the three key stages.

For ecommerce and ride-hailing, monetization takes place at the time of activation while products that rely on advertising revenue monetize users at every stage. 

Phase 2: Engagement

Activating users is a big milestone as it validates the fact that there is a need for whatever you are selling. However, a user never returning to your product after being activated is a cause for concern. Similarly, a user constantly returning to your product is a sign for celebration. 

In order to have users use your product regularly or become paying customers, it is essential to keep them engaged. Common engagement channels include emails and in-app messages.

Event data enables you to engage users based on their actions, allowing for a personalized experience across all channels. Additionally, event data also helps measure the impact of engagement activities and iterate them rapidly. 

Contextual Emails

A common and effective way to engage users is to trigger automated emails based on in-app activity. 

For instance, if a user signs up for your product but does not perform the activation event within a specified timeframe, sending them an email with helpful resources is key to engaging them and bringing them back to your product. 

Emails that are triggered based on events are also less annoying for users as compared to those that are sent as part of drip campaigns that do not take their actions into account. 

Further, you can combine user activity (event data) with user properties (entity data) to provide a highly personalized experience to users belonging to each cohort. 

An ecommerce brand can look at the product categories browsed by a set of users, and combine that information with their location to ensure that they only receive messages about products they are interested in.

Sending event-based emails is one of the best ways to keep users engaged and doing it right can have a sizable impact on your business. 

In-app Messages

Relevant and timely in-app messages can be highly effective in educating and engaging users while they are already interacting with your product. In-app messages should be triggered based on user actions (or events), and can be delivered via modals, tooltips, or a chat widget.

Also referred to as in-app experiences, these are highly effective for SaaS tools wherein users have to go through a series of steps in order to derive value from the product. Getting the user to the aha moment becomes a lot more effective by delivering contextual in-app experiences based on who the user is and what they wish to achieve. 

Measuring the efficacy of in-app experiences is essential and is done by setting up goals in the form of events that a user is expected to perform.

For instance, if a user does not perform the activation event even after going through a series of in-app messages that help them do just that, it indicates that the messages were not clear or relevant to that user and that there is a scope for improvement. 

On the other hand, if users are successfully activated and engage with your product via invitations, referrals, and feedback after receiving timely in-app messages, it is likely that these messages are working well, and doubling down on them is the way to go.

Users coming back to your product constantly is a sign of product-market fit, making the coast clear to double down on user acquisition. 

Users not coming back to your product can mean many things, one of which is poor user onboarding which can be fixed by delivering contextual messages to help users get to the aha moment.  

Phase 3: Retention

Retention is one of the most important phases in a company’s growth and is often the one that gets the least attention. 

Users actively using a product is no guarantee that they will continue to do so. A desire to upgrade comes naturally to humans and is not a sign of dissatisfaction. Therefore, it is likely that your users will jump ship when they can afford to invest in a better product. 

Similarly, a cheaper alternative that fulfils the needs of your users can easily lure them away.

Hence, in order to retain users, you need to stay on top of how your customers use your product, what their preferences are, and what their evolving needs are. By doing so, you can constantly add new features or offerings and make improvements to retain your customers. 

Like activation, it is essential to define what retention means for your business. Typically, users who perform the activation event on a regular basis are considered as retained. Below are some hypothetical definitions of common industries:

  • Ecommerce: Product Purchased at least once a month
  • SaaS: Campaign Sent at least once a week
  • Ride-hailing: Ride booked at least twice a week
  • Music Streaming: Song played at least twice a day
  • Video Streaming: Video watched at least twice a week

It is important to keep in mind that every business is unique and there is no one-size-fits-all rule to define retention. The average revenue per user or ARPU also plays an important role in retention. Businesses with low ARPU and those with very high ARPU can have very different definitions of retention even if they belong to the same industry.

For instance, a SaaS business with an ARPU of $100 per year will certainly not define retention the same way as another SaaS product that brings in $10K per year from each customer. 


The objective of this guide is to provide a high-level overview of how gathering event-data is essential for every stage of your customer lifecycle. It’s good to bear in mind that event-data has several other use cases and that it serves the foundation for all kinds of automation. 

Now that the context has been set, it’s time to delve deeper and understand the role of entities in the context of gathering event data.

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