What is a Cohort?

Cohort Analysis

A cohort is a group of users who share a common characteristic or experience within a defined time period. For example:

All customers who signed up in January 2023
Users who made their first purchase during the Black Friday sale
Subscribers who joined after a specific marketing campaign

👆 By the way, an interesting fact: The term “cohort” comes from ancient Roman military units. In business, we’re not conquering empires, but we are battling for customer retention! 🛡️

Why Cohort Analysis Matters

Cohort analysis helps you:

Understand customer behavior over time
Identify trends and patterns in customer retention or churn
Measure the long-term value of customer acquisition efforts
Make data-driven decisions about product development and marketing strategies

Types of Cohort Analysis

Time-based cohorts: Grouped by when they became customers
Behavior-based cohorts: Grouped by actions they’ve taken
Size-based cohorts: Grouped by purchase amount or company size

How to Do Cohort Analysis

Define your cohorts
Choose metrics to measure (e.g., retention rate, revenue, engagement)
Track these metrics over time for each cohort
Compare cohorts to identify trends and insights

Metrics to Track in Cohort Analysis

Retention rate
Churn rate
Customer Lifetime Value (CLV)
Average Revenue Per User (ARPU)
Engagement metrics (e.g., login frequency, feature usage)

Benefits of Cohort Analysis

Accurate Customer Lifetime Value: Understand how value changes over time
Product Improvement: Identify which features drive long-term retention
Marketing Optimization: Determine which acquisition channels bring in the best customers
Churn Prevention: Spot patterns in when and why customers typically leave
Revenue Forecasting: Make more accurate predictions based on cohort behavior

Tools for Cohort Analysis

Many analytics tools offer cohort analysis features:

Google Analytics
Mixpanel
Amplitude
Tableau
Custom SQL queries (for the data ninjas 🥷)