Advantages of using cohort analysis
Posted: Mon Jan 20, 2025 5:14 am
Cohort analysis groups users based on shared characteristics, such as sign-up date or first purchase, to reveal insights into customer behavior and retention trends over time. Here's how it benefits your strategy:
Point out the actions or functions that keep users interested
Shows which updates are holding top users back the longest
Determine which channels attract loyal customers
Pinpoint where to invest to maximize customer lifetime value
Messages tailored to the behavior of each group
Track behavioral changes within each customer group
Make long-term decisions with detailed user data
Now that we know what cohort analysis is, let's see what forms it can take.
Types of cohort analysis
There are two main types of cohort analysis that offer unique insights into user behavior and chief vp sales marketing officers email list retention. Each type allows you to track different groups of users and uncover patterns that can help you refine your strategies.
Behavioral cohorts
Behavioral cohort analysis groups users based on specific actions or behaviors within a given time frame .
For example, you can create behavioral cohorts of users who have completed a purchase, subscribed to a newsletter, or used a particular feature in your app. You can track these actions to see how user engagement is trending and determine which behaviors lead to customer retention or churn.
This type of analysis helps you understand the “ why ” behind user actions. It helps you figure out which behaviors drive engagement and retention. It pinpoints which behaviors may be causing a user’s activity to decline or why users are churning.
In other words, it is a tool to optimize the user journey and improve customer lifetime value.
Acquisition cohorts
Acquisition cohorts, on the other hand, group users based on when they first joined your platform , whether by the date they signed up, the month they made their first purchase, or the time they first interacted with your product.
This analysis focuses on the “ who ” and the “ when ,” tracking users from the moment they are acquired and monitoring how their behavior changes over time. It can be used to identify trends in onboarding, product adoption, and early retention.
For example, if users acquired in Q1 of last year show higher engagement than those acquired in Q2, you can investigate what changes or strategies may have influenced that change.
Point out the actions or functions that keep users interested
Shows which updates are holding top users back the longest
Determine which channels attract loyal customers
Pinpoint where to invest to maximize customer lifetime value
Messages tailored to the behavior of each group
Track behavioral changes within each customer group
Make long-term decisions with detailed user data
Now that we know what cohort analysis is, let's see what forms it can take.
Types of cohort analysis
There are two main types of cohort analysis that offer unique insights into user behavior and chief vp sales marketing officers email list retention. Each type allows you to track different groups of users and uncover patterns that can help you refine your strategies.
Behavioral cohorts
Behavioral cohort analysis groups users based on specific actions or behaviors within a given time frame .
For example, you can create behavioral cohorts of users who have completed a purchase, subscribed to a newsletter, or used a particular feature in your app. You can track these actions to see how user engagement is trending and determine which behaviors lead to customer retention or churn.
This type of analysis helps you understand the “ why ” behind user actions. It helps you figure out which behaviors drive engagement and retention. It pinpoints which behaviors may be causing a user’s activity to decline or why users are churning.
In other words, it is a tool to optimize the user journey and improve customer lifetime value.
Acquisition cohorts
Acquisition cohorts, on the other hand, group users based on when they first joined your platform , whether by the date they signed up, the month they made their first purchase, or the time they first interacted with your product.
This analysis focuses on the “ who ” and the “ when ,” tracking users from the moment they are acquired and monitoring how their behavior changes over time. It can be used to identify trends in onboarding, product adoption, and early retention.
For example, if users acquired in Q1 of last year show higher engagement than those acquired in Q2, you can investigate what changes or strategies may have influenced that change.