Cohort Analysis Concept
What is a Cohort Analysis?
Cohort Analysis is a technique to examine the behavior of a segment of users with similar characteristics, in a given period of time.
That is allows assessing the evolution of metrics applied to specific segments. It is mostly used for know the life cycle of customers or users regarding a product or service.
Cohorts can be defined by age, date of registration, geographic location, sex, educational level or any other aspect important that characterizes a segment of the population under study.
The Cohort Analysis has application in metrics such as the increase in the number of customers or users, retention, conversion… etc.
What is a Cohort Analysis for?
It is used to know how certain groups of users or clients with similar characteristics behave, in a period of time and discover how they evolve.
Its great utility lies in the fact that It is not required to review a large amount of data, it is about categorizing the information according to relevant criteria. This analysis serves to design marketing strategies in order to reduce the loss of customers.
It is also valid for calculate the necessary budget for activities of catchment and retention of customers.
A Cohort Analysis serves to answer key questions that can help you to offer a better product or service to your customers, for example:
- How many clients have signed up in the last year?
- What is the product or service that attracts the most customers on the web?
- What are the common characteristics among clients?
- Why do customers abandon the shopping cart when they reach the payment methods section?
- How to captivate these customers to complete their purchase through remarketing?
- What is the average purchases of our customers?
- What is the added value that our clients are looking for?
Examples of Cohort Analysis
Suppose you need to know which of the subscribers to a newsletter who registered after a certain date and have become customers.
For this, it is necessary to choose the groups of users registered in the time range that you want to review. Subsequently, verify which of them made a minimum purchase in a specific period of time.
With this information, it is feasible to project the acquisition of subscribers and customers in the coming months, calculate the average value of purchases and income.
In this way, this information will make it possible to estimate the costs and budget necessary for email marketing campaigns, for example.
To design a cohort analysis, the procedure must include at least the following stages:
- Clearly define the cohorts.
- Export and review the data.
- Integrate and cross information with other sources.
- Visualize
- Review and design solutions.
More information on Cohort Analysis
To expand this concept, we suggest you read the following article:
