Cohort analysis

Cohort analysis is a type of report based on dividing users into groups, known as cohorts, in order to identify the behaviors and actions they carry out compared to other cohorts or groups of users.

That’s why cohort analysis is such a valuable tool in digital marketing: it lets us see how effective our strategies have been and helps us make future decisions based on trends and behaviors.

What are cohorts?

Cohorts are groups of users who show similar behaviors during a specific period of time. In other words, users who were acquired for the first time during the same period of time, which can be defined in days, weeks, months, or even years.

The importance of cohort analysis

Cohort analysis is undoubtedly a vital tool in the professional world, as it helps you make decisions with a greater chance of success. Among its advantages are:

• They provide a detailed view of how customers evolve over time.
• They help you find out whether the user experience (UX) is right.
• They make it easier to generate more revenue and increase the average order value.
• Thanks to advanced segmentation, they make decision-making easier.
• They help extend customers’ lifetime with the company.
• They help us pinpoint the reasons why a customer stops being one.
• They allow you to create specific actions for customer retention.

Cohort analysis in Google Analytics

Talking about cohort analysis usually means talking about Google Analytics, since it lets you gather the information you need to do this easily, thanks to the data it collects from a website’s users/visitors.

To do this, within Google Analytics you need to go to the Explore section and select Cohort Exploration among the different reports Google Analytics offers by default. After that, Google Analytics automatically builds a cohort report for all the users of your website or app, which you can customize however you like.

Main types of cohort analysis

The types are quite varied and depend on the kind of company and its sector, but the most common tend to be:

• Segment-based cohorts. They focus on customers who have already purchased a product or service before.
• Size-based cohorts. They subdivide customers based on size, in other words: whether they are small, medium, or large companies.
• Time-based cohorts. They deal with information about customers who performed a certain action within a specific period of time.

Related entries

• SWOT analysis
• Data Mining
• Customer Journey Map
• KPI (Key Performance Indicator)
• PDCA cycle
• Big Data
• CRM (Customer Relationship Management)
• Demand Analysis
• Conversion Rate

Discover how Mailrelay can help with your email marketing strategy.