What Exactly is Customer Cohort Analysis?




Customer cohort analysis is the process of grouping consumers based on shared traits, studying those groups, and drawing specific conclusions about those groups’ behaviors and actions.

 

Customer cohort analysis, a subset of behavioral analytics, groups users into groups for the purpose of better tracking user engagement and consumer behavior.

 

What is a cohort of customers?

 

Simply put, a cohort is a group of people with shared traits and characteristics. A customer cohort is a collection of clients or users who take common actions over a predetermined period of time.

 

Users that signed up for a given product in May 2021, for instance, could be categorized as a cohort because they all shared the same action of signing up for the same product at the same time.

 

Using that illustration, a business could run a customer cohort analysis on the sign-up group from May to determine whether their behaviors are different from those of users who signed up for the same product in June. If users from the May cohort tended to drop the product more quickly than users from the April or June cohorts, it might be a sign that something needs to be investigated, like a bug in an earlier version of the app, or that other groups received more thorough onboarding that increased retention.

 

Why would one conduct a customer cohort study?

 

For marketing experts, development teams, and other stakeholders who may wish to better understand their customers’ behaviors in order to more effectively focus their messaging, modify their services, and satisfy customers’ demands, customer cohort analysis is a beneficial tool.

 

It is helpful to examine cohort behavior trends in order to increase retention and keep offering value to various user groups.

 

Customer cohort analysis gives businesses a way to examine how groups of consumers respond when subjected to particular conditions, which can produce more insightful information.

 

To see what consumers do when using your app, product, or website is a further justification for carrying out customer cohort analysis.

 

For instance, it may be a sign of a problem with onboarding if all new users open an app the day they get it, but only 10% do so five days later. This may impede users from understanding how to benefit from the app.

 

A customer cohort analysis could demonstrate that, providing you with the opportunity to learn why users first downloaded the app, what they hoped to achieve with it, and possibly even why their interest waned. Ideally, this will let you change direction to address the issue moving forward.

 

Observing the behaviors of people who use your app, product, or website is another justification for carrying out customer cohort analyses. Perhaps you’re curious about the number of people who read your blog or customer reviews before making a purchase.

 

You can learn more about how to modify your marketing plans and keep boosting sales, engagement, and client loyalty by assisting in the separation of certain user groups depending on these actions.