What is cohort analysis?
Cohort analysis is a technique used to identify and track groups of users who share common characteristics. It is often used in customer retention studies, as it can help to identify which groups of customers are most likely to churn. Cohorts can be defined by any combination of factors, including: age, gender, location, interests, purchase history.
The analysis can be used to track changes in behavior over time, as well as to compare the behavior of different cohorts. By understanding how different cohorts behave, businesses can make more informed decisions about marketing, product development, and other areas.
“To understand the absolute impact of certain group of customers in our overall store’s performance, it can be useful to take a look at the Cohorts by Total”
Alex Jost, FOUNDER OF rETENTIONx
What are cohorts?
Cohorts are groups of people who share a common characteristics or experience. In business, cohorts are often used to measure customer behavior and track marketing campaigns. For example, a company might create cohorts based on when a customer first interacted with the brand.
This would allow the company to track the behavior of those customers over time and see how they respond to different marketing initiatives. They can also be created based on geographical location, product purchase, or any other defining factor.
Why should you split your clients into cohorts?
If you’re like most business owners, you want to find ways to increase profits and scale your business. Cohort analysis can be a powerful tool to help you do just that. It is the process of grouping customers together based on shared characteristics.
This type of analysis can help you establish correlations between customers and profitability, especially in terms of scale. In other words, cohort analysis can help you figure out which customers are most likely to be profitable for your business.
Cohort analysis with RetentionX
To do cross selling effectively, you need to know which products are often purchased in combination. This way, you can stick to the preferences of your consumers and offer them an additional benefit with each purchase.
RetentionX provides useful insights about relevant KPIs. Among others you can check different cohort analysises: Cohorts by Average, Cohorts by Total, Cohorts by Retention Rate and Cohorts by Repeat Purchase Rate.
With this analysis you can identify patterns and trends among groups of customers. By analyzing customer cohorts, businesses can better understand how different groups of customers interact with their products and services. Additionally, cohort analysis can be used to identify opportunities for improvement and growth.
Cohorts by Average
To see how well your KPIs are doing over time, it is important to look at the Cohorts by Average.
Cohorts by Total
This is used to understand how much of an impact a certain group of customers has on your overall store’s performance.
Cohorts by Retention Rate
To keep customers coming back, you must figure out what keeps them interested. To identify those customers you can use this report.
Cohorts by Repeat Purchase Rate
This report shows you how many customers have made a follow-up purchase. You need to make sure that you get repeat customers to buy from you again to increase your turnover.
Explore RetentionX.
Join us for an interactive, introductory RetentionX demo and see how behavioral segmentation help you optimize your marketing budget.
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If you are not using a cohort analysis in your business, you should start now. RetentionX makes it easy to get valuable insights about your cohorts with beneficial reports. Get your free trial today to see how we can help you grow your online business.
The Cohort Analysis by RetentionX is available for the following eCommerce platforms: Shopify, Shopware & BigCommerce.
However, if you use a different system, you can still contact us at any time – we will find a suitable solution.
