An introduction to cohort analysis, customer & revenue retention.
Cohort analysis is a flavor of behavioral analytics that creates groups of users based on common characteristics which can be used to track and understand their actions.
It aims to show how the activity of each group changes over time such that businesses can ask more specific and targeted questions like:
- Which customers have the highest engagement?
- Which cohorts of customers have the best retention over time?
- Which customers tend to spend more and when?
- When do customers tend to churn?
Keeping this in mind, let’s take a look at cohort analysis techniques in more depth!