What is Cohort Analysis?

Cohort analysis is a method of grouping customers by a shared characteristic — typically their acquisition month — and tracking their behavior over subsequent time periods. It reveals patterns that aggregate metrics hide.

Why It Matters

Aggregate metrics lie. Your overall retention rate might look stable while newer cohorts are actually retaining far worse — masked by loyal older customers. Cohort analysis exposes these hidden trends.

How It Works

Group customers by acquisition month (e.g., “January 2026 cohort”)
Track each cohort’s behavior over time (purchases, revenue, activity)
Compare cohorts against each other to spot trends

What to Look For

Are newer cohorts retaining better or worse? This tells you if your product and marketing are improving.
Where is the biggest drop-off? Month 1→2 typically has the steepest decline.
Which cohorts have the highest LTV? Correlate with acquisition channel, season, or promotion.

Types of Cohort Analysis

Acquisition cohorts: Grouped by when they first purchased
Behavioral cohorts: Grouped by first product purchased, channel, or spend level
Revenue cohorts: Track cumulative revenue per cohort over time