Cohort Analysis

Cohort Analysis is a way for businesses to break down and look at the data from a group of customers over a certain period of time. A ‘cohort’ is just a fancy word for a group of people who share a common characteristic or experience within a defined period. For example, a cohort could be customers who signed up for a newsletter in January or users who made their first purchase during a holiday sale.

This type of analysis helps businesses to see patterns that might not be obvious when looking at all customers as a single group. It can answer questions like whether people who bought something during a sale are more likely to come back and buy more later. By comparing different cohorts, businesses can understand how specific events or time periods affect customer behavior.

Cohort Analysis is especially useful in business intelligence and data analytics because it allows companies to measure things like customer retention, engagement, and lifetime value more precisely. By focusing on the specific experiences of different groups, businesses can tailor their strategies to improve customer satisfaction and increase loyalty over time, which can lead to better business performance and growth.