Cohort Analysis
Track groups of customers over time to understand retention patterns.
Explanation
Cohort analysis groups customers by when they first engaged with your product (usually by month) and tracks their behavior over time. This reveals whether your retention is improving, how different customer segments behave, and the long-term impact of product changes. It's much more insightful than looking at overall metrics.
Real-World Example
January cohort: Month 1: 100 customers, Month 2: 80 active (80% retention), Month 3: 65 active (65% retention). February cohort shows different pattern, revealing that a product change affected retention. Without cohorts, you might miss this trend in overall averages.
How to Apply
Group users by signup month. Track key metrics (retention, revenue, engagement) for each cohort over time. Look for patterns: Are newer cohorts performing better? When do most users churn? Which cohorts are most valuable? Use insights to improve onboarding, product features, and customer success.