Knowing your audience from A to Z: Cohort Analysis

Building your first customer base is only the first step. Your next move is to calculate, observe, and determine all the data about your customers to find out how to bring them a perfect experience and to ensure your brand is the ideal solution for their needs.

Out of all the moves, you as a marketeer could conduct, there’s one that ensures efficient analysis of data collected from your sources. It is called cohort analysis, and you can find out everything you need about it in this detailed article: Or continue reading our take on cohort analysis and find out how you can ensure that your customer retention rates are as efficient as possible.

So, what is cohort analysis? It is the method used to analyze your users’ data, their behavior, and the course of action they take using any of your services: online stores, apps, websites, or and mobile games. It is the way to divide your customer base into segments, so-called “cohorts” of users performing the same actions and having similar traits. Cohorts are used for:

  • Generating leads
  • Direct targeting
  • Making a connection between customer’s actions and their engagement
  • Ensuring that your buyer’s journey will always take them to your platform
  • Researching cycles your customers go through

Cohort analysis reveals why, how, and when the dynamic of your business grows or fades. There’s a huge difference between the growing amount of your clientele and making your existing user-base more active and engaged. Segment your audience and target different cohorts directly to be confident that you offered the perfect solution to every single client and motivated them to return.

How can analyzing customers in cohorts help your business?

Ensure your LTV is at its best

Throughout the time you work together with your client, they generate revenue. Total revenue from a client is called Lifetime Value, or LTV in short. Did they grow tired of your service? Analyze their actions to find out the reason. Make plans for the future using this information and fine-tune your advertisement campaigns.

Hold onto your top clients

Select the core of your audience and to introduce new unique benefits fit for them. Those are the most loyal customers you have, so don’t lose them.

Enhance the quality of the test results

You may use the good-old A/B testing to find out how the user-base as a whole reacts to your service’s improvements and changes. Or analyze members divided into cohorts: that’s how you find out how groups of the audience react, interact, and use every feature you introduce, like, for example, the new design. Which group of clientele adapted to it, which one disliked it? Their value and change in conversion rates may influence your decisions going forward.

Analyze your application

There’s nothing better to analyze your app than cohort analysis. Find out how does it perform with different groups, which activities are working and which ones you should improve, who’s more likely to install and return to the app daily.

Steps you should conduct to analyze your audience

  1. Extract the user’s data. Ensure the research’s reliability by using raw data.
  • The set of user parameters should consist of different but common characteristics, like the time of registration and number of purchases.
  • Create a table in Excel or a similar service and place the data there.
  1. Divide members into cohorts. Group your users by selected parameters.
  2. Set up the prime parameter for analyzing, like the KPI, to observe the dynamic over a select period.
  3. Compare the cohorts. Ensure you know the number of customers in each cohort so that your analysis is more precise.
  4. Put your results into graphs and diagrams to get easy access and understanding of the processes conducted.

Some instruments online can conduct similar research, yet cohort analysis is the most flexible solution on the market right now. If you decide to analyze and use your data, select the most precise instrument to do so, as your analysis influences following marketing and advertisement campaigns and funds used on them.

LTV is always will be a common denominator in the analysis you partake. By researching the different cohorts, you’ll discover how your user base changes and which actions impact members’ retention and fluctuations. To find out the exact info you need, group users by:

  • Sorting users by date can help uncover their total cycle and find out the dynamic behind, say, installation date and the last launch.
  • Discover different behavioral data by sorting users using your service by how well they react, use (or ignore) new features or prices.

How to use the research data to improve your business?

By analyzing your user-base, you can determine the audience that should be the focus of your marketing efforts. How well are your users react to notifications, what are the most popular features of your service, which aspects motivate users to return? Find out how your perfect customer thinks, and you’ll know how to make them interested.

Each step you take influences a cohort of users. If your most valuable clients react well to a particular offer or perform an action – observe it, analyze it, use it to decrease the churn rate, and improve retention. Base different offers on different cohorts and achieve the maximum results.


You may segment your audience differently, but dividing it into cohorts seems like one of the most innovative and efficient solutions. Not only can you select your most valuable customers, but with personalized offers and insight into user’s behavior, you may maximize the efficiency of every group of clients, enjoying the benefits of your service and coming back for more.