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Cohort Analysis

Cohort analysis is a statistical method used to research a group's behaviour over time. In the digital world, it's used to track users' behaviour and engagement over time to identify patterns, trends, and differences in engagement.

Using cohort analysis has its benefits. It helps you learn how various groups of customers behave over time. You can use that information to make informed decisions about the business's marketing and sales strategies. By understanding and considering the cohort analysis findings, you can target specific customer segments and increase their engagement and retention. It's also useful when it comes to optimising marketing spending. You can decide which customer groups are most valuable based on the possibility to convert or retain and optimise your spending by focusing on them.

For an effective cohort analysis, you have to determine clear customer segments, e.g. based on demographics, purchase history, or brand engagement. You should also use multiple data sources such as website analytics, CRM data, and survey responses to get a comprehensive look at the users. And don't forget to look for patterns over time – focusing on one point in time may strip you from discovering meaningful insights.

There are also several things to avoid. If your samples are small, don't base assumptions on them. Your samples should be representative of the population to be reliable. You also shouldn't ignore the outliers – check if they're skewing your results or whether there might be something worth following.

Finally, don't neglect to act on gathered insights. Once you have the results, don't be afraid to use them. Develop new strategies based on your findings and implement them.

Cohort analysis is an excellent way to determine what should be improved and inform your decisions about digital marketing and user engagement.

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