I’ve read a lot of articles and blogs on cohort analysis, churn and customer retention, most of them are very technical & hard to understand. So, I decided to choose a different path and try to make it simple as well as actionable.

If you want to know more about cohort analysis, and how to apply it to improve your business, this blog is perfectly made for you.

Let’s jump right into it!

WHAT IS COHORT ANALYSIS?

A Cohort is a group of people who share a common characteristic over a certain period of time, such as first purchase date, signup date, the location they belong to, etc.,

Example: Class — 2020 is a cohort, and all the students who graduated in that year are parts of that same cohort.

In cohort analysis, we track these group of people over a certain period of time, and try to draw insights to get a better understanding of your product/service / Marketing campaigns, etc…,

Cohort analysis is a widely used method to reduce the churn rate and improve customer retention. Before we dive into the cohort analysis, first try to understand what is churn rate and customer retention.

CHURN RATE:

Percentage of customers who stop using or buying from your website/store/e-commerce site etc, within a given period of time. Churn rate is sometimes also called a ‘Rate of Attrition’.

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