In this article, we show you how to visualize your customer cohort analysis and how to interpret these reports to grow your business.
Visualizing the cohort reports
To find the cohort analysis report, in your Machine Labs account visit the reports page and click on the Cohorts tab.
Understanding the cohorts report
A cohort is a group of customers who perform a certain event within a particular time frame - for example, this might be when the customer was recruited.
Our cohort analysis report allows you to display three different metrics: customer lifetime value (CLTV), customer retention, and orders.
Customer Lifetime Value (CLTV)
This report shows the actual revenue of your customers during the lifetime of your store. It's grouped by the time range in which customers first purchased from your store and, in the currency of your store, shows the customers actual purchase value over time.
You can group your data by months, quarters, or by years.
Just choose the relevant option in the dropdown menu on the top right hand side.
It is also possible to analyze just a portion of your database, by choosing the relevant timeframe in the dropdown menu.
This report shows how many customers buy from your store again. It's grouped by when customers first purchased from your store and shows how many customers are still buying over time.
You can choose to display this report as a percentage or number.
This report shows how many orders your customers place. It's grouped by when customers first bought and shows the average number of orders each customer placed and how many orders they place over time. It shows order frequency.
You can choose to view this report in by number of orders or by order revenue.
Export your report
All the different reports (lifetime value, customer retention, orders ) can be easily exported by hitting the export button in the top right-hand corner.
Dependent on which browser you're using, you may get a pop-up to make sure you're happy to download the XLSX export. Click allow.
Notes for early-stage business
Cohort Analysis is probably not very useful if you have been running your business for less than a year. As your business gets older the report will help you understand just how valuable your customers are.
Once you have a good understanding of how much a customer is likely to spend with you over their lifetime you can begin to think about what is a sensible amount of marketing cost to spend to acquire each customer.