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What's cohort analysis?

Understanding the cohort analysis report.

A cohort is just a group of customers who have something in common. Our Cohort Analysis report is grouped by the month the customer was recruited and then shows how much they spend in the following months.

So for February 2020 the +1 column will show what customers spent in their second calendar month and the +2 column will show what they spent in the third calendar month.

Cohort/Month +0 +1 +2 +3
Jan 2020 US$2,700 US$2,010 US$1,800 US$1,750
Feb 2020 US$3,300 US$2,991 US$2,200  
Mar 2020 US$2,755 US$2,134    
Apr 2020 US$5,200      

 

Cohort Analysis is probably not very useful if you have been running your business for less than a year. As your business gets older it 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 a customer.