Understanding the cohort analysis report and customer lifetime value.
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 May 2019 the +0 column will show what customers spent in their first calendar month and the +1 column will show what they spent in the second calendar month.
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.