Knowing your customers is crucial. Anything that helps you understand your audience more is always a good thing. So if you’re wondering what is cohort analysis, you’re already one step closer to understanding your customers properly.
You and I both know that headaches are bad and that we should do everything we can to avoid them. A cohort analysis is one of the ways to do this.
If you’re a Shopify Owner then this analysis is crucial as a Shopify Cohort Analysis is the one thing you need to properly segment your audience and beat your competition permanently.
What is Cohort Analysis?
Let’s quickly define what is Cohort Analysis:
A Cohort Analysis Takes a Group of People (i.e. Customers) and Groups Them Based on Certain Traits
But what are the best ways to group your customers in a cohort analysis? Here’s two:
- Acquisition and Retention:
- This is when you group customers based on when they made their first purchase, and study their retention over a period of time
- Behavioural:
- This is based on how someone interacts with you or your business. This is very popular with something such as Shopify.
How a Cohort Analysis Helps You
The main idea behind this analysis (like we said before), is that you’ll understand your audience so much better. But what does that actually mean?
Here are some of the benefits this analysis gives you:
- Understanding your Audience Over Time:
- People change over time. With this analysis, you’ll see HOW they change. Knowing this, you’ll find how to get your audience to keep coming back to you. If you have a Shopify store, this helps increase metrics like Customer Lifetime Value.
- Trends:
- People change over time sometimes because they develop habits. These habits spread to other people. This is what causes a trend. What trend is going on with your audience in their 5th month of knowing you? A Cohort Analysis tells you this.
- Benchmarking:
- Trends can be good or bad. But what you can do, is use those trends to benchmark your audience.
- If you have a business and by the 6th month, customers tend to stop buying, implement some changes in your products and services. Test it out on the new cohort and see what happens during the 6th month.
- Trends can be good or bad. But what you can do, is use those trends to benchmark your audience.
- Personalization:
- A Cohort Analysis can show you how to create an experience for your audience that keeps them coming back. What do they like? What do they dislike? Use all this data to keep them coming back to YOU AND YOU ONLY
By the Numbers
Empower your business with our Shopify Data Driven App
- ✔ Know Your Audience Behavior
- ✔ Deep Customer Segmentation
- ✔ Retarget With Integrations
- ✔ All The KPIs & Reports You Need
How to Use a Cohort Analysis Properly
You know what is cohort analysis, so how do you use it to benefit you? The real answer is what you intend to do with it.
Let’s say you want to use it to understand acquisition and retention, the cohort analysis you want would look something like this
This is an example of a Shopify Cohort Analysis that the companies we work with love to use to understand their audience.
Now let’s say you want to understand the behaviours of your audience, if you’re a Shopify owner, an RFM Matrix will help you
These cohort analyses are key to finding your next moves with your business and to take it to the next level. It’s always best to get your cohort analysis from a reputable analytics company such as By The Numbers.
By the Numbers
Empower your business with our Shopify Data Driven App
- ✔ Know Your Audience Behavior
- ✔ Deep Customer Segmentation
- ✔ Retarget With Integrations
- ✔ All The KPIs & Reports You Need
