Cohort analysis

Cohort analysis definition

Cohort analysis is a type of analysis that groups customers based on a shared characteristic or behavior, such as the date they made their first purchase, their geographic location, or their product preferences, and looks at how they continue to order over time, as a percentage of their initial act of purchase. By analyzing these groups, businesses can gain insights into customer behavior and preferences and identify trends and patterns that can inform sales and marketing strategies.

Use of cohort analysis by marketing & sales

  • **Date of First Purchase Analysis: **By grouping customers by the date of their first purchase, companies can understand when to prioritize their acquisition campaigns to maximize ROI.
  • **Acquisition channel analysis: **By grouping customers by their source, companies can prioritize the acquisition channels that attract the most loyal customers over time. 
  • **Product analysis: **By grouping customers according to the products they purchase, companies can analyze the ability of each product to be repurchased by customers. This data is highly correlated with the quality of the product and how well it meets the customer's needs.

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