What Is Cohort Analysis?

Grouping customers by their signup date to track behavior and retention over time.

Grouping customers by their signup date to track behavior and retention over time.

Cohort analysis groups customers by their acquisition date (or another shared characteristic) and tracks their behavior over time. It reveals trends that aggregate metrics can hide.

For SaaS companies, the most common use is retention cohort analysis — tracking what percentage of each monthly cohort remains active over subsequent months. This reveals whether retention is improving or degrading over time.

Cohort analysis can also be applied to revenue (are newer cohorts spending more?), engagement (are users getting more active?), and expansion (are customers upgrading faster?). It's the most honest way to measure product improvement.

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