Cohort analysis
Cohort analysis groups customers by when they started, or by how they arrived, and tracks each group’s behaviour or revenue over the following months. Averages hide change. Cohorts show whether customers who arrived last quarter, or through a given channel, behave better or worse than earlier ones.
Formula
value(cohort, month n) / value(cohort, month 0), for each cohort and n = 0…12Assign every customer to a cohort, such as their first payment month or their acquisition channel, then compute the same metric for each cohort at month 0, 1, 2 and so on, as a share of month 0.
Worked example
| Newsletter cohort, month 0 | $500 |
|---|---|
| Newsletter cohort, month 6 | $520 |
| Paid social cohort, month 0 | $800 |
| Paid social cohort, month 6 | $440 |
- Newsletter: $520 / $500 = 104%
- Paid social: $440 / $800 = 55%
Paid social brought more revenue at first, but newsletter customers are worth more by month 6.
How ProductLense shows it
ProductLense’s Revenue page shows cohorts by acquisition channel, source or campaign, months 0 to 12, with net revenue retained as a percentage of month 0 and the customer count per row. Cells are shaded from surface to accent so weak channels stand out.
ProductLense needs a billing connection with at least two months of payments and identify calls so each customer has a first-touch channel. The Growth plan or higher is required for cohorts.
Cohort analysis: questions
- What is cohort analysis?
- Cohort analysis groups customers by when they started, or by how they arrived, and tracks each group’s behaviour or revenue over the following months. Averages hide change. Cohorts show whether customers who arrived last quarter, or through a given channel, behave better or worse than earlier ones.
- How do you calculate cohort analysis?
- Assign every customer to a cohort, such as their first payment month or their acquisition channel, then compute the same metric for each cohort at month 0, 1, 2 and so on, as a share of month 0. For example, a newsletter cohort at 104% after six months beats a paid social cohort at 55%, even though paid social started bigger.
- Where does ProductLense show cohort analysis?
- ProductLense’s Revenue page shows cohorts by acquisition channel, source or campaign, months 0 to 12, with net revenue retained as a percentage of month 0 and the customer count per row. Cells are shaded from surface to accent so weak channels stand out.
- What does ProductLense need to calculate cohort analysis?
- ProductLense needs a billing connection with at least two months of payments and identify calls so each customer has a first-touch channel. The Growth plan or higher is required for cohorts.
- How is cohort analysis different from NRR?
- Cohort analysis is the method; net revenue retention is one metric you can run it on. ProductLense’s cohort grid uses net revenue retention, so each cell answers how much of a channel’s starting revenue is still paid that many months later.
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