So, your company has a target audience (TA) and you want to know as much information as possible about it that is useful to you. That is, you need certain key indicators.
Such indicators can have a too great difference depending on external and internal facts that affect them at any given time.
What is the way out you needed to find so as not to get lost in this sea of information? This way out - is a useful analytical tool, which is called the method of cohort analysis.
- Advantages of cohort analysis for a successful strategy
- Steps in the cohort analysis process
- Focus on real results
Advantages of cohort analysis for a successful strategy
To understand the meaning of using cohort analysis in the marketing process, you need to define what, in principle, a "cohort" is. Cohorts are selected groups of target audiences that are united based on certain common characteristics over a certain time interval.
The meaning of the cohort analysis is to assess the key indicators of the selected groups / cohorts of users and to determine the correctness of the company's strategic activity. This analysis also allows you to track the activity of cohorts and their actions in time.
So further are advantages:
Getting client`s LTV with a further strategy of its retention
- LTV (Lifetime Value) - a necessary indicator in the marketing process. It will allow you to assess the level of your demand from customers.
- Identifying and motivating customers who are loyal to your company
Applying an innovative approach to split (A / B) testing
- Assessment of metrics for user sessions on sites or in installed mobile applications, taking into account the options for their different versions.
Steps in the cohort analysis process
1. Create statistical query.
Simply put, you need to identify the task - what data you intend to analyze.
With the correct process of receiving information, all the necessary data should already be in the storage. It remains only to transfer the starting data into a special form.
2. Establish a sign of cohort collection
It is necessary to select that general characteristic for user groups, according to which the analysis will be carried out. It can be any parameter common to all: day / month / year of order creation, geography, transaction status, etc.
3. Identify KPI and interval
In other words, it is necessary to select the result of the activity for which you want to carry out the analysis, as well as the time interval during which the cohorts were formed.
4. Draw up the summary table
The table is formed based on the summary information. To visualize the dynamics of cohorts, in addition to the final table, you can build a so-called "ladder table", and in the future - a cohort graph.
This completes your analytical process. It remains to say a few words about the cohort analysis helpers.
This is, first of all, one of the system resources suitable for beginners - Google Analytics. Its disadvantage - insufficiently flexible settings - does not prevent its application for the analysis of not very large projects.
Focus on real results
From all of the above, one simple truth becomes clear - cohort analysis can show us a real picture, which may in many respects not agree with our usual vision of the situation. And if so, then it becomes doubtful the effectiveness of our decisions.
Consequently, cohort analysis is an indispensable tool for modern analytics. It can be adapted for various tasks, especially since this method does not require any complex specific knowledge, tools and devices.
- Do you want to find out the reason for the dynamics of the customer base?
- Do you want to know what influenced a person's decision to come and buy?
- Do you want to make effective managerial decisions, focusing on the correct picture of the world, and not on the "average temperature in the hospital"?
The use of cohorts in these cases is not only justified, but is thus an indispensable tool that will make it possible to squeeze the maximum information out of the collected initial data. And the main feature of cohort analysis is that you do not drown in a huge sea of all kinds of indicators, but clearly understand what exactly led your strategy to a positive or negative result.
Undoubtedly, you have already been able to draw the only correct conclusion that cohort analysis is indispensable for assessing the effectiveness of the proposed management decisions. After all, the backbone of any business is the ability to concentrate only on those actions that are focused on a long-term and positive result.