Cohort Analysis: The Key to Data-Driven Product Decisions

Cohort analysis is a behavioral analytics method that divides data into groups with common characteristics, known as cohorts. It helps businesses understand customer behavior insights by breaking down users into groups based on shared attributes. This allows for more contextual and targeted insights compared to broad strokes metrics. Acquisition cohorts are based on when users sign up for a product, while behavioral cohorts focus on actions performed within the product after initial acquisition. Cohort analysis has various use cases such as locating where churn happens, optimizing acquisition channels, tracking different customer journeys, and finding where feature adoption excels or doesn't. To conduct a cohort analysis, one should set a clear goal, decide what to measure, define the cohorts, create cohort analysis charts, and test findings for results. Tools like Heap, Mixpanel, and Amplitude are recommended for product teams looking to implement cohort analysis.