Cohort analysis is an effective way to comprehend customer behavior, but it can seem intimidating at first. In this guide, we will explain how to rapidly view and comprehend customer retention figures using By the numbers, a Shopify application.
Before we dive in, let’s go over some definitions:
Cohort – A group of customers who made their first purchase within a specific time period.
Retention – A customer who makes a purchase in a subsequent month after their first purchase.
Getting Started with Cohort Analysis
If you haven’t already installed By the numbers, do so now. It offers a free 14-day trial with no need for a credit card. Then, choose the Reports section from the left navigation bar and search for the Retention by Cohort report found under the Customers section and a chart like this should appear:
The above chart provides the following information:
- The first month of purchase for each cohort
- The number of customers in each cohort
- The percentage of the cohort retained in each subsequent month
By being able to see which marketing campaigns were more successful in terms of customer retention, you can easily deploy more sophisticated retention and repurchase campaigns. You can choose to discontinue campaigns that performed poorly or double down on the ones that performed well.
For more detailed information, please refer to the help documentation on cohort retention.