Cohort Analysis: The Most Important Way to Analyze Growth

I've used cohort analysis throughout my growth career to understand our efforts to unlock repeatable and scalable growth initiatives.

Why is Cohort Analysis so Important?

High-level reporting doesn't give you the details to drives meaningful insights. Consider this example: Your app or service's engagement or revenue is growing WoW in line with marketing and advertising spend. High and to-the-right. Things are groovy - it looks like we better continue spending!

But Wait!

Are you sure doubling or tripling down on marketing and advertising will drive the results you're looking for?

Here is what you should do.
Find out where your success is coming from by cohorting your data. If you are seeing revenue or engagement increasing WoW, peel apart the success by evaluating what groups of users are contributing to the growth of your revenue.

Questions to ask of a Cohort:

• When were the users acquired? Are older cohorts driving more success than new ones?
• Where were the users acquired from? Maybe organic traffic is pulling the weight of poor-quality users from display ads.

Once you've looked at the composition of your recent success, you can make more informed decisions on what to do next.

Note: this is a simplified example of how cohort analysis can unlock meaningful insights. If you want to dig deeper into your own problem set or growth data, feel free to send me a message. I LOVE cohort data.