Definition
Cohort analysis groups customers by a shared start point (e.g., signup month) and tracks outcomes (retention, revenue) over time.
Example
A common cohort view is monthly signup cohorts: track what % of each cohort is still active (or paying) after 1, 3, 6, and 12 months.
How to use it
- Use cohorts to see where retention drops (month 1 vs month 6+).
- Segment cohorts by channel and plan to see quality differences.
Common mistakes
- Mixing cohorts with different start definitions (signup vs paid vs activated).
- Comparing cohorts without controlling for seasonality or product changes.
Why this matters
This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.
Practical checklist
- Write a 1-line definition for "Cohort Analysis" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Use a calculator that references this term (e.g., Retention Curve Calculator) to sanity-check assumptions.
- Read the related guide (e.g., Retention curves: how to read them and why they matter) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- Retention Curve Calculator: Model a simple cohort retention curve (logo retention) and translate it into expected revenue and gross profit over time.
- Two-stage Retention Curve Calculator: Model a retention curve with different churn rates for early months vs steady-state, and estimate expected value over time.
- Cohort Payback Curve Calculator: Estimate when a cohort pays back CAC using a simple retention curve (two-stage churn) and optional expansion.
Guides
- Retention curves: how to read them and why they matter: A practical guide to retention curves: what they show, how to interpret churn vs retention, and how to connect retention to LTV and payback.
- Cohort payback curves: how to model payback with early churn: A practical guide to cohort payback: why payback matters for survival, how early churn affects payback, and how to improve it.
- Cohort analysis playbook: retention curves, LTV forecasting, and payback: A practical cohort analysis workflow: build retention curves, forecast LTV, and translate retention quality into payback and growth decisions.
- Retention & churn hub: cohorts, GRR/NRR, and retention curves: A practical hub for retention measurement: churn rate, GRR/NRR, cohort retention curves, and how to set retention targets without getting misled by noise.