Analytics
What is Cohort Analysis?
Grouping customers by when they first bought, then following each group forward in time. It shows whether the customers you are winning now behave better or worse than the ones you won last year, which a blended average hides completely.
Why it matters in practice
A blended lifetime value number mixes loyal customers you won years ago with buyers you acquired last month, so it can drift upward while every recent buyer is worse than the last. Cohorts fix that by holding the start date still. Take everyone whose first order landed in January, then ask how many of them bought again by month three, and repeat for February and March. If January reached forty percent by month three and March reached twenty, acquisition quality is falling even though total revenue may still be rising. That is the kind of turn worth acting on early, and it is invisible in an all-customer average.
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