Cohort analysis is a method that groups customers by the period of their first purchase and tracks their behavior over time. Customers acquired in January are one cohort, those acquired in February another. It makes visible the decay that averages hide; whether customer quality is falling while you grow can only be seen this way.
If total revenue is growing while repeat purchase weakens, the brand is buying expensive, disloyal customers; that is usually the mark of discount-heavy campaigns and new channels. In the table, rows are cohorts and columns are months after acquisition; each cell carries that month's repeat purchase rate or cumulative revenue. The same method also firms up LTV estimates: the realized curve of older cohorts is applied to newer ones. To separate out channel effects, the cohort has to be broken down by acquisition channel.
If total revenue is growing while repeat purchase weakens, the brand is buying expensive, disloyal customers; that is usually the mark of discount-heavy campaigns and new channels. In the table, rows are cohorts and columns are months after acquisition; each cell carries that month's repeat purchase rate or cumulative revenue. The same method also firms up LTV estimates: the realized curve of older cohorts is applied to newer ones. To separate out channel effects, the cohort has to be broken down by acquisition channel.
If total revenue is growing while repeat purchase weakens, the brand is buying expensive, disloyal customers; that is usually the mark of discount-heavy campaigns and new channels. In the table, rows are cohorts and columns are months after acquisition; each cell carries that month's repeat purchase rate or cumulative …
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