What is cohort analysis and what does it mean for your business?
Google Analytics is an integral tool for all marketers. From the basics of web traffic to find out detailed information on how visitors interact with your site, Google Analytics has it all. However, Google Analytics data is only valuable if you’re using it to draw actionable conclusions about your website visitors.
The Cohort Analysis report in Google Analytics is an essential yet underrated report that offers key insights into trends and patterns in user behavior. Let’s take a deeper dive into what you can expect from this report.
In a nutshell, cohort refers to a group of people who share the same set of characteristics.
The aim of the cohort analysis report is to provide website owners with more detailed information on their users but since it is currently in beta, you will only be able to choose acquisition date as the cohort type. You can, however, add a specific metric, cohort size, and date range.
Here is what you need to know about the cohort analysis report.
Once you have logged into Google Analytics, click on the Cohort Analysis menu item under the Audience tab. You will now see a dashboard that contains a graph showing Acquisition Date cohorts by User Retention.
Day 0 on the graph represents each user’s first visit to your site, while the remaining days show when they returned. A sharp decline is perfectly normal so don’t be alarmed. It’s a challenge for all marketers to maintain a steady flow of returning visitors.
By scrolling past the graph, you will see a table that displays user retention graphics. The table is divided into groups based on acquisition dates. Each colour represents a different cohort of users. Look out for any rows that show very different retention rates as this is a good starting point for your analysis. A high-performing cohort could be a sign of a campaign that performed exceptionally well.
If you happen to run new campaigns according to a specific timeline, you may want to adjust the Cohort Size to show users by day, week or month.
While the default metric is user retention, there are also metrics that you can use to analyze your cohorts. If you want to find out more about the actions that users are taking on your site, use the Per User set of metrics. Examples of this include, Goal Completions per User, Pageviews per User, Session Duration per User and Revenue per User. If you would prefer to view the total per cohort for each metric, there is an option for that too.
Cohort analysis goes beyond the total number of users by offering more detailed information on different groups of people.
Cohort analysis is the opposite of vanity metrics because it tells you whether your data is improving or worsening over time, which offers marketers insights that are more actionable. Take churn rate for example. Most marketers know what their churn rate is but do you know which users are churning? This is where cohort analysis comes in handy.
If your churn rate is higher than you would like it to be, cohort analysis will not only identify which users are producing this high churn rate but it will also provide you with details on:
Having these details on hand makes it that much easier to adjust the way you target and engage with a specific cohort.
Cohort analysis is definitely going to become one of the most useful reports available on Google Analytics but it will require you to take your knowledge a little further because it goes beyond basic GA reporting. As Google continues to adjust and refine this report, use this time to learn more about how to use it and how it can benefit your business.