Metrics
Cohort Analysis
Grouping customers by acquisition date (or other shared characteristic) and tracking their behavior over time. Reveals whether newer cohorts are more or less valuable than older ones. A declining cohort LTV curve means your targeting is getting less efficient or product-market fit is weakening. An improving curve means your acquisition strategy is finding better customers. Essential for accurate LTV calculation and for detecting problems before they show up in top-line metrics.
Why it matters
Blended metrics mix cohorts with different behaviour and hide the trend that matters: whether the customers you are acquiring now are better or worse than the ones you acquired last year.
In practice
Group by acquisition month and compare the same elapsed age across cohorts. Comparing a three-month cohort to a two-year one is not a comparison.
Related terms