Cohort Analysis
Definition
Grouping customers by when they first bought, such as January 2026 buyers, and tracking how much each group spends over the following months.
Want a deeper explanation?
Cohorts show whether your customers are getting more or less valuable over time, which blended averages hide. They are the honest way to measure LTV and payback.
They are especially useful after a pricing change, new channel or big promotion. Watch for: growing revenue driven only by new customers while each cohort repeats less, which means acquisition costs will keep climbing.
Example
Customers acquired in January spent $62 on average in their first 90 days, while February's cohort spent $48, a sign that a February promo drew lower-quality buyers.