Growth Metrics

Cohort Analysis

A method of grouping users by a shared characteristic — typically sign-up date — and tracking their behaviour over time.

Cohort analysis reveals patterns that aggregate metrics hide. When you track January sign-ups separately from February sign-ups, you can see whether a product change made customers stickier, whether newer customers are retaining better than older ones, and which acquisition channel produces the highest-LTV customers. The most common cohort is sign-up date: plot monthly retention by cohort and the result is a retention curve that shows how quickly each group shrinks. A healthy SaaS product shows retention curves that flatten above zero — customers who stay for three months are likely to stay for twelve. Cohort analysis is also used to measure revenue expansion: do customers who joined six months ago spend more than they did at month one? If not, the expansion motion needs work.