[GTM glossary](/glossary.txt) Cohort analysis GTM Strategy & SaaS Metrics # Cohort analysis In short Cohort analysis is a method of grouping customers by a shared starting point, such as the month they signed up, and comparing how each group behaves over the following weeks or months. It separates real trends from averages. A blended retention figure can hide that recent customers churn faster than older ones; cohorts show it. ## How cohort analysis works You pick a grouping, a metric, and a time axis. Each row is a cohort, each column is time since the start, and each cell shows the metric, such as the share of customers still active. * **Example:** Say the January cohort has 100 customers. After three months 85 remain active; the March cohort of 100 has 70 remaining at the same point. That gap points to something that changed between January and March. --- ## Types of cohorts * **Time-based:** Customers who started in the same month or quarter. * **Segment-based:** Grouped by industry, company size, plan, or acquisition channel. * **Behavior-based:** Grouped by an action, such as completing onboarding or using a key feature. --- ## How GTM teams use cohorts ### Retention and churn Compare retention curves by cohort to see whether product, onboarding, or targeting changes improved things. ### Channel quality Compare cohorts by lead source. A channel that brings cheap sign-ups may bring cohorts that churn quickly. ### Revenue expansion Track revenue per cohort over time to see which groups expand and which contract. --- ## Steps to run one * Choose the question, for example "Do customers from partner referrals retain better?" * Define cohorts and the single metric to track. * Pull data from your CRM or billing system into a cohort table. * Look for curves that flatten, which signals a stable retained base. * Act on one finding, then re-check the next cohort. --- ## Common mistakes * **Cohorts too small:** A cohort of 10 customers moves wildly with one cancellation. * **Mixing definitions:** Changing how you define "active" mid-analysis breaks comparisons. * **Comparing unequal ages:** Compare cohorts at the same age, not the same calendar date. --- ## Cohort analysis FAQs **What is cohort analysis?** Cohort analysis groups customers by a shared trait, usually when they signed up or bought, and tracks how each group behaves over time. It reveals retention, churn, and revenue patterns that overall averages tend to hide. **How do you do a cohort analysis for SaaS retention?** Group customers by start month, pick a metric such as active customers, and chart each cohort by time since start. Compare curves at equal ages to see whether newer cohorts retain better or worse than older ones. **What is the difference between cohort analysis and segmentation?** Segmentation groups customers by who they are, such as industry or size. Cohort analysis groups them by when or how they started and follows them over time. You can combine both, for example by comparing cohorts within one segment. **Why is cohort analysis useful for GTM teams?** It shows whether changes to targeting, messaging, onboarding, or channels actually improved outcomes. By comparing cohorts, teams can tell which acquisition sources bring customers who stay and expand, not just sign up. Share term --- ## More related phrases * [Retention rate](/glossary/retention-rate.txt) * [Product-market fit](/glossary/product-market-fit.txt) * [Average revenue per account (ARPA)](/glossary/average-revenue-per-account.txt) ## Similar phrases * [Customer retention](/glossary/customer-retention.txt) Customer retention is a company’s ability to keep customers over time, measured by how many renew or continue buying during a given period. * [Net revenue retention (NRR)](/glossary/net-revenue-retention.txt) Net revenue retention (NRR) measures how recurring revenue from existing customers changes over time, including upsell, downgrades, and churn. * [Customer lifetime value (LTV)](/glossary/customer-lifetime-value.txt) Customer lifetime value (LTV) estimates the total gross profit or revenue a customer will generate over the whole relationship, and guides how much to spend to acquire them. * [Logo retention](/glossary/logo-retention.txt) Logo retention is the percentage of customers, counted by account rather than revenue, that you keep over a period. It is the inverse of logo churn. * [Churn rate](/glossary/churn-rate.txt) Churn rate is the percentage of customers or revenue a business loses over a given period, and it is a core indicator of retention health.