Understanding Cohort Analysis

Some of you may know what it is, some may not and some have heard of it before but are not sure what it is. I’m talking about Cohort Analysis.

If you have been in the data analysis field for any period of time, you would know that cohort analysis is a very common data analysis method that entails you examine segments of users based on their sign on or acquisition date.

A cohort means a subset of users based on a date. So you can use different variables as the start date. For example, a common type of cohort analysis used in ecommerce companies is to analyse the behaviour of customers that made a first purchase during a particular promotion. This gives them an idea of how well the promotion performed, above and beyond the first sale. Did the customers continue to purchase after the promotion or did they churn? How does their spend compare with others?

Cohort Analysis in Google Analytics

cohort analysis in google analytics

If you’re new to cohort analysis, then Google Analytics is a great place to get your feet wet. It wasn’t too long ago that they implemented cohort analysis reports.

Cohort Analysis on Google Analytics is somewhat limited though in the sense that it can only measure a cohort based on the date of first session. That is the only Cohort Type they have at the moment, but we can still use that to learn more about cohort analysis.

Based on the screenshot above, you can see that 17.01% of the visitors that were acquired on Jan 27 came back again the next day. However, on Day 2, only 7.54% of that cohort came back.

The 17.01% of people that came back on Day 1 from the Jan 27 cohort is much more than the other days. Why is that the case? Now this is where you get the chance to do a deep dive on your marketing activities to find out what was working for them.

cohort analysis by segment

One of the good things about Google Analytics’ cohort analysis is that you can still segment the cohorts by certain variables. In the screenshot above, you can see that the previous cohort was segmented even further by the types of devices that they use to visit the site. Mobile and tablet traffic was especially high that day, accounting for most of the spike in traffic.

How you are going to use cohort analysis will depend on various factors. One of those is the type of website you are running or industry your are in.

If you are in ecommerce, you would want a better understanding of which sales drove traffic and sales, and what happened after that. If a customer that bought a promotional item on Day 1, did they return to buy anything else within a given time period? Or did they churn?

If you are a publisher, you want to better understand engagement over time such as how long visitors spent on your website or the bounce rate. This way, you can plan and create much more engaging content for your visitors.

Introduction to Google Analytics

I realized that my last post on big data might have been a bit too advanced for most readers of this blog. So I’m going to start off by talking about a technology that almost everyone who owns a website can use so that they can get started on learning how to gather and analyse data.

Google Analytics is a free analytics tool that is provided by Google. It was a game changer when it was introduced because all other analytics software was paid and this was the first true free version.

Why Website Owners Need Google Analytics

You use Google Analytics to help you answer some of the most basic questions that every website owner needs to answer. These include knowing how many visitors come to your site, which pages they come in from, the location of your visitors, do they visit via desktop, tablet or mobile, which pages on your website are the most popular and so on. At the more advanced level, you may want to start tracking things such as the number of visitors who go to your website who convert to a customer, what path or conversion funnel they took to convert, cohort analysis and so on.

Without Google Analytics, it would be almost impossible for you to know all this information.

Types of Google Analytics Reports

types of google analytics reports

There are various types of reports available on Google Analytics to help you in your analysis. These are pre-made, which means that you do not have to spend time setting them up.

Some of the most popular reports are included below:

Audience Reports

The Audience Report focuses on the behaviour and characteristics of your website visitors. You can find out things such as their age and gender, their general interests, where they live, what they do while they are on their site and the kinds of technology that they use.

Acquisition Reports

These will help you understand how your website visitors find their way to your website. You can break them down according to the main channels of traffic that include organic search, social, referral or direct traffic.

There are other reports here that allow you to go into a deeper dive for each channel. If you do decide to connect your Google Analytics to your Google Search Console, you will be able to learn even more about how well your site is doing in the organic search channel as it provides you with additional useful information.

Behaviour Reports

For me, I like diving deep into the behaviour reports as they help me better understand how my website visitors are consuming my content. Content takes a long time to create, so it’s important that my uses find them valuable if not I am just wasting my time.

The behaviour reports will let you see the top pages of your site, the top entry pages (where they come from) as well as the top exit pages (where people exit your site from).

You should also set up site search tracking as this will help you track the types of keywords that your visitors use to search around your website.

Site speed is also another important criteria in succeeding in online marketing these days. It is estimated that for every 1 second delay in site speed, Amazon could lose billions of dollars. Check your site speed and see what you can do to improve it.

What are your favourite reports in Google Analytics? Share with us in the comments section below and let’s have a lively discussion going on!