Retention Cohort Analysis Examples
I need help on a project in which I need to put together a retention cohort analysis based on historical data. Does anyone have any examples on how to put this together? I've even tried reaching out to tutors on various sites with former finance backgrounds, and nobody seems to know how to do something like this.
This site seems to do a good job exposing user and revenue cohort analysis.
The link doesn’t seem to be coming through but you can search: “Cohort analysis - 4 ways to analyze your product retention rate” on Mobile Spoon.
Conceptually, you want to take the trended data (probably monthly revenue by customer) and tag each customer to a starting cohort based on the year that they launched. Then index each period of actual data based on time since start (e.g., for a 2016 cohort, 2016 revenue = Year 0, 2017 revenue = Year 1, etc.; for a 2017 cohort then 2017 = Year 0, 2018 = Year 1...).
Then use sumifs or a pivot to make a table that traces out revenue for each cohort by period (0, 1, 2, etc.) with cohort year running down column 1 and period running across columns 2+. It should come out as a triangular table. Then beside it, you can add a calc that compares the revenue in each period to time 0 (so Year 0 = 100% (usually), then Year 1 = x%, Year 2 = y%...) and you'll see how much of each cohort gets retained over time.
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