Cohort Analysis

Framework

IRON LAW: Aggregate Metrics Hide Cohort Differences

A 70% monthly retention rate OVERALL can mask that January cohort retains
at 85% while June cohort retains at 50%. Aggregate metrics blend improving
and deteriorating cohorts together, hiding both problems and progress.
ALWAYS analyze by cohort before drawing conclusions.

Core Concepts

Cohort: A group of users who share a common characteristic in a specific time period. Most common: acquisition cohort (grouped by signup month).

Retention Matrix: Rows = cohorts (by signup month), Columns = time periods after signup (Month 0, 1, 2...). Cells = % of cohort still active.