WHAT IS A COHORT REPORT?
A cohort report is comprised of a set of data that studies/ reviews behavior(s) of a group over time.
THE ATTRIBUTES OF A COHORT REPORT
A cohort reflects a time period that is interesting to your company. At FashioningChange we liked to look at things in two-week intervals so a cohort for us reflected a time period of two weeks.
Examples of behaviors that FashioningChange looked at included, but are not limited to: sign-up rates, click through rates on internal ads, sharing, purchase rates, and repeat purchase rates.
Examples of groups to FashioningChange included new users, customers from a particular referral point, woman, men, customer that indicated they cared about a particular cause, etc.
3 REASONS TO USE COHORT REPORTS
1.) Using cohort reports allows you to review and analyze data cleanly. Reviewing data over “all time” gives you a big picture view of your company but it makes it very difficult to understand patterns of behavior and progress over time. It also makes it hard to understand behavior for customer segments. Reviewing data in periods of time that are meaningful to your company allows you to see how your customers are performing today.
2.) Using cohort reports gives you the ability to see how customer segments are performing over time. If you’re looking at a particular variable like sign-up, retention, click through rate, etc. using cohort reports allows you to analyze how the variable in question performs over time for groups of customer segments like new customers compared to old customers. This allows you to understand your customer, make assumptions, and implement tactics to test assumptions that result in a better end user experience.
3.) Using cohort reports makes it easy to identify patterns and review them against product iterations or other attributes (like landscape dynamics). Analyzing data in groups over time makes it easy to recognize new trends and patterns that are a result of product iterations, new features, etc. If a section of data presents something unexpected you can dive deeper into that particular segment of data to learn information that will help your company. For example, if the data trends up then you can use that information to strengthen the actions you’ve taken. If the data starts to trend down you can use the data to quickly adjust your course.
MY FIRST EXPERIENCE WITH A COHORT REPORT
I first learned how to read cohort reports when I was a research assistant in college. I went to the University of California, Riverside to study psychology because of one professor, Dr. Robert Rosenthal. His work spanned everything that I was interested in learning. As a research assistant I would deliver the Conner’s Continuous Performance Test (CPT) to children from a near by school district for the purpose of assessing if the children were being over recommended by the school’s teachers to psychiatrists for ADD and ADHD medication.
I remember being horrified the first time I was asked to analyze a cohort report. The report was given to me printed from a dot matrix printer. When I first got it I thought it was a joke and giggled which quickly turned into an embarrassing situation, as there was no joke to laugh at (they really used ancient printers). Fearful of separating the sheets of data I carefully unfolded the stack of paper and laid it across several desks. The long strings of data felt like a sea of numbers swallowing me whole. I had never seen a cohort report before and was intimated by the Ph.D. lab team so I did what any college student slightly in over their head would do…run to the ladies room and call someone I knew who had experience with cohort reports. After a twenty minute “bathroom break” I was ready to tackle the data. While I was still unsure of myself I took the basic information provided to me and was able to recognize some trends that earned me the respect of the lab team (who later shared they bet on my inability to come to any accurate conclusion).
HOW TO READ A COHORT REPORT
Reading a cohort report is not hard. In the video below I demonstrate the basics:
KissMetrics also has a good explanation of how to read a cohort report here.
WHY USE COHORT REPORTS?
Cohort reports are like cheat sheets of information to help you make better business decisions. While cohort reports provide a great foundation to make decisions I believe the data has to be tempered with qualitative information and gut instinct. The great thing about cohort reports is that if there is a difference in opinion regarding strategy A/B tests can easily be implemented and reviewed.
Hope this post is helpful. My next post will review how to build a cohort report.