# What is Cohort Analysis?

What is Cohort Analysis? Grouping customers by a shared characteristic (month of first purchase) and tracking their behavior over time.

## How it works in practice

Cohort analysis answers: are customers I acquired in January worth more than those acquired in July? Without it, you might improve CR while lowering LTV — bringing in cheap customers who never come back.

## Related metrics

- LTV — cohort analysis is the correct way to calculate LTV
- Retention — cohorts show retention over time
- CAC — reveals whether CAC is justified
- Klaviyo — offers built-in cohort analysis

## Common misconception

'Cohort analysis is too complex.' In Klaviyo: Analytics → Cohort Analysis — 2 clicks. The basic metric — what % of month X's customers bought again in month X+1 — can even be calculated in a spreadsheet.

## How to fix it

Cohort retention declining? (1) Improve the post-purchase experience, (2) check whether products naturally drive repeat purchases, (3) run a win-back campaign for at-risk cohorts, (4) measure NPS by cohort.

## Real-world example

A supplements store: the Black Friday cohort's repeat rate was 8% the following month. Regular-purchase cohorts: 34% returned. Black Friday cut LTV by 60% — they changed their sales strategy.

## Where to start

Run cohort analysis quarterly. Question: 'What % of month X's customers bought again within 90 days?' Below 20% signals a retention problem. Above 40% is a healthy business.

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Category: Analytics · From the [Jimmy OS KPI Glossary](https://jimmy-os.com/glossary/kpi.md) · Source page: https://jimmy-os.com/glossary/kpi/cohort-analysis