Cohort analysis in marketing

Modern business is impossible without Internet use. No matter you sell something or produce. Consumers need information, and the easiest way of receiving it – web search. In addition, the effectiveness of different communication channels is not always amenable to study, but for the Internet it's pretty easy to do. One of the most popular and obvious methods accepted cohort analysis. Like other methodologies of the study of causal relationships in the behavior of consumers, it requires the accumulation of statistical information. The Internet allows you to do is “quietly” for the performer. Indeed, here recorded in almost every action of the visitor – from the date of the first visit to the amount of time spent on each page.

Statistics in the service of marketers

It is Unlikely that today there are still those experts that the word “marketing” is interpreted as “is” and “sale”. Of course, these are two important components of marketing activities. But the basis still lies in the study of demand and consumer behavior. And then all transformered to find ways to meet those needs.

Speaking about the study and analysis, means – statistics to help us. Thorough accumulation of a database of features allows buyers to thoroughly examine the demand and use the analysis results to maximize benefits for themselves.

Most often, marketers use correlation and regression analysis; they are interested in descriptive and predictive methodologies to study consumers. All this requires the allocation of some of the most revealing signs (or business) customer groups. It is this Association offers us cohort analysis.

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Statistical analysis and Commerce

In sales, you must quite clearly understand the causality of the actions of the customers. Cohort analysis this allows you to do grouping of consumers according to various criteria. Often a segment with a common characteristic (store visit, purchase, etc.) United by the date of events occurring. In statistics it is accepted to speak about a group of people (subjects), showing similar behavior and characteristics. A simple example of cohort & ndash; visitors, who visited the store a week before the New year. After studying their behavior, it is possible to draw conclusions about the effectiveness of promotional and commercial efforts.

Analytics

Marketers have come the Google. They offer a variety of services for studying statistics of e-Commerce. It is now possible to conduct a cohort analysis in Google Analytics. Previously, it had to be done by forced segmentation. It was quite time-consuming and inconvenient. Now, however, cohort analysis is carried out automatically. Analytics remains only to configure the parameters of the report according to their requirements.

The report Data is displayed in the form of a timeline and table. In the settings you can change four groups of parameters, which uses a cohort analysis.

The Type of cohort is a common characteristic that unites a specific group of site visitors. The size can be grouped by time: the exact day, week, month. If you select “week”, for example, the report will group first of all visited the website for a given week in one cohort.

Next you can change the “record”. The variability here as regards browsing, session duration, number of users, etc. And last option is – “date range". With this feature, the analyst appears to track the cohort over the time period from the set the initial point to the current date. When choosing a grouping by days, it should be remembered that cohort will be formed in rows, and the dynamics of visitor behavior – in columns.

How to use the results of the analysis

After Studying the reports, it is possible to trace the frequency of returns by consumers to the site. A comparison of the quantitative indicators with a layout of content on pages of a site will provide an opportunity to understand what interests and attracts customers.

For Example, according to the analysis of distinguished group of visitors, which returns with “consistently”. Raising the plan of placing of advertising materials on the holding of any shares or view new items in stock at the time of the first visits to these customers to your pages, it is possible to draw conclusions about what has attracted the attention of potential customers. This information allows to improve the efficiency of the company. So cohort analysis is used in marketing. It gives the opportunity to purposefully and efficiently allocate advertising budget and create effective channels of communication.

Note

For the effective use of any statistical tools necessary to conduct preparatory work. After correctly setthe question in the problem ensures a rapid solution.

What you need to do to use cohort analysis? Ask yourself a few questions:

• Why there is such dynamics of sales?
• How to choose the time period (for the advertising campaign, for example)?
• How to determine the time of mailing to get a response?

The hypothesis will help to more clearly define the parameters of cohort analysis.

Conclusion

After Reviewing the capabilities of the underlying cohort analysis in Google Analytics and get an idea of its functional features, a marketer is quite capable not only to increase traffic to your website, but and turn a potential client (a random user) per user.

The formation of the individual reports will give a clear picture about the nature of the target audience, will help you understand her reaction to your activity, regardless of whether you online news article or promotional offer. Any marketing efforts must be economically justified. Cohort analysis, CLTV, Unit Economics – any methodology of the study of consumer behaviour aims to identify the ratio of ‘cost-profit” and optimization.

But it is not to overreact. Daily monitoring will give the wrong idea about the motives of consumers visiting the company website. It is the prolonged observation of the same cohort will allow to track and correctly interpret changes in customer behavior.