Similar to segmentation, Cohorts also divides customers into different groups based on shared characteristics. However, unlike segmentation, cohorts are built from dynamic attributes (number of purchases, total amount from purchases, etc.) and represent groups of individuals who share those characteristics for a certain period of time.
Example: One of the most common methods is to cohort users by the date or month they started using your product for the first time.
- Such cohorts help because your product or service keeps changing over time. Hence, a new user today will have a vastly different product compared to a user who started six months ago.
- The expectations and clickstream patterns of a year old user will be vastly different.
- Each cohort will have its own churn patterns.