The Angel VC
My colleague Nicolas wrote a great guide with guidelines on how to do cohort analyses which I’d like to share with the readers of this blog. Thanks, Nicolas, for allowing me to hear guest release it. Without further ado, it is here! At Point Nine we believe that the only path to get a real sense of user retention and customer lifetime is doing a proper cohort analysis.
Much has been said and written about them and Christoph has a published a great template and guide on this issue if the concept is not used to you. With this Q&A I want to focus on a few of the more practical questions that may arise when you are actually applying a cohort evaluation for your startup. After near to two years of dealing with SaaS companies and doing much of the analysis I have learned that in most cases there is absolutely no perfect step-by-step method. Now let’s enter it!
Q: Which users must I include in the bottom quantity of the cohort? You can find two parts to the answer as it depends upon what you would like to measure. If you want to find out your overall user retention and have a free plan, month then you should include all signals of a specific.
However if you want to compute your customer lifetime value, you should only go through the true amount of paid conversions. I only count an account as a paid one when the user has … Read the rest
