Google's New Cohort Analysis
If you are already
heavily into online marketing analytics, this may rapidly become one of
your more valuable marketing analysis tools. If you are a newbie to
marketing analysis and are not yet familiar with Google's new tool, here is
some help in understanding what it is all about.
First of all, cohort analysis is not new. It is Google's tool that is new.
A dictionary definition of a cohort is simply a group or band of people.
That notion is at least as old as Ancient Rome, where a legion of soldiers
was broken down into ten cohorts. In its more current usage, cohort
analysis has been performed for many years. Insurance companies, for
example, have used this idea to create data for actuarial tables, mortality
rates, etc.
Simply put, cohort analysis is the breakdown of populations into smaller,
easily definable groups. The purpose of analyzing the characteristics of
these sub-categories is to determine common behaviors usually specified in
relation to a time period in the buying cycle or a specific date. The
patterns discerned can show a business how its customers relate to the
product in the early stages of experience with it, as opposed to how
customers relate to it later in the buying process.
Cohort analysis provides the ability to tailor marketing to these specific
sub-groups. There could be a cohort of customers at the time of checkout,
for example. Another cohort might describe the behaviors of customers who
responded to a specific advertising channel that was presented over a short
period of time. Common metrics that can be revealed include the date your
customers first clicked on your link. Others are when they bought from you
the first time, or the second, or third time.
If a cohort reveals, for example, the trends common to your higher-paying
customers, you can then tailor your next marketing channel to their
specific interests and needs, thus encouraging more higher-paying sales.
Google is still tweaking their cohort analysis tool, so more options for
its use are likely to appear in the near future. For the time being, you
can access the tool and use it to familiarize yourself with how it works.
Here is how to do that:
If you do not already have an analytics account, sign up for one at
Google.com/analytics. Once you have an account, sign in and click YOUR
VIEW. From there, select REPORTING, then AUDIENCE, then COHORT ANALYSIS.
From here, you can tailor your forthcoming report options.
At this stage of tool development, your choices include the acquisition
date, cohort size, and date range, for example.
• Acquisition date can refer to the first time your customer does whatever
it is you are exploring, such as first visit, first purchase, etc.
• Cohort size permits you to select day, week, month, quarter, or year, for
example, to find out how many users did something during that period.
• The metric refers to the data you see, such as the number of page views, purchases,
etc.
• The date range, obviously, is the period you are exploring. If your
cohort size was designated as a day, you get information for each day in
your selected date range.
Play around with Google's new tool for a while to get used to what it can
show you. As is the case with all good tools, practice with it now will
make using it easier when its functionality is increased as more options
are added.
Using the cohort analysis report is an option that can improve business
performance through better understanding of your customers and their
patterns of behavior. The more you know about your customers, the better
you can meet their needs and increase your bottom line.
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