Cohort Analysis | Online Help - Zoho CRM

Cohort Analysis

Some of the options mentioned in this document are being released in a phased manner and may only be available to specific users.

What is cohort analysis?

Cohorts are groups of users, customers, or data that share similar characteristics at any given point of time. Cohort analysis can be helpful for understanding customer behavior across the sales life cycle or their buying trends and patterns, for analyzing support costs over a specific time period, or other similar metrics. Results drawn from the analysis can be used to adjust existing services or products offered to the identified cohorts and observing the resultant impact on the overall health of the business.

Types of cohort analysis

Time-based cohort analysis

Time-based cohorts are helpful for understanding a pattern or change that happens weekly, monthly, yearly, or quarterly. For example:

  • Studying month-wise deal closure pattern: You can run a cohort analysis to see the deal closure pattern for the past few months. The total number of deals that were closed in the first, second, third, and fourth month from the month they were created in will help you understand how the deal closure pattern varies by month. The cohort below shows that the deals created in February and March were most likely to be closed the first and second months from deal creation and that there was a considerable drop in closure rates after the second month from deal creation.
  • Day-wise product purchase frequency: In retail businesses, it is useful to see how often a particular product is purchased by customers. You can run a cohort analysis for the product category with a timeline from sale start to sale end date (purchase end date) and see how many times a product was bought from the first to fifth day of a sale period. The data below shows a considerable increase in the purchase on the third day. The data also indicates that customers made more purchases in the electronics category than the other categories.

Segment-based cohort analysis

Customers can be segmented based on various parameters such as the type of product purchased or the subscription type or type of service they chose. From a sales perspective, you can group your leads based on their source of origin, geographic location, or occupation. Some organizations find it useful to group their customers based on business size such as startup, medium-sized, or enterprise-level and industry type to analyze their buying frequency and product preferences. 

Analysis of a segment helps you develop deeper insights about a group's interest, purchasing patterns, and behavior, allowing you to pitch a more personalized marketing campaign. It also lets you draw specific inferences that can be used to optimize existing processes for better results.

Buying pattern after sale: For example, you analyzed the buying pattern six months after an "end of season" sale and noticed that most of the customers who purchased during that time continued to make purchases from you every consecutive month. You now consider them as loyal buyers and focus more on retaining and engaging them by sending personalized campaigns like early bird offers, exclusive discounts, and coupons.

Business size-wise purchase pattern: Let's look at another example where the marketing strategies can be tweaked based on product's purchase frequency. A cohort analysis of different business sizes versus their purchase frequency can help you understand if a certain product interests a certain type of business or not and then market the products based on the audience's interest and requirements. 

This analysis shows that a particular product has not been purchased much by small-sized businesses, B2B, and other organizations, but there has been a consistent increase in the purchase rate in medium and enterprise level organizations. So you can conclude that the latter group is more interested in the product than the former cohort group. Instead of targeting all the organizations, you can target your marketing efforts towards the two groups that have shown most interest. You may also want to review how you have been marketing to the group with the lowest purchase rates to see if you can identify any issues with the product or service offered or find ways to market them better to this group.

Configuring cohorts

In Zoho CRM, you can create three types of cohorts:
  • Basic: A basic cohort lets you analyze by date. For example, you can choose the date a record was created or modified, the date of last activity or any other custom date/time field. 
  • Standard: A standard cohort lets you run an analysis using dimensions or pick-list fields. You can use standard or custom picklist fields such as industry type, product category, lead source, lead status, and record owner.

  • Advanced: This is a combination of basic and standard cohorts. You can analyze using either dates or dimensions as the parameter and add additional metrics such as the total annual revenue, total number of leads, number of purchases, or average unit price. Any number field can be used for additional metrics.

To configure cohort analysis

  1. Click Add Component in the Analytics tab and select Cohort.

  2. Select your desired cohort type: basic, standard, or advanced.
  3. Enter the following details in the Cohort Builder page
    • Component Name: Enter the component name, such as "purchase frequency after end-of-season sale" or "sales cohort for lead sources".
    • Cohort Analysis For: Select a module and grouping from the dropdown list. Note: You can group by either date or dimension.
    • Cohort Data: Select the number fields you want to run the cohort for, e.g., record count, total purchases, product count versus the number of records.
    • Criteria Filter: Specify a criteria if you only want specific records to be considered for analysis.
    • Duration from: Select the duration of your analysis, e.g.,sales start to end date, purchase start to end date, created time to modified time. Note: Only date and date/time fields will be listed here.

    • Duration interval: Choose Day, Week, Month, Quarter, or Year.

    • Duration Range: Select the range you want for the results, e.g. 1-4 or 1-6. The maximum duration range is 1-10.

    • Additional Metric: Click Add Metrics to add more values from any number field to the cohort. You can also define criteria to consider specific records only. Click Done to save the additional metrics.
    • If you want large numbers to be displayed in a shortened format, enable Display as shortened numbers. Set the format, select the decimal places, and choose the measures that need to be displayed in this manner.

  4. Click Add & Reorder to change the configuration.
  5. Click Save.
  1. When you enable Display as shortened numbers, you can choose the format (for example, display thousands as K) and decimal places. If you've chosen the format as Millions (M) and decimal places as 2, the number 135,532,000 will be displayed as 135.53 M.
  2. Supported formats are:
    Thousands (K)
    Millions (M)
    Billions (B)
    Lakhs (L)
    Crores (C)
  3. Number of decimal places supported are: 0, 1, 2, and 3.

Zia Suggestions for Cohort Components 

Zia suggestions will only be available for organizations in enterprise edition and above with 20+ licenses.
Zia can provide you with advanced recommendations for designing the different elements of your analytical dashboard, which are generated by analyzing the reports and charts created by the users. Zia will thoroughly examine your data and propose the most suitable suggestions for the cohort component that aligns with your organization's needs and business procedures.
While adding the Cohort component to your dashboard, Zia will display its recommendations if they are available. The initial time the suggestions are available, they will appear as an insight message. Clicking Try Now will enable you to review the suggestions.
After selecting a suggestion, the configuration will become available in the pop-up window. If necessary, you may edit the configuration, or you can click on the Suggestions button located in the top-right corner to explore additional recommendations.

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