A cohort groups customers based on a common event that occurred during the same period. The most common way to group them is by the month of their first purchase: everyone who made their first purchase in March forms the March cohort.

Then you track each group month by month to see how many return, how much they spend, and when they stop buying. This way, you can compare similar groups with each other, rather than mixing new customers with long-time customers.

Why does it matter?

Overall averages hide what's really going on. If your store is growing quickly, the overall repurchase rate may drop simply because you're getting a lot of new customers, even if each group behaves the same as before.

Cohorts show you whether your current customers return more or less often than those from the past, which campaign or promotional date brought in customers who stayed, and at what point the relationship breaks down. With that information, you can decide where to focus your efforts: on the second purchase, on reactivation, or on the quality of customer acquisition.

Story mode

Lucia manages marketing for an online sports store. She looks at her cohorts and discovers something: customers who came in on Black Friday made a single purchase and hardly ever returned, while those who came in April—without any discounts—are still buying six months later.

With that information, the plan changes: for the next sales event, prepare a second-purchase funnel for new customers, rather than measuring success solely by sales for that day.

How to Use It with Data4Sales

Data4Sales consolidates purchases from your brick-and-mortar store, your e-commerce site, and your marketplaces into a 360° profile, so each customer has a single, actual first-purchase date. From there, you can:

• Track the lifecycle of each group (First-time buyer, Repeat buyer, Frequent buyer, At-risk, Inactive) using segments that are updated daily.
• Ask Orbis Copilot, using natural language, how one cohort performs compared to another.
• Activate cohort-based audiences on WhatsApp, email, or SMS to encourage repeat purchases or re-engage customers who have become inactive.

Related terms

• Retention Rate
• Second purchase
• Customer life cycle
• LTV