Cohort Retention Analysis
Cohort analysis groups customers by when they first bought and tracks how many return over time — revealing whether your retention is improving, stable, or deteriorating.
What is a cohort?
A cohort is a group of customers who share a common characteristic at a specific point in time. In AskBiz, the default cohort is the acquisition cohort — customers grouped by the month (or quarter) they made their first purchase. For example, the January 2024 cohort is all customers who bought from you for the first time in January 2024. Tracking what percentage of this cohort returned to buy in February, March, April, and so on reveals your true retention rate — not a blended average across all customers, but the actual behaviour of real customer groups over time.
Reading a cohort retention table
The cohort retention table in AskBiz shows cohorts as rows (Jan 2024, Feb 2024, etc.) and time periods as columns (Month 1, Month 2, Month 3...). Each cell shows the percentage of that cohort who purchased in that month. The first column (Month 0) is always 100% — every customer purchased in their first month. Month 1 shows how many came back in their second month. A healthy retention curve falls steeply in Month 1, then flattens — once customers pass the initial drop-off, a stable percentage becomes long-term buyers.
What good retention looks like
Retention benchmarks vary significantly by business type. For fashion and lifestyle eCommerce: 20–30% Month 1 retention is typical; anything above 35% is strong. For consumables (beauty, food, supplements): 40–60% Month 1 retention is achievable with a good post-purchase experience. For subscription businesses: you are targeting 90%+ monthly retention (i.e. sub-10% monthly churn). Look for two things in your cohort table: the absolute level (is retention high or low vs benchmark?) and the trend (are newer cohorts retaining better or worse than older ones?).
Using cohort analysis to improve retention
Identify your best-retaining cohorts and investigate what was different: did you run a specific post-purchase campaign that month? Did those customers come from a specific channel? Did you launch a new product that became a repurchase driver? Conversely, identify your worst-retaining cohorts and look for common factors: a product quality issue, a poor fulfilment experience, or a shift in acquisition channel that brought in lower-quality customers. These insights point directly to the retention interventions most worth investing in.