actionable cohort analysis: how to use behavior-based cohorting to maximize engagement and retention
TRANSCRIPT
Know your users. Grow your app.
Actionable Cohort Analysis: How to use behavior-based cohorting to maximize engagement and retention.
Spenser Skates CEO and Cofounder, Amplitude Analytics
Let’s break down ‘analytics.’
Level 3: What drives growth
Level 2: Where are my problems
Level 1: Counters
Behavior-Based Cohorting Data Science
Companies at this level: Facebook, Amazon, Netflix, Zynga
Funnels Retention
Segmentation Events
DAU, MAU, Revenue
The Three Levels of Analytics
Level 3: What drives growth
Level 2: Where are my problems
Level 1: Counters
Behavior-Based Cohorting Data Science
Companies at this level: Facebook, Amazon, Netflix, Zynga
Funnels Retention
Segmentation Events
DAU, MAU, Revenue
The Three Levels of Analytics
Level 3: What drives growth
Level 2: Where are my problems
Level 1: Counters
Behavior-Based Cohorting Data Science
Companies at this level: Facebook, Amazon, Netflix, Zynga
Funnels Retention
Segmentation Events
DAU, MAU, Revenue
Most companies are here.
The Three Levels of Analytics
Completing 50% of Profile
Adding 7 Friends
What Drives Long Term Retention?
Posting on a wall
Optimized experience around adding and discovering friends.
Properties that have a review
Properties with Professional Photography
What Drives Revenue?
Properties with a personalized description
Shifted from a search based to a browse based experience to encourage aspirational travel
Level 3: What drives growth
Level 2: Where are my problems
Level 1: Counters
Behavior-Based Cohorting Data Science
Companies at this level: Facebook, Amazon, Netflix, Zynga
Funnels Retention
Segmentation Events
DAU, MAU, Revenue
Most companies are here.
The Three Levels of Analytics
Level 3: What drives growth
Level 2: Where are my problems
Level 1: Counters
Behavior-Based Cohorting Data Science
Companies at this level: Facebook, Amazon, Netflix, Zynga
Funnels Retention
Segmentation Events
DAU, MAU, Revenue
Most companies are here.
The Three Levels of Analytics
Level 3: What drives growth
Level 2: Where are my problems
Level 1: Counters
Behavior-Based Cohorting Data Science
Companies at this level: Facebook, Amazon, Netflix, Zynga
Funnels Retention
Segmentation Events
DAU, MAU, Revenue
Most companies are here.
The Three Levels of Analytics
What is a behavioral cohort?
What is a behavioral cohort?
In traditional analytics, a “cohort” has referred to an Acquisition Date Cohort:
A group of users who started in the same time period, and are then tracked together over time.
What is a behavioral cohort?
Acquisition Date Cohorts can tell you that users who joined in June are retaining better than users who joined in May…but it’s hard to take action on
that information.
What is a behavioral cohort?
Behavioral cohorting allows you to group your users based on specific actions that they have or have not taken in your app or website.
This helps you identify user actions or product features in your app that drive growth.
Compare retention between behavioral cohorts
Users who add 7 Friends in 10 Days. Users who do NOT add 7 friends in 10 days.
100%
80%
60%
40%
20%
0%
Day 14 Users who add 7 friends in 10 days: 36.1%
Day 0 Day 1 Day 3 Day 7 Day 14 Day 30
Product Decision: Optimize Facebook experience around adding and discovering friends
How to use behavioral cohorting to make product decisions
Come up with a hypothesis on what user actions lead to long term retention
Apply cohorts to retention reports
and search for insights
Test the hypothesis by creating cohorts based on specific
user actions
Step 1 Step 3 Step 2
Let’s walk through an example.
Step 1: Come up with a hypothesis
Example: Social music app Key user actions on the 1st day: • Joining a community • Completing user profile
Come up with a hypothesis on what user actions lead to long term retention
Step 2: Create cohorts to test your hypothesis
Cohort: Users who joined at least 1 community on the 1st day of use
Step 2: Create cohorts to test your hypothesis
Inverse Cohort: Users who did NOT join at least 1 community on the 1st day of use
Step 3: Apply cohorts to retention reports
Step 3: Apply cohorts to retention reports
Step 3: Apply cohorts to retention reports
Step 3: Apply cohorts to retention reports
Step 3: Apply cohorts to retention reports
Takeaway: Users who join at least 1 community on the 1st day of app use have significantly increased 7 and 14 day retention compared to users who do not join a community
Now we can repeat this process for our other candidate action: Completing the user profile on the 1st day
Cohort: Users who completed their profile on the 1st day of use
Takeaway: Users complete their profile on the 1st day of app use have significantly increased 7 and 14 day retention compared to users who do not complete their profile
Cohort: Users who completed their profile on the 1st day of use
Both joining a community and completing a profile on the first day correlate with improved retention.
Let’s compare the 2 pairs of cohorts on the same graph.
Now what?
Takeaway: Joining a community has a greater effect on retention than completing a profile.
Takeaway: Joining a community has a greater effect on retention than completing a profile. Product Decision: Encourage users to join a community during onboarding experience.
• Unlike traditional acquisition date cohorts, behavioral cohorts group users by specific actions they take in your product
• Behavioral cohorting allows you to discover the actions
that can maximize long-term retention, just like Facebook’s “7 friends in 10 days.”
• There are 3 steps to behavioral cohort analysis:
• Come up with a hypothesis of actions that promote retention • Create cohorts to test that hypothesis • Apply the cohorts to retention or engagement reports
Summing Up
