Actionable Cohort Analysis: How to use behavior-based cohorting to maximize engagement and retention

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 1: Counters



Funnels Retention

Segmentation Events

DAU, MAU, Revenue




Level 1: Counters



Funnels Retention

Segmentation Events

DAU, MAU, Revenue

Most companies are here.


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 1: Counters



Funnels Retention

Segmentation Events

DAU, MAU, Revenue





Level 1: Counters



Funnels Retention

Segmentation Events

DAU, MAU, Revenue





Level 1: Counters



Funnels Retention

Segmentation Events

DAU, MAU, Revenue



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.


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.


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





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

Spenser Skates

[email protected] https://amplitude.com

Questions?

Actionable Cohort Analysis: How to use behavior-based cohorting to maximize engagement and retention

Data & Analytics