Database services have been able to normalize, organize, and coordinate your customer data to give you a three-dimensional view of your leads for a few years now. Recently, marketing database consultants have developed a new and even more sophisticated way of seeing your audience through grouping them into cohorts.
Cohort reporting tracks a group’s behavior over regular intervals using real-time analytics. You’ve seen cohort reporting in action in other fields; it’s a staple in biological, psychological, and sociological research, for example. Only with big data capabilities have marketers been able to take full advantage of cohort grouping.
What Defines a Cohort?
In marketing terms, a cohort is somewhat like a segment based on specific, often time-sensitive criteria. While a market segment looks at a defining demographic or firmographic characteristic to create a grouping, cohort reporting looks at a defining event, such as a grand opening sale or a particular time of entry into the sales funnel, and analyzes the group over time.
Cohorts intersect with market segments too, giving you a nuanced view of leads based on both time and other factors you select. For example, a HVAC company might learn a lot from correlating traffic at the beginning of summer within a particular ZIP code to target that cohort with more specific and relevant marketing.
What Cohorts Can Teach You
In 1964, a landmark documentary from Michael Apted looked at a group of seven-year-olds from different walks of life. The documentary series revisited the cohort every seven years, most recently to film them at age 56. By interviewing the original “ Seven Up” group members throughout their lifetimes so far, psychologists have learned a wealth of information not just about the participants, but about the world in which they’ve grown up.
Marketers can learn from this lengthy study too. Looking at groups over time and revisiting them periodically will teach you about the seasonality of your sales, the effects of marketplace changes, and the long-term impact of events in your organization’s history.
Other Lessons from Cohort Reporting
The granular level of detail cohort reporting can produce would be overwhelming for conventional marketing software. Not until the advent of MARKETING AI® has real-time analysis been accessible to most businesses. Here’s where you can apply it to make the most impact:
- Active users and churn rate over time – With cohort reporting, you get a far more complete picture of what affects churn and how to reduce it. A truer picture of your retention rate leads directly to improving it.
- Engagement – Monitoring engagement has historically been an indirect science, but cohort reporting in real time gives a much more direct impression of how leads are responding to marketing activities.
- Comparison with benchmarks – By studying cohorts over time, you gain an understanding of historical norms so you can mark measurable gains and quantify challenges.
- Meaningful mobile data – In a realm of instant communication and split-second decision-making, having feedback in real time is essential.
Cohort reporting is relatively new even for marketing automation applications, but it rewards those who are willing to explore it.
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