Cohort analysis

Cohort analysis is available with Subscription Analytics.

Cohort analysis is a type of analytics that looks at the behavior or performance of groups of people (cohorts) who share a common characteristic or experience. For example, a cohort could be people born in the same time period or started schooling in a specific year.

In ChartMogul, a cohort is a group of customers who start their first subscription in the same interval (day, week, month, quarter or year). Cohort analysis allows you to better understand churn, retention and conversion rates based on when customers subscribe and identify points in your customer lifecycle that result in contraction and churn.

Here’s what we cover in this article:

How cohorts are useful
Reading a cohort table
Cohort analyses in ChartMogul
Configuring your analysis
Exporting your analysis
Understanding the data
Segmenting cohorts

Resources and further reading:

Before you begin

Read more about how ChartMogul organizes and classifies MRR movements.

How cohorts are useful

To grow a SaaS business, you need customers to continually renew their subscriptions. So it’s important to identify points in your customer lifecycle that result in downgrades (contraction) or cancellations (churn).

Screenshot of a customer churn cohort table with a list of cohorts and churn rates by month, relative to the previous month

Instead of looking at the overall churn rate for all customers, cohorts allow you to compare groups of customers based on when they subscribe so you can answer questions like:

Which month in the lifespan of a subscription is churn at its highest?
How did last month’s product release impact churn?
Are customers acquired on Black Friday more likely to churn than those acquired on regular days?
How is retention for customers who subscribed in February during our Valentine’s marketing campaign?
How is retention for customers who signed up using a discount?

Reading a cohort table

The results of a cohort analysis are visualized using a table that may be different from other charts and reports you're familiar with and can be a challenge to read and understand.

Screenshot of a cohort table with numbers for each element explained here

The cohort analysis you select — and how you configure it — determines the calculation of Cohort Value and the metric ChartMogul displays in table cells.

Columns

The first and second columns (1) display each cohort’s name (identified by the time of conversion, e.g., Feb 2023) and its value. The remaining columns (2) represent each interval of the cohort’s existence (day, week, month, quarter or year, depending on the cohort type).

Rows

Each row (3) is an individual cohort. Cohorts appear in chronological order. The last row (4) provides an average of the relevant metric across cohorts for each interval.

Cells

Cells (5) show the relevant metric depending on the cohort analysis you select (e.g., churn, expansion, contraction or reactivation) and how you configure it. Future intervals (6) are blank.

Colors

ChartMogul assigns a color to each metric to help you interpret the results of your analysis. Green indicates the metric with the best value (i.e., lowest churn or highest retention rate) and red the worst. The metric falling in the middle is yellow. The remaining metrics are colored using shades along a green-yellow-red gradient to indicate their value relative to the best (and worst) metrics in your current analysis.

Cohort analyses in ChartMogul

ChartMogul offers the following cohort analyses, which you access by navigating to Reports > Cohorts.

Churn

Customer Churn — the percentage or number of customers who have canceled all of their subscriptions, offset by reactivation.
Net MRR Churn — the percentage or amount (in your primary currency) of MRR lost due to cancellations, offset by expansion and reactivation.
Quantity Churn — the percentage or number of subscription downgrades or cancellations, offset by expansion and reactivation.

Retention

Customer Retention — the percentage or number of customers who have one or more active subscriptions, including reactivation. Learn more.
Net MRR Retention — the percentage or amount in your primary currency of MRR from active subscriptions, expansion and reactivation, minus churn and contraction. Learn more.
Quantity Retention — the percentage or number of subscriptions still active, including expansion, churn and contraction.

Conversion

Conversion of Non-Subscription Customers to Subscribers — the number or percentage of customers who previously made a non-recurring purchase and then purchased a subscription in the selected month. (Available on our Scale and Volume plans)

Configuring your analysis

Type

Use the Type drop-down to select an interval for your analysis:

Daily cohorts
Weekly cohorts
Monthly cohorts (default)
Quarterly cohorts
Annual cohorts

Screenshot of the Type drop-down with options as listed here.

Start

Select a time frame for your analysis using the Start date picker. Depending on your Type setting, select the starting day, week, month, quarter or year.

Screenshot of the Start date picker. Type has been set to Quarterly cohorts, so the Start drop-down lets you choose a starting quarter for your analysis.

Show

Use the Show drop-down to choose Rate (%) or, depending on the cohort analysis you select, Customers, MRR, Quantity or Conversion.

Screenshot of the Show drop-down with two options: Rate (percentage) and Customers.

Relative to

If you select Rate (%) from the Show drop-down, you can use the Relative to drop-down to choose Previous day/week/month/quarter/year or Starting day/week/month/quarter/year.

Screenshot of the Relative to drop-down. Type has been set to Annual cohorts, so the options are Previous year and Starting year.

With Previous day/week/month/quarter/year, ChartMogul calculates the metric as a rate relative to the previous interval. With Starting day/week/month/quarter/year, ChartMogul calculates it relative to Cohort Value.

Include current day/week/month/quarter/year

Select Include current day/week/month/quarter/year to get the most up-to-date insights by including data for the current interval in your analysis.

Screenshot of the cohort analysis header with the Include current day checkbox selected.

Understanding the data

Cohorts

A customer joins a cohort when they become a subscriber for the first time, i.e., when their status changes from one of the lead statuses (New Lead, Working Lead, Qualified Lead or Unqualified Lead) to Active Subscriber. Each customer remains in their original cohort regardless of whether they sign up for or purchase a second subscription (expansion) or cancel (churn) and re-subscribe (reactivation).

Intervals

Follow the development of each cohort by interval (day, week, month, quarter or year), starting with interval 0 (when the customers subscribed) and continuing for each interval of the cohort’s existence.

Let’s take a monthly cohort analysis as an example. For a customer who subscribed on April 19, month 0 is April 19–April 30, month 1 is May 1–May 31, month 2 is June 1–June 30 and so on.

While the actual dates for a specific month (e.g., month 3) are different between cohorts, what makes them valuable from an analysis perspective is their distance (in months) to sign up. Knowing, for example, that churn peaks in month 3 is an important insight.

Cohort Value

Depending on the cohort analysis you select, Cohort Value represents one day, week, month, quarter or year of:

Total MRR (in your primary currency)
Number of customers
Number of subscriptions acquired

In the following example, the total MRR for subscriptions sold in December 2023 was $9,850.

Screenshot of a cohort table showing the percentage of MRR churn relative to the previous month with the Cohort Value column highlighted

Metrics

Depending on the cohort analysis you select, ChartMogul displays one of the following metrics in table cells:

Conversion — the number of non-subscription customers who started a subscription
Customers — the number of active customers after churn, expansion and reactivation
MRR — the amount of MRR after churn, expansion and reactivation
Quantity — the number of active subscriptions after churn, expansion and reactivation
Rate (%) — the percentage in change, either relative to the previous month or the starting month

In our example, 9.52% of customers in the October 2023 cohort churned in month 2.

Screenshot of a cohort analysis of the percentage of customers churned relative to the previous month, with the cell for month two of the October 2023 cohort showing 9.52%.

Select the cell to see a complete list of churn activities.

Screenshot of the Activity table containing a list of MRR movements, each with a description, value, type, and date

Average

The Average row provides an average of Cohort Value and each month of the analysis. ChartMogul accounts for cohort size (i.e., the number of customers) when calculating these averages.

For example, in a given month, a cohort of two customers experiences 50% churn while a cohort of 100 experiences 25%. The average churn rate (across the two cohorts, weighted by the number of customers) is 25.49% (total number of customers lost / total number of customers) and not 37.5% (the average of the two percentages).

Learn more about weighted averages.

Exporting your analysis

Export your cohort analysis by selecting Export (CSV) above the cohort table.

Screenshot of a cohort analysis table with the Export (CSV) button highlighted.

Segmenting cohorts

Using segmentation as part of your cohort analysis in ChartMogul helps you answer even more complex questions like:

When does a particular pricing plan experience its highest churn?
Which sales representative has the highest retention rate?
How does NPS score correlate with churn rate?

Screenshot showing the placement of the Add Segment and Add Filter buttons above a cohort table.