Data doesn’t lie but sometimes, it doesn’t tell the full story, either.
Breaking down and analyzing customer data based on cohort allows users to see trends that aren’t visible on the surface. Cohort analysis with Power BI is possible on even the simplest of data sets as all that is needed is a unique user or customer identifier and the date that the purchase, action, etc took place.
Using such a data set, cohort analysis can be easily visualized using most BI tools and is one of the most powerful ways to look at the strength of your company.
Simply put, a cohort is a group of people, such as users, customers, etc., with at least one common characteristic. In the context of business analytics, similar to a cluster, a cohort is a way of segmenting users into certain behavioral metrics.
Cohort groups are often based on:
Cohort analysis will allow you to compare these metrics over time to evaluate their performance.
With a few simple, built-in functions in Power BI, you can complete a cohort analysis that then transforms this customer data into compelling visuals that can be explored, analyzed and shared – both on-site and remotely – all in one view with scalability, built-in governance and security.
Using this customer analytics technique, you can answer such questions no matter what industry you are in such as, ‘Over time, how do customers who first bought from us in our opening month compare to customers who first bought from us a year later?’ or ‘Do longer-tenured customers bring in more sales than newly acquired customers?"
Cohort analysis is often visualized one of two ways: either in tabular form (often as a heat map) or as a line graph.
Unlike most tables which read left to right, a cohort chart should be read one column at a time, enabling you to identify possible disruptions in the user's life-cycle.
These disruptions can often be found as color gradients change in the same column, and the greater the difference between the gradients of color, the bigger difference between the two.
To demonstrate how cohort analysis with Power BI can be useful, take the example of a start-up that is seeing a steady increase of active users over time. Using the visual below, the start-up may think they are in great health.
But if we perform cohort analysis, a whole different picture is painted.
With this cohort analysis, the retention rate is decreasing for every new cohort, which means that although the company is seeing a steady increase in active users, the majority of these users are newly acquired.
The start-up may be able to get away with this in its nascent state but will likely soon have to focus its efforts on retaining current customers.
Some additional uses and benefits of cohort analyses with Power BI include …
The key to effective cohort analysis with Power BI ultimately lies in the collection of accurate information. Armed with it, businesses can better understand the habits and patterns of their users for revelatory customer analytics that can propel your organization to the next level.
Written by CCG, an organization in Tampa, Florida, that helps companies become more insights-driven, solve complex challenges and accelerate growth through industry-specific data and analytics solutions.
Editor’s Note: The post was originally published in [September, 2019] and has been updated for freshness, accuracy and comprehensiveness.
CCG understood our project needs very well, they are very responsive and we could not ask for anything more. The solution they provided fit perfectly with our expectations and business goals.GOP Data TrustChief Data Officer
I cannot overstate the delight we experienced from the outcome of our project. I would not only recommend CCG to any company, but question why they would engage with anyone but CCG.PgiDirector of Customer Success
Working with CCG is like working with extended team members. Consultants become an integral part of the work bringing expertise for cutting edge design and development.Hillsborough County Public SchoolsChief Information and Technology Officer
CCG's team is positive and eager. They are a great big bunch of wonderful people trying to make a difference.Hillsborough County Public SchoolsDepartment Manager
I knew CCG's technical expertise and dedication to quality results would be invaluable to our project success based on our past partnerships. We could not have implemented in the short timeframe like we did without their assistance. CCG is #1 on my speed dial for successful project implementation.InCommDirector, Financial Information Systems
It was evident from the onset of negotiations through the implementation that CCG took their role in the partnership to heart and we believe it has been instrumental in our success.Interval InternationalDirector of Marketing
CCG works very hard to understand and align with our needs. It truly feels as though we are on the same team!Fortune 500 HomebuilderBI Manager
CCG came to our company in a time of much change. Their team partnered with ours, continually delivering with professionalism and efficiency. We would not be where we are today without the expertise CCG brought to the project.PSCU Financial ServicesSenior Program Manager
CCG has a good industry knowledge, we are very happy that we chose to work with CCG. They have been a great help strategically and are helping us make important decisions.Minneapolis Public SchoolsHuman Capital Coordinator
Other Vendors use the word Partnership, but CCG actually means what they say. I can’t thank them enough for their professionalism and willingness to work with us as a true Partner, not just another vendor.PODSCIO
Our CCG Consultants are total rock stars: very thorough with a solid knowledge of the financial services industry. As a bonus, they are very easy to get along with – a great fit for our team.Raymond James Financial ServicesSenior Manager of Enterprise Data
CCG's team are all amazing. Thank you, CCG, for all that you do to make us great and keep our credit unions moving forward!PSCU Financial ServicesVP Enterprise Analytics & BI
Other Vendors use the word Partnership, but CCG actually means what they say. I can’t thank them enough for their professionalism and willingness to work with us as a true Partner, not just another vendor.PODSChief Information Officer
CCG's Team is very professional and responsive. They are making our job very easy.Rollins, Inc.Senior BI Analyst
CCG did an excellent job! Their team was very flexible. They gave us everything we asked for and then some.Rooms To GoSenior BI Architect
I'm amazed at the talent at CCG, not just the skillset - they're really good people. We've already referred them once and will do so again!Ruth's Chris Hospitality GroupCIO
CCG did a great job! We're extremely impressed with what was built in a short time. CCG has delivered ahead of time and with best practices, it's been a pleasure to work with them.VologyVP of Analytics
2502 N. Rocky Point Drive, #650, Tampa, FL 33607
Phone: 813.968.3238 | Fax: 813.200.1357
8000 Avalon Blvd. Suite #100, Alpharetta, GA
Phone: 404.328.7298 | Fax: 813.200.1357