How To Read Customer Cohort Analysis Report In Shopify

Hey it’s Max from The Inbox Newsletter.

Today, I’m talking about the best Shopify report you can pull…

And many brands/agencies have never actually looked at this.

It's called Customer Cohort Analysis.

As a brand owner or retention marketer, this is the #1 most important report that you should be able to read and understand.

All you do is go to Shopify → Reports → Search "Customer Cohort Analysis"

How To Read A Cohort Report

On the left side, you see different months of the year, and then in the next column you see customers. What that shows is how many new customers bought for the first time in that given month.

And then you have month 0, month 1, month 2, etc.

Those are showing the different months since the person bought. For example, November 2021’s Month 2 would be January 2022.

And then you have those percentages, which essentially tell you what percent of those customers who bought initially in that prior month came back and made another order.

If you look at February of 2022 in the above example, you can see 13% of people who bought in February bought again in month one, which would be March.

You can track ALL sorts of things here…

Here’s a practical example…

Customer Cohort Use Case

For this brand, I switched the view to track LTV and filtered by first order type…

One-time buyers versus subscribers.

My goal was to see how much more valuable people who first placed an order on subscription are compared to people whose first orders were one time orders.

By month 6, one-time first orders average was ~$105 LTV…

By month 6, subscription first orders was $170 LTV…

That's a 62% difference per customer. The only difference is what they bought first.

This tells you exactly whether you should be pushing subscriptions harder on first-time buyers. For this client, the answer is obvious.

That one stat gives us the green light to restructure our entire funnel to be around subscription-first messaging, all because the data says that customer is worth almost double.

If you've never opened this dashboard, go do it right now. Takes 30 seconds and might change how you think about your entire funnel as well.

You can even split by product to see which SKUs create the most valuable customers over time.

Just a simple tip for ya!

If you want a team looking into this for you and managing your email/sms channels as well, book a call with us here.

Email Inspiration Of The Day

Brand:
Hope & Plum

Email Design:
https://drive.google.com/file/d/1_gaw8mnqbKp9Tldg5AUfKcjJvp37wuCe/view?usp=sharing

Notes:
Love the creative AirDrop notification as the hero image for a new product drop. It's eye-catching, on-brand for their audience (moms on iPhones), and makes you want to "Accept" to see what's new. Simple but clever way to announce a product without the typical "NEW ARRIVAL" banner.

Reply to this email if you have any questions or further content you want covered.

Cheers,

Max Sturtevant

P.S
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