How To Calculate Customer Cohort analysis in ProfitBooks | Arithmix

Customer Cohort analysis is a powerful tool that can help businesses gain insights into customer behavior and preferences. By analyzing groups of customers who share similar characteristics, businesses can identify trends and patterns that can inform marketing and sales strategies, product development, and customer retention efforts. In this article, we'll explore what customer cohort analysis is, when it's valuable to calculate it, and how to do it using ProfitBooks.

What Is Customer Cohort analysis?

Customer Cohort analysis is a method of grouping customers based on shared characteristics, such as the date they made their first purchase, their geographic location, or the product or service they purchased. By analyzing these groups over time, businesses can gain insights into customer behavior and preferences, such as how long customers typically remain loyal, how frequently they make purchases, and which products or services are most popular among different groups of customers.

One of the key benefits of customer cohort analysis is that it allows businesses to identify trends and patterns that might not be immediately apparent when looking at overall customer data. For example, a business might notice that customers who made their first purchase in the summer are more likely to make repeat purchases than customers who made their first purchase in the winter. This insight could inform marketing and sales strategies, such as offering summer promotions to encourage repeat purchases.

When Is It Valuable To Calculate Customer Cohort analysis?

Customer Cohort analysis can be valuable for businesses of all sizes and industries. It's particularly useful for businesses that have a large customer base and want to gain insights into customer behavior and preferences over time. Some specific scenarios where customer cohort analysis might be valuable include:

• Identifying which products or services are most popular among different groups of customers
• Understanding how long customers typically remain loyal and when they're most likely to churn
• Identifying which marketing and sales strategies are most effective for different groups of customers
• Informing product development by identifying which features or attributes are most important to different groups of customers

How to Calculate Customer Cohort analysis in ProfitBooks

ProfitBooks is a cloud-based accounting and invoicing software that includes a customer cohort analysis feature. Here's how to use it:

1. Log in to your ProfitBooks account and navigate to the "Reports" section
2. Select "Customer Cohort" from the list of report options
3. Choose the date range and grouping criteria for your analysis (e.g. first purchase date, geographic location, product or service purchased)
4. View the results of your analysis, which will show you how different groups of customers have behaved over time
5. Use these insights to inform your marketing and sales strategies, product development, and customer retention efforts

Overall, customer cohort analysis is a valuable tool for businesses that want to gain insights into customer behavior and preferences over time. By analyzing groups of customers who share similar characteristics, businesses can identify trends and patterns that can inform marketing and sales strategies, product development, and customer retention efforts. With ProfitBooks, calculating customer cohort analysis is easy and accessible for businesses of all sizes and industries.

How Do You Calculate Customer Cohort analysis in ProfitBooks

ProfitBooks itself isn’t naturally geared towards letting you calculate complex metrics like Customer Cohort analysis. As an alternative, teams typically use products like Arithmix to import data from ProfitBooks and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like ProfitBooks, combine it with data from other systems, and create calculations like Customer Cohort analysis.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Customer Cohort analysis in Arithmix

Calculating metrics like Customer Cohort analysis is simple in Arithmix. Once you've created your free account, you’ll be able to import your ProfitBooks data, and use it to create natural language formulas for metrics like Customer Cohort analysis.

Arithmix is designed to give you the power to build any calculations you want on top of your ProfitBooks data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.