How To Calculate Customer Cohort analysis in Sage CRE | Arithmix

Customer Cohort analysis is a powerful tool that can help businesses understand the behavior of their customers over time. By grouping customers based on shared characteristics, such as the month they first made a purchase or their geographic location, businesses can identify trends and patterns that can inform marketing and sales strategies. In this article, we will explore what Customer Cohort analysis is, when it is valuable to calculate, and how to do it using Sage CRE.

What Is Customer Cohort analysis?

Customer Cohort analysis is a method of grouping customers based on shared characteristics and analyzing their behavior over time. The goal is to identify patterns and trends that can inform marketing and sales strategies. Cohorts can be based on a variety of factors, such as the month a customer first made a purchase, their geographic location, or their age. By analyzing the behavior of each cohort over time, businesses can gain insights into how to better serve their customers and increase revenue.

For example, a business might create a cohort of customers who made their first purchase in January and compare their behavior to a cohort of customers who made their first purchase in February. By analyzing the behavior of each cohort over time, the business might discover that customers who made their first purchase in January are more likely to make repeat purchases than customers who made their first purchase in February. Armed with this information, the business could create targeted marketing campaigns aimed at encouraging repeat purchases from customers who made their first purchase in February.

When Is It Valuable To Calculate Customer Cohort analysis?

Customer Cohort analysis can be valuable for businesses of all sizes and in all industries. It is particularly useful for businesses that rely on repeat customers, such as subscription-based services or e-commerce businesses. By understanding the behavior of different cohorts of customers, businesses can create targeted marketing campaigns and promotions that are more likely to resonate with their customers.

For example, a subscription-based service might create a cohort of customers who signed up in January and compare their behavior to a cohort of customers who signed up in February. By analyzing the behavior of each cohort over time, the service might discover that customers who signed up in January are more likely to renew their subscription than customers who signed up in February. Armed with this information, the service could create targeted promotions aimed at encouraging customers who signed up in February to renew their subscription.

How to Calculate Customer Cohort analysis in Sage CRE

Sage CRE is a powerful tool that can help businesses calculate Customer Cohort analysis. Here are the steps to follow:

1. Identify the cohort you want to analyze. This could be based on a variety of factors, such as the month a customer first made a purchase or their geographic location.
2. Create a list of all customers who belong to that cohort.
3. Track the behavior of each customer in the cohort over time. This could include metrics such as purchase frequency, average order value, and customer lifetime value.
4. Analyze the behavior of the cohort over time. Look for trends and patterns that can inform marketing and sales strategies.
5. Create targeted marketing campaigns and promotions based on the insights gained from the analysis.

By following these steps, businesses can gain valuable insights into the behavior of their customers over time and create targeted marketing campaigns and promotions that are more likely to resonate with their customers.

How Do You Calculate Customer Cohort analysis in Sage CRE

Sage CRE 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 Sage CRE 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 Sage CRE, 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 Sage CRE 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 Sage CRE 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.