How To Calculate Customer Cohort analysis in SAP Sales Cloud | Arithmix

Customer Cohort analysis is a powerful tool that can help businesses understand their customer behavior over time. By analyzing customer data, businesses can identify patterns and trends that can help them make informed decisions about their marketing and sales strategies. In this article, we will explore what customer cohort analysis is, when it is valuable to calculate it, and how to do it in SAP Sales Cloud.

What Is Customer Cohort analysis?

Customer Cohort analysis is a method of analyzing customer behavior over time. It involves grouping customers into cohorts based on a shared characteristic, such as the month they made their first purchase or the region they live in. By tracking these cohorts over time, businesses can identify patterns and trends in customer behavior, such as changes in purchase frequency or customer retention rates.

Customer Cohort analysis can provide businesses with valuable insights into their customer behavior. For example, it can help businesses identify which marketing campaigns are most effective at retaining customers, or which products are most likely to lead to repeat purchases. By understanding these patterns, businesses can make informed decisions about their marketing and sales strategies, and improve their overall customer experience.

When Is It Valuable To Calculate Customer Cohort analysis?

Customer Cohort analysis can be valuable for businesses in a variety of situations. For example, it can be useful for businesses that are looking to improve their customer retention rates, or for businesses that are trying to identify which marketing campaigns are most effective at driving repeat purchases. It can also be valuable for businesses that are looking to identify patterns in customer behavior, such as changes in purchase frequency or customer lifetime value.

Customer Cohort analysis can be particularly valuable for businesses that operate in industries with high customer churn rates, such as subscription-based services or e-commerce businesses. By understanding the factors that contribute to customer churn, businesses can take steps to reduce churn and improve customer retention rates.

How to Calculate Customer Cohort analysis in SAP Sales Cloud

To calculate Customer Cohort analysis in SAP Sales Cloud, businesses can follow these steps:

1. Identify the characteristic that you want to use to group customers into cohorts. This could be the month they made their first purchase, the region they live in, or any other characteristic that is relevant to your business.
2. Create a report in SAP Sales Cloud that groups customers based on this characteristic. For example, you could create a report that groups customers by the month they made their first purchase.
3. Track these cohorts over time by creating a series of reports that show how each cohort behaves over time. For example, you could create a report that shows how many customers from each cohort made a repeat purchase in each subsequent month.
4. Analyze the data to identify patterns and trends in customer behavior. For example, you might find that customers who made their first purchase in December are more likely to make a repeat purchase in January than customers who made their first purchase in November.
5. Use these insights to inform your marketing and sales strategies. For example, you might decide to run a targeted marketing campaign in January to encourage customers who made their first purchase in December to make a repeat purchase.

By following these steps, businesses can use SAP Sales Cloud to calculate Customer Cohort analysis and gain valuable insights into their customer behavior. With these insights, businesses can make informed decisions about their marketing and sales strategies, and improve their overall customer experience.

How Do You Calculate Customer Cohort analysis in SAP Sales Cloud

SAP Sales Cloud 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 SAP Sales Cloud 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 SAP Sales Cloud, 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 SAP Sales Cloud 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 SAP Sales Cloud 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.