Strategy

Cohort

A group of customers who first purchased in the same window (e.g., "January buyers"). Tracking cohorts over time reveals how retention is actually trending.

A cohort is a group of customers defined by when they first purchased — the January cohort, the Q4-2024 cohort, the BFCM cohort. Cohort analysis tracks those groups over time to show actual retention and LTV curves instead of blended averages.

Why it matters: a store looking only at "average LTV" can't tell whether retention is improving or decaying, because the average includes new customers who haven't had time to repeat yet. Looking at the January cohort 90 days in and comparing to the October cohort 90 days in reveals whether your retention is actually trending up or down.

Shopify's built-in cohort analysis is adequate; Klaviyo's is better; Triple Whale's and Lifetimely's are dedicated tools for this specific question.

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