What is cohort analysis?

Cohort analysis is a way of understanding customer behavior by grouping
users based on when they started using your product or service. These
groups, or “cohorts,” are then tracked over time to see how they perform.

Why use cohort analysis in ScaleXP?

ScaleXP makes cohort analysis not only powerful but incredibly easy. It’s
fully automated from your invoices, so there’s no manual data prep. Even
better, it’s the most flexible cohort tool on the market, built on the data
already in your system.
With just a few clicks, you can view multiple versions of cohort charts using
any data from the Customers tab. Want to filter by a single general ledger
code? Combine multiple revenue streams? Add tracking codes or include
renewals that haven’t yet been invoiced? No problem.
To get started, just define the data you want in the Customers tab—then
move on to building your cohort chart. It’s fast, flexible, and designed to give
you deep insight with minimal effort.

Why it matters

Instead of looking at all customers as one big group, cohort analysis lets you
compare how different groups behave—like whether customers who joined
in January stay longer or spend more than those who joined in March.
This helps answer key questions like:
– Are we getting better at retaining customers?
– Do newer customers generate more revenue than older ones?
– Is a pricing change having a long-term impact?

Example:

Imagine 100 customers signed up in January. If only 60 of them are still
active in March, you know that cohort has a 60% retention rate by Month 2.
You can then compare this with other months to see trends and make
informed decisions.

Common metrics in cohort analysis:

• Retention rate – how many users stay over time
• Lifetime value (LTV) – how much revenue each cohort generates
• Net revenue retention (NRR) – how revenue grows or shrinks after churn
  and upsells
• Average revenue per customer (ARPC) – revenue divided by the number of
  active users

Related articles

Cohort analysis: How to add a cohort chart in ScaleXP 
Step-by-step instructions on how to create a new cohort chart from your
dashboard. Learn the four types of cohort analysis available in ScaleXP—Retention, Lifetime
Value, Net Revenue Retention, and Average Revenue per Customer—with use
cases and calculation examples.

Common issues in cohort analysis: How to correct & fix errors in cohort analysis 
Troubleshoot common issues that can affect your cohort results, like
missing revenue or inconsistent customer IDs.