One method of analysis that is effective in formulating business strategies is a method called “cohort analysis.” Cohort analysis allows you to understand user trends and sales trends, allowing you to implement more effective promotional measures.
In this article, we will explain how to use “cohort analysis” in marketing.
What is a cohort?
For those who have never heard of the word “cohort” or are not familiar with it, we will explain the basic knowledge of cohort analysis in an easy-to-understand manner.
Cohort is a word originally used to describe a unit of infantry in ancient Rome. At that time, infantry units were made up of groups of several hundred soldiers, and the word “cohort” was used to describe them.
This changed and the method of extracting a group (cohort) that met certain conditions and analyzing their behavior came to be called cohort analysis.
People behave differently depending on the year they were born and their age. The differences in behavior are thought to be due to the following factors:
Factors due to changes in the times…Era effect Factors due to changes in age…Age effect Factors due to the year you were born…Cohort effect
For example, in 2020, sales of masks increased and all stores were out of stock, but this can definitely be said to be a “time effect” due to the coronavirus pandemic.
Furthermore, according to the Cabinet Office’s consumption trend survey, the penetration rate of passenger cars is nearly 80% for people aged 30 to 59, but it is in the 60% range for people aged 60 and over. This is thought to be due to the “age effect” in which many people surrender their licenses and give up their cars as they get older.
In addition, the passenger car penetration rate for people under the age of 29 is the lowest at 57%. It is thought that the “age effect” is at work, such as students who do not need a car, but the generation that values have changed and does not feel status in cars, and the generation that considers “cars = waste of money” have become adults. It is thought that a “cohort effect” may also be at work.
In this way, by classifying consumers and considering factors from the perspective of cohort analysis, it is possible to grasp consumption trends.
How to apply cohort analysis to developing marketing strategies
Cohort analysis is also very effective in developing marketing strategies. You can further increase profits by running advertisements and changing appeals according to the trends of the cohort.
The effects are particularly visible in fields such as e-commerce sites and web marketing. Using access analysis tools, you can find out the date and time of visits, number of visits, and attributes such as age and gender of people who visited your site or purchased products.
For example, if you have a product that is often purchased during the day, advertising during the day could increase sales. If you have a product that will be returned to you after a month, you may be able to get repeat customers by advertising to customers who have been purchasing the product for a month.
The higher the user retention rate, the higher the level of satisfaction with the product or service, so you can consider a strategy to increase sales by increasing new fans on SNS etc.
Additionally, as mentioned above, it is also possible to carry out marketing measures that are responsive to changes in the times and age, as well as to the generation of users.
Especially in the BtoB industry, it may be a good idea to consider the era effect. “Efficiency” is required due to work style reform and remote work during the coronavirus pandemic. For example, one of the fields that is currently growing is a system called “electronic contract”. Unlike traditional paper contracts, there is no need to affix a seal, so there is no need to go to the office to have a stamp affixed. You can also reduce the hassle of managing and searching for documents.
In addition, products and services related to remote work, such as online meeting platforms and employee attendance management systems, are becoming increasingly popular.
Consider product development and appeal content based on the analysis results
Of course, these services have been around for a while, but with the changing times of the new coronavirus outbreak, they suddenly became the focus of attention.
In this way, it is possible to create hit products by developing products and services that match the trends of the times and appealing to users about their benefits.
For websites and e-commerce sites, you can easily do this using an access analysis tool called Google Analytics. User movements can be visualized and analyzed in an easy-to-understand manner, so please take advantage of it.
summary
◆Cohort is a word used to describe the unit of infantry in ancient Rome.
◆The method of analyzing the behavioral trends of a group is called cohort analysis.
◆By grouping customers and understanding their trends, you can create effective marketing strategies.
◆Especially effective for attracting customers on EC sites and websites. There are tools available for cohort analysis.