Dynamics Cohort Analysis - Locus IT Services

Dynamics Cohort Analysis

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Dynamics Cohort Analysis

What is Dynamics Cohort Analysis?

Dynamics Cohort analysis is a subset of behavioral analytics that takes the data from a given eCommerce platform, web application, or online game and rather than looking at all users as one unit, it breaks them into particular groups for analysis. These related cohorts, or groups, usually share common characteristics or experiences within a defined time-span.

Dynamics Cohort analysis is a tool to measure user engagement over time. It’ll help us to know whether user engagement is actually getting better over time to time or it’s only appearing to improve because of growth.

Dynamics Cohort analysis proves to be valuable because it helps to divide the growth metrics from engagement metrics as growth can easily mask engagement problems. In general, the lack of activity of the old users is hidden by the impressive growth numbers of new users, which results in concealing the lack of social engagement from a small number of people.

Furthermore, two main benefits are:

  1. Product lifetime – comparing different cohorts at the same stage in their life cycle we can see what % of people in a cohort are returning back to the app after 3 days and so on. The early lifetime months can be combined to the quality of your on-boarding experience and the performance of customer success team.
  2. User lifetime – seeing the long term relationship with people in any cohort to decide how long people are coming back and how strong or how valuable that cohort is. This can be presumably combined to something like the quality of the product, operations, and customer support.

How to Improve Your Retention Cohort?

Dynamics Cohort analysis involves looking at the groups of people, over time, and observing how their behavior changes. For example, if we send out an email notification to 50 people, some may buy the product on day 1, less on day 2, even fewer on day 3, and so on. But, if we send another email to 100 people, after few weeks, they’ll be ready for buying the product on their “day 0” while the first sent email might show its relevant lag effect on the buying decision.

In order to track how users behave over time or how the same behavior differs for different cohorts, Dynamics cohort analysis helps to compare these people by the way or time they were acquired and by the retention of those users over time.

But, how to break the group of users into cohorts for cohort analysis can be done in multiple ways:

Dynamics Acquisition Cohorts: divide users by when they signed up first for your product. For your application users, you might break down your cohorts by the day, the week or the month they launched an app, and thereby track daily, weekly or monthly cohorts.

Dynamics Behavioral Cohorts: divide users by the behaviors they have (or haven’t) taken in your app within a given time period. These could be any number of different actions that a user can perform App Install, App Uninstall, App Launch, Transaction or Charged, or any combination of these actions or events.

Acquisition Cohorts – Finding Problem Moments in Your App

Revisiting the daily cohort which is an acquisition cohort.

This retention curve immediately reflects an important insight about 75% of the users stop using the application after the 1st day. After that initial large drop, a second brisk drop occurs after 5th day under 12%, before the curve starts to level down after 7th day its leaving about 11% of original users still active in the application at 10th day.

The above retention curve indicates that users are not getting quickly to the core value of the application, resulting in drop-offs. Hence, it’s evident to improve the on-boarding experience to get the user to the core value as immediately as possible, thereby boosting the retention.

Thus the acquisition cohorts are great for identifying trends and the point when people are aware, but it’s hard to make actionable insights like to understand why they are leaving which will requires the use of another type of cohorts like behavioral cohorts.

Behavioral Cohorts – Discover Which Behaviors Drive Retention

A simple example of Dynamics behavioral cohort can be – all users who read reviews prior to purchasing a product. This can answer interesting questions, like,

Are the users who read reviews have a higher rate than those users who don’t read reviews, or Are the users more engaged has longer sessions, more time in app or fewer drop-offs
An app user, after an app install or launch will makes hundreds of decisions and exhibit countless little behaviors that lead towards their decision to stay or go. These behaviors could be anything like using a core feature Y but not using core feature Z and by engaging only with notifications of type X and so on.

Let us test the user’s behavior by comparing retention between below cohorts:

Behavioral Cohorts

Both user segments had the intention to transact on your application. But one user segment choose to proceed with the checkout but the other choose to abandon your application. What you’ll do to reduce the shopping cart abandonment?

Dynamics Cohort analysis can get answers to the questions like:

When is the better time to reengage with your users? When is the best time for remarketing?
What is the rate of acquisition of users to maintain your application conversion rate?
From the above retention tables, you can conclude that most of the users who had abandoned the shopping cart did not engage with the application again and not even 1 day after the acquisition date. So, you have less than 1 day to re-target them with the new offer and increase the chances of getting revenue.

From that data, you can develop a systematic, quantitative approach to know how users can fall in love with your application and then make it happen again and also, you can make good strategies to increase your retention after ascertaining what works and what doesn’t.

Conclusion

The power of Microsoft Dynamics cohort analysis lies in the fact that, it enables not only to view which customers leave and when they leave, but also to understand why the customers leave your application  so that you can fix it.

Locus IT has a thorough knowledge of some of the well-known industries and the particular challenges that currently exists in this industry. We provide Dynamics Cohort training, Dynamics Cohort support, Dynamics Cohort implementation and so on. We can help you to plan and design a solution using proven tools that meet your specific needs, streamlining operations, and increasing profitability.

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