What does 'Cohort Analysis' mean?

Cohort analysis is an analytical approach that categorizes and splits data into groups with similar characteristics. This method is commonly used to help firms isolate, analyze, and uncover patterns in a user's lifetime, improve user retention, and better understand user behavior in a specific cohort. Customer cohort analysis is highly beneficial in marketing and business use cases. For example, analysts can determine whether or not the average customer's quality is improving across the customer lifetime by looking at patterns in cohort expenditure over time. The term for this procedure is "lifetime value cohort analysis."