Cohort retention rate: E-Commerce

How does this template benefit your business?

There are a lot of reasons why you need to focus on customer retention:

• It has been proven that repeat customers spend more in comparison with new customers. 
• Happy customers become sort of brand ambassadors. They talk positively of your product with their friends, family, colleagues…
• Marketing new products and services to repeat customers is typically cheaper than attracting new customers. If you think about it, it’s obvious. It’s easier to sell to a customer who already trusts you rather than to a complete stranger. 

This report focuses on the loyalty of your repeat customers to help you check if you’re doing a good job with customer retention and if there’s something you can do to improve your strategy. 

How does it work?

The template breaks down your customers by monthly cohorts. A cohort is a group of customers who made the first purchase on your site in the same time frame. In this template, we are looking at cohorts of users who made the first purchase in the same month.

You can see not only when customers made their first purchase, but also **whether they purchase again **in the following months or not. This helps you assess whether your customer retention strategy is a good one or not. 

You can also check if the actions you took to improve customer retention, like newsletters and special offers, are effective or not. Let’s say you’re reviewing the report in January, just after the Christmas holiday season. Earlier in November, you sent out a newsletter only to existing customers with a variety of deals. 

If in November and December the report shows you an increase in repeat customers, then you’ve done a great job! If not, you know you’ll want to explore other marketing options next year.