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Actionable Cohort Analysis: How to use behavior-based cohorting to maximize engagement and retention

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Most companies aren’t going deep enough with their user data.

Conversion funnels, retention, and segmenting by install cohort help you identify where your users are getting stuck or leaving, but aren’t very helpful in telling you what you should do instead.

In this session from Opticon 2015, Spenser Skates, CEO and Co-founder of Amplitude, discusses how you can use behavior-based cohorting to maximize user engagement and retention. By grouping your users based on what actions they take, you'll discover how you can improve your product to drive growth.

As with Facebook’s famous ‘7 friends in 10 days’, learn how you can find the ‘magic moment’ to focus your product around.

Watch the video here: https://amplitude.wistia.com/medias/hdpnipul1l

Published in: Data & Analytics
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Actionable Cohort Analysis: How to use behavior-based cohorting to maximize engagement and retention

  1. 1. Know your users. Grow your app. Actionable Cohort Analysis: How to use behavior-based cohorting to maximize engagement and retention. Spenser Skates CEO and Cofounder, Amplitude Analytics
  2. 2. Let’s break down ‘analytics.’
  3. 3. Level 3: What drives growth Level 2: Where are my problems Level 1: Counters Behavior-Based Cohorting Data Science Companies at this level: Facebook, Amazon, Netflix, Zynga Funnels Retention Segmentation Events DAU, MAU, Revenue The Three Levels of Analytics
  4. 4. Level 3: What drives growth Level 2: Where are my problems Level 1: Counters Behavior-Based Cohorting Data Science Companies at this level: Facebook, Amazon, Netflix, Zynga Funnels Retention Segmentation Events DAU, MAU, Revenue The Three Levels of Analytics
  5. 5. Level 3: What drives growth Level 2: Where are my problems Level 1: Counters Behavior-Based Cohorting Data Science Companies at this level: Facebook, Amazon, Netflix, Zynga Funnels Retention Segmentation Events DAU, MAU, Revenue Most companies are here. The Three Levels of Analytics
  6. 6. Completing 50% of Profile Adding 7 Friends What Drives Long Term Retention? Posting on a wall Optimized experience around adding and discovering friends.
  7. 7. Properties that have a review Properties with Professional Photography What Drives Revenue? Properties with a personalized description Shifted from a search based to a browse based experience to encourage aspirational travel
  8. 8. Level 3: What drives growth Level 2: Where are my problems Level 1: Counters Behavior-Based Cohorting Data Science Companies at this level: Facebook, Amazon, Netflix, Zynga Funnels Retention Segmentation Events DAU, MAU, Revenue Most companies are here. The Three Levels of Analytics
  9. 9. Level 3: What drives growth Level 2: Where are my problems Level 1: Counters Behavior-Based Cohorting Data Science Companies at this level: Facebook, Amazon, Netflix, Zynga Funnels Retention Segmentation Events DAU, MAU, Revenue Most companies are here. The Three Levels of Analytics
  10. 10. Level 3: What drives growth Level 2: Where are my problems Level 1: Counters Behavior-Based Cohorting Data Science Companies at this level: Facebook, Amazon, Netflix, Zynga Funnels Retention Segmentation Events DAU, MAU, Revenue Most companies are here. The Three Levels of Analytics
  11. 11. What is a behavioral cohort?
  12. 12. What is a behavioral cohort? In traditional analytics, a “cohort” has referred to an Acquisition Date Cohort: A group of users who started in the same time period, and are then tracked together over time.
  13. 13. What is a behavioral cohort? Acquisition Date Cohorts can tell you that users who joined in June are retaining better than users who joined in May…but it’s hard to take action on that information.
  14. 14. What is a behavioral cohort? Behavioral cohorting allows you to group your users based on specific actions that they have or have not taken in your app or website. This helps you identify user actions or product features in your app that drive growth.
  15. 15. Compare retention between behavioral cohorts Users who add 7 Friends in 10 Days. Users who do NOT add 7 friends in 10 days. 100% 80% 60% 40% 20% 0% Day 14 Users who add 7 friends in 10 days: 36.1% Day 0 Day 1 Day 3 Day 7 Day 14 Day 30 Product Decision: Optimize Facebook experience around adding and discovering friends
  16. 16. How to use behavioral cohorting to make product decisions Come up with a hypothesis on what user actions lead to long term retention Apply cohorts to retention reports and search for insights Test the hypothesis by creating cohorts based on specific user actions Step 1 Step 3Step 2
  17. 17. Let’s walk through an example.
  18. 18. Step 1: Come up with a hypothesis Example: Social music app Key user actions on the 1st day: •  Joining a community •  Completing user profile Come up with a hypothesis on what user actions lead to long term retention
  19. 19. Step 2: Create cohorts to test your hypothesis Cohort: Users who joined at least 1 community on the 1st day of use
  20. 20. Step 2: Create cohorts to test your hypothesis Inverse Cohort: Users who did NOT join at least 1 community on the 1st day of use
  21. 21. Step 3: Apply cohorts to retention reports
  22. 22. Step 3: Apply cohorts to retention reports
  23. 23. Step 3: Apply cohorts to retention reports
  24. 24. Step 3: Apply cohorts to retention reports
  25. 25. Step 3: Apply cohorts to retention reports Takeaway: Users who join at least 1 community on the 1st day of app use have significantly increased 7 and 14 day retention compared to users who do not join a community
  26. 26. Now we can repeat this process for our other candidate action: Completing the user profile on the 1st day
  27. 27. Cohort: Users who completed their profile on the 1st day of use
  28. 28. Takeaway: Users complete their profile on the 1st day of app use have significantly increased 7 and 14 day retention compared to users who do not complete their profile Cohort: Users who completed their profile on the 1st day of use
  29. 29. Both joining a community and completing a profile on the first day correlate with improved retention. Let’s compare the 2 pairs of cohorts on the same graph. Now what?
  30. 30. Takeaway: Joining a community has a greater effect on retention than completing a profile.
  31. 31. Takeaway: Joining a community has a greater effect on retention than completing a profile. Product Decision: Encourage users to join a community during onboarding experience.
  32. 32. •  Unlike traditional acquisition date cohorts, behavioral cohorts group users by specific actions they take in your product •  Behavioral cohorting allows you to discover the actions that can maximize long-term retention, just like Facebook’s “7 friends in 10 days.” •  There are 3 steps to behavioral cohort analysis: •  Come up with a hypothesis of actions that promote retention •  Create cohorts to test that hypothesis •  Apply the cohorts to retention or engagement reports Summing Up
  33. 33. Spenser Skates spenser@amplitude.com https://amplitude.com Questions?

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