---
title: "Cohort analysis: definition, formula and example"
description: "Following a group of customers who started together, month by month: how many remain, and what they have earned so far."
url: https://offersuite.io/glossary/cohort-analysis
updated: 2026-10-13
---

# Cohort analysis

Following a group of customers who started together, month by month: how many remain, and what they have earned so far.

## In plain words

A cohort is a group of customers who started at the same time, such as everyone who subscribed in March. Cohort analysis follows that group forward: how many are still subscribed after one month, two, six, and how much profit they have produced along the way.

It separates two things that a monthly total blends: how well you keep customers, and how many new ones you added. A business can grow its revenue every month while each cohort does worse than the last. Only the cohort view shows it.

## Formula

- Share remaining at month m = customers of the cohort still active ÷ customers it started with
- Cumulative profit per customer at month m = Σ margin of the cohort's orders so far ÷ customers it started with − acquisition cost

## Worked example

A cohort of coffee subscribers acquired for $30.00 each. The engine's projection has 70.0% of them still subscribed after the first month, 47.6% after three, 33.0% after six and 17.4% after twelve.

Per subscriber, the cohort stands at −$26.21 after the first order, −$5.93 at month three, $7.11 at month six and $23.29 at month twelve.

### The example order

A $40.00 bag of coffee, shipped free, every cost counted

Revenue $40.00 to contribution margin $15.36 (38.4%)

Revenue

$40.00

Cost of goods

−$12.00

Pick and pack

−$1.18

Packaging

−$0.50

Shipping label

−$7.50

Card fee per order

−$0.30

Refunds

−$2.00

Card processing

−$1.16

Contribution margin

$15.36

2 declared kinds cost nothing on this option

Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.

## A cohort is not a segment

A cohort is defined by when its customers started. A segment is defined by something else about them: where they came from, what they bought. You can cut a cohort by segment, but mixing start dates inside one group blends new customers with old and hides how retention is changing.

## Using it

Build cohorts by start month and by the offer that won them. Compare the same month of life across cohorts: month three of March's subscribers against month three of April's. If newer cohorts fall away faster, something changed in how you acquire them, often a deeper discount that brought less committed buyers.

## In Offer Suite

Offer Suite links each renewal to the first order whose cart started the subscription, so renewals are attributed to the option that won the subscriber. Its simulator projects a cohort month by month from a renewal curve the brand supplies.

Source: Offer Suite's offer simulator.

## Related

- [Glossary **Glossary of offer economics** The terms behind offer profit, defined plainly with their formulas and a worked number: contribution margin, profit per visitor, break-even lift and more.](https://offersuite.io/glossary)
- [Calculator **Subscription payback calculator: CAC and churn** How much a subscriber's first order loses against what you paid to acquire them, how many renewals it takes to earn that back with churn, and in which month.](https://offersuite.io/calculators/subscription-payback)
- [Calculator **Subscription first order vs renewal calculator** Margin on a subscription's first order and on each renewal, and the expected profit per subscriber over time at your retention, against a one-time buyer.](https://offersuite.io/calculators/subscription-first-order-vs-renewal)
- [Glossary **Renewal curve: definition, formula and example** The renewal rate at each order number: who takes the second order, the third, the fourth. It starts low and settles higher as the casual leave.](https://offersuite.io/glossary/renewal-curve)
- [Glossary **Retention rate: definition, formula and example** Of subscribers who received an order, the share who receive the next one. Each renewal's profit is weighted by it, so small changes compound quickly.](https://offersuite.io/glossary/retention-rate)
- [Glossary **Cohort simulation: definition, formula and example** Running a group of customers through a plan many times, with chance and uncertain inputs varied, to get a range of outcomes instead of one number.](https://offersuite.io/glossary/cohort-simulation)