When a business person shows you the graph of the growth status for his new service or product, whether the line is moving up, down or straight it may not be the same as you think and varies from the actual reading. So what you can do to know the real situation of the story?

The major mistake committed by the businessmen is that they are focusing more on user growth, rather have to understand whether it is creating a right behaviour among the users that lets them come back for more services. Without establishing a correct user behaviour it will be a tough time to maintain a healthy user base.

How does Maplitho Track User Behaviour?

From our experience to date, the best way to track user behaviour is to determine the retention rate through cohort analysis. In this blog, we will discuss briefly on cohort analysis & retention rate and its benefits.

  • Cohort Analysis

In general, a cohort is a group of people sharing a particular characteristic for a particular period of time. Example of a cohort is a group of people who are present at a meeting on a particular day. The use of cohort analysis is that it follows user action or behaviour at the time.

  • Retention Rate

The retention rate for a cohort is calculated as the ratio of the number of active users at the end of a period to that of active users at the start. A user is said to be active if he/ she is active on a product on a particular day.

Benefits of Cohort Analysis
  • The most crucial information will not be negatively affected by any external occurrences. For example, if you mention a growth hacking strategy in a blog there will be a great hike in their growth without affecting the pre-existing cohorts.
  • Cohorts help you to get the user behaviour from the beginning itself and gives you the answer to some basic queries like why is the user retention weak? or is there any user behavioural strategies that can be implemented.
  • Cohort analysis will aid you to better understand the customer which lets to focus more on them. More you analyze, the better you can understand.
Retention Rates Varies with Industry

Retention rates depend on the type of industry. Notably, an e-commerce site which is able to track users can live with much lower retention rate than a social media site having millions of active users. Generally, a 20% retention rate is the most matching one for almost all the industries.

Winding up

To be successful in any business, it is mandatory to have a user behaviour that lets them come back for more. Without establishing even if you are having good customer acquisition rate it is difficult to maintain an active user base. Growth hacking marketing agency helps you with the calculation of retention rate to determine the strength of user behaviour and cohort analysis to get valuable insights for the success of your business.

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