Understanding Cohort Marketing: Smarter Segments, Better Results

In today's digital age, sending out the same ad or message to everyone is not effective because individuals desire content that resonates with them. Because of this, marketers are shifting to the practice of cohort marketing, which is aggregating users based on shared characteristics and/or behaviours. Rather than similarly treating all users, cohort marketing allows you to break the users down into smaller groups to see what each group actually wants.

However, this leads to lots of data to manage - and that's where a mobile measurement partner (like Apptrove) comes to play. Apptrove helps marketers organize data, track performance, and identify valuable groups of users over time - and, in essence, helps make cohort marketing actionable.

What is cohort marketing?

So, what is cohort marketing in simple terms? Think of it similarly to dividing your class at school into groups; some are sports enthusiasts, some enjoy reading, and some like to play video games. You wouldn’t want to have everyone do the same lesson. The teacher would adjust the activities for each type of student. 

The same is true for marketing. Cohorts are groups of users that have a certain thing in common. This could be the week they downloaded your app, the campaign they originated from, or their first purchase. By looking at these groups, you can see how their behavior evolves and tailor communication based on it.

Why does cohort marketing matter?

Typically, marketers monitor averages. For example, they might know that “on average, users are spending $5 in the app.” Averages can be misleading, though. Some cohorts could be spending much, much more than others, while other cohorts are spending nothing!   Cohort marketing digs into the data and illuminates which cohorts are most valuable. 

Here are some reasons cohorts matter:

• You can see which campaigns bring valuable long-term users.
• You can see weak points in user journeys.
• You can improve retention by seeing drop-off points.

Without cohort marketing, you are driving blind, but now you know which turns to take. 

Real cohort marketing examples

Let us now consider some examples of cohort marketing to add some structure around the concept: 

1. E-commerce app — A retailer groups users who made their first purchase within 48 hours of app download. They observe this cohort to be the most loyal users. Based on this insight, the retailer then created a welcome offer that would encourage a quick purchase to keep those newly engaged users from dropping off.
2. Gaming app — Developers are studying cohorts of players who joined their game during a holiday marketing campaign. They realize that this cohort of users, who joined during a holiday campaign, was making the most in-app purchases. They decide to optimize their seasonal marketing campaigns and make an effort to attract similar cohorts. 

These examples of cohort marketing demonstrate the power of finding patterns or behaviors that allows you to transform what seemed random data into a clear course of action. 

Cohort-based targeting: from insight to action

Of course, just understanding cohorts is not enough; you also have to do something with the cohorts you have studied. This is called cohort-based targeting. Once you understand how a group of users behaves, you can use that information to drive a more tailored approach to your campaigns.

For example: 

• A music app might notify a cohort of users who stopped listening last week to remind them to start listening again. 
• A fitness app might reward a cohort of users who completed their first 10 workouts with an optional badge as a reward.

Cohort-based targeting helps the user think, "Wow, this is so personal, I didn't think it would apply to me", not just, "Some generic marketing communication I see on lots of platforms today." Cohort-based targeting leads to increased engagement and better results.

Benefits of cohort marketing

What about cohort marketing matters so much to so many businesses? Because it creates tremendous benefits: 

• Increased retention - Identify where cohorts are churning and fix the weaknesses.
• More efficient ad spend - Spend your money on the campaigns that produce uncluttered, valuable cohorts.
• Product growth - Understand which functions engage certain cohorts.
• Increased revenue - Direct your attention to the cohorts that are likely to be buying.

All in all, cohort marketing allows for precision advertising, less waste, and much greater effectiveness. 

In closing 

So what is it really all about for cohort marketing? It's about understanding the outliers in the user base more than just averages. When you know how various groups behave, you can design better campaigns that retain users and, with less effort, grow revenue.

From right into cohort marketing examples , to ways of targeting based on cohorts, I think it could show you the future. And with an application like Apptrove supporting this approach, companies would have a fair shot at trying to implement cohort marketing and make it part of their day-to-day strategies. 

In the end, cohort marketing is not just a buzzword. It is the critical dimension to offer relevant experiences, loyalty, and even staying one step ahead in today's crowded app market.