Tracking user groups over time to understand true behavioral patterns
Cohort analysis groups users by shared characteristics (usually signup date) and tracks their behavior over time. Unlike aggregate metrics that hide important trends, cohort analysis reveals whether your product is truly improving by comparing how different vintages of users behave. This is the most important analytical technique for SaaS, subscription, and marketplace businesses. It answers "are newer users retaining better?" and "is our product getting better over time?"