Cohort marketing, you are so darn intimidating. I think it’s the word “cohort” that has so many marketers nervous. It reminds us of numbers, statistics, high school algebra, crazy formulas, grids, and diagrams. [shivers]. But friends, it’s time to get over the stigma associated with cohort analysis, because in today’s market, we need to be cohort marketing. Cohort marketing is no longer for a few select enterprise companies with teams of analysts; every single one of our companies should be taking advantage of this very powerful tool: cohort marketing.
What Is Cohort Marketing?
When it comes to marketing, the term “cohort” describes a group of users or customers grouped by experiences, behavior, or other predetermined factors. You can call them groups. Or segments. Or types. Whatever you call it, any time you group people together based on a variable like this, you are building out cohorts.
Cohorts are not to be confused with “demographics.” Demographics tend to be less behavioral and more logistical, like income level, location, etc. With that said, when you build out personas for your customer journey mapping (because we are all doing that, right? :)), demographics should most certainly play into your personas, and can even make their way into your cohorts depending on what you are aiming to do. But for our purposes here, I want to point out that they are not the same thing. Knowing the demographics of your audience does help with marketing, but building more complex and robust cohorts to steer your marketing is like…whoa. Amazing.
Why Should Marketers Do Cohort Marketing?
1. Understand what’s working and what’s not. Our team is bullish on this one. One of the most overlooked yet powerful cohorts marketers can employ are a “control” cohort versus an “exposed” cohort when kicking off new initiatives, programs, campaigns, etc. The BigDoor loyalty platform has this capability baked into it to help our partners know exactly how much added value a loyalty program or campaign bring to the table. When you launch a new loyalty effort (or any marketing campaign, for that matter), you need to keep a control cohort to compare those results against the exposed cohorts data. This will help you determine effectiveness of a marketing effort easily and make prioritizing, allocating budget, and resource decisions that much easier.
2. Collect more actionable data. Another great advantage of building out cohorts is the degree to which you can track data, and then slice and dice for the best insights. As marketers, we are always stressing how data-driven everything should be, but we also aren’t just driving by analytics; we have to be exploring new ways to test and collect more data. Cohort marketing enables all of us to see sequences of behavior that best return for our businesses, as well as opportunities for improvement. By building out cohorts, you create tests between groups of users, and in doing so, unlock a new way to approach and use your customer analytics.
3. Personalize the customer experience. After you’ve collected all of that robust data, you can then truly personalize the customer experience. This means a lot of things: you can best communicate, best meet their needs, best direct them to the most valuable products, services, etc. In short, you are able to give your customers exactly what they need rather than a generic, one-size-fits-all experience. Personalization is key to customer retention and building loyalty with a user because they want to feel special and appreciated. There is no better way to do that then to show them you care about every single touch-point along the customer journey. This sort of personalization is founded on good cohort marketing.
4. Cross-team alignment. From all of this great understanding, data collecting, and personalization comes one of the most powerful pieces of cohort marketing: the way in which it aligns cross-team goals. When you are tracking goals at this level and are able to test and collect data at scale, you really can offer up some company wide insights that keep the teams all on the same page and grooving in the right direction. When customer service, marketing, product, and engineering have common cohorts, explanations, and data to point to, it helps a lot of conversations move along much quicker. Prioritization becomes easier, and silos dissolve. It’s a beautiful thing.
Those are the top reasons to jump into cohort marketing. You may still be thinking, “But it’s so intimidating.” We hear you. But it’s also so powerful. We are so convinced that cohort marketing should be at the heart of your marketing efforts that we thought we’d toss out some ways to get started.
Where to Start with Cohort Marketing
Get the conversation going. This may seem obvious, but we suggest kicking this off from a point of curiosity. Get a few cross-company stakeholders in a room and ask if anyone has experience with cohort marketing. Do any of them see cohorts emerging organically in their department? Are any of them running any of this already? Or testing with this approach in mind? Just start the conversation in a less-prescriptive manner. For those in the room that have heard of cohorts, this will likely be a welcome conversation. For those that are less familiar, this will invite them to help shape what it means at your company rather than intimidate them from the beginning.
Find a champion. Heck, maybe this is you! Someone on your team or another team at your company loves this stuff. They might not even know it yet, but they do. A good person to champion customer cohorts tends to be analytical in background, but is also very customer-centric. They are constantly suggesting personalized features and new ideas to best serve the customer. They likely want to a/b test the snappity snap out of things. This person is your champion! Find them, take them to lunch, and talk about the state of customer personas, cohorts, and testing. Hear what they are already thinking, and see if they want to join forces for the best of the company on this effort.
Educate. Once the conversation is grooving, it’s time to make the pitch. Point to this post and others that can help explain how powerful cohort marketing is. Whether they just are getting started or are already exposed to it, there is always room to educate further. Some say that cohort analysis is key to marketers moving fast, and others are as bold as to say if you aren’t using cohorts in marketing, you’re doing it all wrong. We believe that cohorts are incredibly powerful for marketers, and we believe that companies using them have a huge advantage.
Run a test. Get started setting up a simple test. Select a group of your users with similar attributes, tag them, and create a hypothesis. Maybe you think if you show them a resource, or tutorial, or a certain message at a certain time it will encourage them to do something (log-in sooner, use a new part of the product, sign up for something else, join the community, etc.). Just run a test. You will be able to show how quickly you can hypothesize, test, collect data, and iterate. Marketing becomes more about solving, more proactive, and far less reactive. It puts the power around truly delighting the customer back in your hands, and that is a really exciting thing.
We ran through a lot, but we hope you found it useful. Cohort marketing is hard, and a lot of the tools available to us report in aggregate. It’s a safe and easy place to play. But the problem is, we can no longer market to the masses and expect it to resonate. There is too much noise, and the consumer has evolved. We owe today’s consumers beautiful, personalized, and highly valuable experiences. To do that, your brand needs to be doing cohort analysis.
I am a huge fan of great marketing. I think we are now seeing an opportunity (with the tools, knowledge, platforms, etc. available to us) to really do great marketing. But to market at this level, you need to be marketing to the individual, and to do that, you must be unleashing the power of cohort marketing.