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Cohort Revenue Analysis

Compares cohorts at equal age rather than at a point in time, which is the error that makes every trend unreadable.

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CategoryFinanceForAnalysts, Founders, OperatorsTested onClaudeChatGPT

Running it, start to finish

  1. Restructure the data by cohort age before reading anything.
  2. Find where the curve flattens, or state that no cohort is old enough.
  3. Compare recent to older cohorts at the same age to test whether changes worked.

What you get back

The output this produces, every time.

  • Enforces equal-age comparison, without which older cohorts always look better for no reason.
  • Identifies where the retention curve flattens, which is what any lifetime estimate must rest on.
  • Reports revenue and logo retention separately, since they can move in opposite directions healthily.

Getting better results

Where this usually goes wrong, and how to avoid it.

  • Check the cohorts are comparable. If channel or plan mix shifted between periods, the trend is a mix shift and not a retention change.
  • Do not extrapolate an unflattened curve. It is the most common overstatement here, and lifetime value built on it is a guess with decimal places.
  • Watch for the healthy-but-ugly pattern. Losing small customers while growing large ones looks like churn on one chart and is a good business.

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Written for The AI University. Every prompt in this library is original work — authored, tested and revised here, not collected from elsewhere. 365 of them, free with an account.