CLV & Cohort Analysis

Cohort Heatmaps: Building and Interpreting

See how to construct cohort heatmaps that separate lifecycle effects from calendar seasonality. Interpret color patterns to spot retention decay, expansion, and measurement pitfalls.

In a standard cohort heatmap, rows are cohorts and columns are ______.

time periods since cohort start (e.g., month 0, month 1, …)

customer IDs

A/B variants only

geographic regions only

Cohorts group users by a start event, and columns track outcomes by elapsed time. This separates lifecycle effects from calendar dates.

Calendar cohorts align columns by real calendar months; activity cohorts align by ______.

device type

signup geography

elapsed periods since the triggering event

marketing channel only

Activity cohorts (a.k.a. relative cohorts) index performance by time since start, not by absolute month names.

A darkening color to the right across most rows usually indicates ______.

seasonal spikes in new signups

decay in retention or engagement as customers age

improvements in acquisition mix

data deduplication errors

Rightward movement tracks aging of cohorts. Many products show declining activity with tenure.

To diagnose seasonality, you would prefer ______.

rolling retention without cohorts

calendar cohorts with columns aligned to the same calendar months

activity cohorts only

randomized cohort grouping

Seasonality appears as vertical patterns when months line up across cohorts. Activity cohorts remove that visibility.

A key best practice for color scales in heatmaps is to ______.

use a consistent scale across the chart so colors are comparable

hide the legend to simplify visuals

invert scales randomly to emphasize change

auto‑scale each cell independently

Consistent scales and a visible legend ensure accurate comparisons between cells and rows.

Classic retention at month 3 typically uses which denominator?

the original size of the cohort at month 0

the current active users at month 2

all customers across cohorts

total site visitors

Retention rates reference the initial cohort count to show how many remain by each period.

Which pattern suggests a product change affected all cohorts from a point in time?

random single‑cell outliers only

a vertical shift in colors starting at one calendar column

a checkerboard in a single row

a diagonal gradient following cohort age

Vertical changes align with calendar time, pointing to seasonality or global changes like pricing or product updates.

Small cohorts can look noisy. A practical remedy is to ______.

rescale each row independently

delete rows until it looks smooth

aggregate adjacent cohorts or apply a rolling average before coloring

drop the legend

Aggregation and smoothing reduce noise without distorting the overall trend as much as independent rescaling would.

When building cohorts for revenue per customer, a common pitfall is ______.

labeling rows by month

including an explanatory legend

mixing currencies or price changes without normalization

sorting cohorts by start month

Unadjusted price changes or currencies can make cohorts incomparable, misleading the color intensities.

If you want to isolate lifecycle effects, which cohort axis choice is best?

no cohorts, just totals

grouping by geography with calendar months

calendar columns with random cohorting

activity (elapsed‑time) columns with cohorts by start month

Using elapsed‑time columns aligns cohorts by age, revealing how outcomes evolve with tenure independent of seasonality.

Starter

Good start—review definitions and formulas, then retake the quiz.

Solid

Nice work—tighten the gray areas to turn insights into action.

Expert!

Outstanding—you can apply these concepts to real revenue decisions.

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