Cohort Analysis
Definition
The measurement of retention, revenue, and gross profit contribution for each customer cohort across the periods following acquisition. Cohort analysis is the required basis for lifetime value calculation at Level 2 and above under the FFI Standard because aggregate-average lifetime value calculations obscure the variation between cohorts and cannot identify whether unit economics are improving or deteriorating as the company scales.
Common Misapplication
The most common misapplication is performing cohort analysis on customer count only without tracking the revenue and gross profit contribution of each cohort. Customer retention and revenue retention frequently diverge, particularly in businesses with expansion revenue, making customer-count-only cohort analysis insufficient for unit economics purposes.
FFI Standard Reference
This term is defined and applied in Book 2, Section 2.2: The Unit Economics Standard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Cohort Analysis. https://ffistandard.org/glossary/cohort-analysis/. 2026.