How do I use cohort analysis to understand user retention?

Cohort analysis groups users by shared characteristics (sign-up date, acquisition channel) and tracks behavior over time. Use it to understand retention by grouping users by sign-up month and tracking how many return over time. Analyze which acquisition channels bring best long-term users. Compare retention rates across cohorts to identify trends. Cohort analysis reveals whether retention is improving or declining. It helps understand customer lifetime value by cohort. Good cohort analysis requires proper tracking setup. Many consultants help set up cohort analysis and interpret results. Understanding retention by cohort helps optimize acquisition and improve product to increase retention.