Make a Cohort Analysis in Excel

Why It Matters

Cohort analysis in Excel gives businesses a low‑cost, data‑driven view of customer profitability, enabling faster strategic decisions on pricing, acquisition spend, and retention initiatives.

Key Takeaways

• Set up assumptions: growth, revenue, acquisition cost, retention.
• Build cohort tables using locked cell references for easy dragging.
• Calculate revenue, lifetime value, and profitability multiples per cohort.
• Visualize retention and cohort performance with conditional formatting charts.
• Model limitations: no discounting, flat revenue, identical retention curves.

Summary

The video walks viewers through constructing a dynamic cohort analysis template in Excel, enabling businesses to track customer behavior, revenue generation, and acquisition profitability across monthly cohorts.

It begins by defining assumptions—initial customers, month‑over‑month growth, average revenue per user, acquisition cost, and retention rates—then demonstrates how to lock these cells and propagate calculations for each cohort’s size, revenue, total cohort revenue, and customer‑lifetime revenue. The tutorial shows formulas for CAC, LTV, and LTV‑to‑CAC multiples, emphasizing the use of absolute references (F4) and fill‑down/right shortcuts.

The presenter highlights practical examples, such as an 8 % growth rate, $50 ARPU, $75 CAC, and an 85 % monthly retention, illustrating how a 5× LTV‑to‑CAC ratio signals profitability while noting that the ratio declines as data gaps appear. He also promotes a free “50 Excel hacks” template from HubSpot and demonstrates charting retention trends and applying conditional formatting for visual clarity.

By providing a reusable model, the tutorial equips startups and analysts with a quick way to test pricing, marketing, and retention scenarios, though it warns of limitations like lack of discounting, static ARPU, and uniform retention curves. Understanding these metrics helps prioritize growth levers and justify investment decisions on pricing, acquisition spend, and retention initiatives.

Original Description

Make a dynamic Cohort Analysis Model in Excel to analyze customer retention.

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In this video, I show you how to make a cohort analysis in Excel. This model will help you understand how customers behave, how much revenue each cohort generates, and whether your customer acquisition is profitable. Best part is, you just need to set this up once, and you've got it as a template forever. A cohort analysis is very common for startups, especially in the software space, as venture capital funds like to use it to understand your customer retention. Firstly, we'll go over the different assumptions, then we'll set up the model with calculations like the customers by cohort or the customer revenue by cohort. thirdly, we'll calculate some of the key metrics including total revenue, customer lifetime value (CLV), customer acquisition lost (CAC), lifetime value (LTV) etc. Then we'll visualize our findings with conditional formatting, charts, and visuals. Finally, we'll go over some of the limitations of a cohort analysis in Excel.

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Chapters:

0:00​ -​ Intro

0:30​ - Assumptions

2:50​ - Modeling

6:35​ - Key Metrics

10:47​ - Charts & Visuals

12:54​ - Limitations