Daily Active Users (DAU) and Monthly Active Users (MAU) are two widely used metrics in the business world that tell you about your app's success, user engagement, revenue potential and much more. Most, if not all, successful platforms keep track of their DAU and MAU.
What's less known, however, is that the DAU/MAU ratio is also an important and informative metric companies need to keep track of. It measures user retention, product stickiness, and much more. In this blog post, we'll tell you all about its benefits, how to calculate it, and tips to improve your apps and websites' DAU/MAU ratio. Continue and learn more about this key metric.
Why Does the DAU/MAU Ratio Matter?
Before you spend resources trying to collect data on the DAU/MAU ratio and generate reports analyzing it, you first need to understand why it is vital and how it is one of the key performance indicators businesses use to track their performance. This section will answer these questions specifically.
- It Measures the Stickiness of Your Products: Customer retention is critical as, generally, it is far costlier for businesses to acquire new customers vis-a-vis retaining existing ones. The DAU to MAU ratio helps you understand how many unique users you retain across the month. If you have a highly variable DAU while you maintain your MAU averages, it means you are not succeeding in keeping users engaged with your platform.
- It Sheds Light on How Much Users Value Your Products: the disparity between monthly and daily active users shows how vital users find your app/website. Depending on the industry, users using your app daily could be very important, and in such cases, a low DAU/MAU ratio could spell trouble for your business and point to structural problems you need to address quickly.
- It Helps Teach You More About New Users: By keeping up with massive shifts in the DAU/MAU ratio, you can learn periods where a lot of unique, new users visit your website or use your app, and this can be invaluable in learning more about how new unique visitors react to your platform, how they engage with it, and how successful you are in keeping them weekly and monthly active users. This is invaluable to a company.
- It Quantifies User Behavior: Quantifying how users engage with an app is nigh impossible. There are so many complexities, so many unknowns, so many variables that can paralyze some companies. The DAU/MAU ratio is a good, if simple, metric to quantify user engagement and behavior. It is far more useful than simpler metrics like app downloads, for example, while not needing complex processes like tracking all user activity.
How to Calculate DAU/MAU Ratio?
Calculating the DAU/MAU ratio is rather simple. You just need to divide Daily Active Users by Monthly Active Users, and you get the DAU/MAU ratio in percentage points. 0.10 means 10% of your monthly active users have visited you on a given day. 0.20 means 20% are daily users. The same holds for other figures.
A Common question people usually have to contend with is "what is a good DAU/MAU ratio?" But the answer to this question is fairly complicated and not straightforward. Not only do these measures vary incredibly by company size, industry, and brand, but they also can't be compared and contrasted across different companies in a vacuum. You have to be very careful and properly contextualize the numbers when delivering reports and generating actionable suggestions from the metrics.
Tips to Increase DAU/MAU Ratio
Now that you have your DAU/MAU ratio, you'll be happy to learn it isn't set in stone. There are a variety of ways to improve the number and convert infrequently and unique users into daily active users. In this section, we'll go over some effective tips and strategies other companies and industry leaders have used with success.
#1 Learn Where the Chokepoints Are
By observing the DAU/MAU ratio and how it changes over time, you can understand where your platform's chokepoints are and you can work to improve them. There are a few common patterns you should be aware of.
- A consistent DAU/MAU ratio where both the DAU and MAU numbers are also stagnant not only means you have trouble making your app engaging, but you also have trouble attracting new users. As such, you should work to improve your app's visibility and find ways to get new eyes on it.
- A highly variable DAU/MAU ratio while monthly active users stay stagnant likely means you are getting a high number of unique users, but you're failing to convert them to permanent monthly users. Here, instead of marketing, focusing on the user experience and engagement metrics of the app itself might prove to be far more successful.
These are just two examples to show you how these metrics can help you identify where problems in your app lie. Your numbers will likely look different, and it is up to you to do the necessary leg work and identify where the issues are, but when you do, it'll be highly rewarding and you can expect better potential revenue, more active users, and improved engagement.
#2 Optimise Your Mobile Apps to Prioritise User Engagement
While features, functionality, and aesthetics all matter a lot to the success of mobile apps, one often overlooked quality is user engagement, which is not only key to improving the DAU/MAU ratio but it is the key to success in some industries. There is an entire discipline dedicated to studying how to make apps enticing and addictive, and not only games, but many successful utility apps use it to keep users engaged.
Having a user engagement-centric approach can reflect during the app development process in several ways: Making new user sign-ups smoother, ensuring repeat users are met with new products, services, and announcements, and rewarding an active user in some manner. The possibilities are endless, but they all start with making user engagement a focal point during development.
#3 Make Sure Returning Users Have Something to Look Forward To
How many users decide to use your app daily? Are your DAU metrics low? The main reason for this issue is that there is no incentive, no reason for users to use most apps daily. If you want to improve your DAU to MAU ratio, you need to change this.
Thankfully, there are a variety of methods app and web developers can employ in this effort. They can create loyalty programs, they can introduce daily promotions, they can reward weekly active users with discounts after a set number of interactions. The methods are varied and change a lot based on industry, but they all act to increase the number of unique users your app has daily.
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