SaaS companies have certain metrics to monitor to keep up with the evolution of their SaaS product. Nowadays, there are efficient ways to measure even the relationship and the level of interaction that users have with the products or services, this is useful to understand the impact achieved. DAU vs. MAU is the key in this aspect.
In this article you will get detailed information about the DAU vs MAU ratio, how to calculate it and why it is important. Without a doubt, it is a topic of interest for those seeking to understand the dynamics between your product or service and consumers.
What is the DAU vs MAU ratio?
To begin with, it is useful to remember what the two metrics involved in the calculation of this ratio represent. First, the Daily Active Users, DAU, is the total number of active users of a product or service during a day.
The Monthly Active Users (MAU) is the total number of active users during a month.
Now, considering this, DAU vs MAU ratio is a metric that quantifies the daily activity of monthly users. That is, it measures the number of days that monthly users made an action to qualify as active users.
In general terms, thanks to the DAU/MAU it is possible to get a numerical approach to the stickiness of a product, i.e. the frequency with which users interact with it. Therefore, the DAU/MAU ratio is key in measuring the engagement generated.
How to calculate DAU MAU Ratio?
The calculation of this metric is quite intuitive and simple. Just divide the DAU by the MAU and you will get the result. That is, you must divide the number of active users during a day and divide it by the number of active users during a month.
However, although it is a simple calculation as it involves a basic mathematical operation, it is advisable to establish the input data rigorously in order to achieve consistent results. Below, we detail what you should consider to correctly calculate the MAU/DAU Ratio.
Establish what is an active user for your product
To calculate the DAU vs MAU Ratio, it is necessary to have available the number of active users, both daily and monthly. Thus, it is essential to rigorously define what is considered an active user for your product.
The figure of active user may vary depending on your saas, so it is important to stop and think about this definition, but not to suffer a paralysis by analysis.
DAU vs MAU Ratio: a way to measure engagement
In this sense, having a prior definition of an active user is the key to achieving consistent results that are in line with the reality of the interaction between users and your product.
On the other hand, having ambiguities in the concept of active user for your company or product in particular can generate confusion and many gray areas when calculating this metric.
In this previous article you have more details on how to calculate them.
How to calculate active users in a SaaS: DAU MAU Ratio: a way to measure engagement in saas
Rigorously calculate the DAU and MAU
Consistency in calculations and the criteria for arriving at the numbers are two important aspects in all things related to Saas metrics and the DAU/MAU Ratio is no exception. Using the right data and being consistent in calculation procedures avoids the propagation of errors.
Consider your relationship with other metrics
As we have already discussed The DAU/MAU Ratio is an effective metric for calculating the usage of our service by users. However, it should not be used as a stand-alone data to make decisions regarding business growth or performance.
The ideal is to combine this metric with other relevant metrics to get a detailed, complex and comprehensive analysis of what your company is offering to its users. In addition, having the big picture helps to make better decisions about improvements or changes in dynamics that promote organic growth of products.
What is a good DAU/MAU Ratio
The standards for considering a ratio as good or bad depend on the type of product you offer, your niche market, and what you are looking for from users.
In particular, there are services that will be important for them to access every day and others where for example a ticket scanning service, which will only be accessed when traveling or consuming. Generally, meanwhile, B2B oriented products have other purposes and the standards for a good DAU/MAU ratio are lower.
In that sense, it is best to know in detail the standards of your niche and adapt them to the needs of your particular product.
Final conclusions: why the DAU/MAU ratio is important
The DAU vs MAU measures the stickiness of your product, i.e. the number of users who use the application regularly and emphasizing the frequency of that use. Thanks to this measure you can quantify with certainty the relevance and usefulness of your product for users.
Beyond that, this ratio is a good way to evaluate the overall performance of the SaaS company, since if a user does not use the product he is closer to churn, so when combined with other metrics it can give us insights on improvements to be made.
In short, the DAU vs MAU is a metric that offers answers of different characteristics and is of key importance for those seeking to know the performance of their products, considering the relationship with users and their frequency of use.
You can use our free data analysis tool for Saas to calculate DAU vs. MAU and other metrics for free.