It’s people, not revenue, that make or break a digital product. Every decision you take, every metric you measure… they all come down to individuals with their own needs, pains and desires. This is why the priority of every business is to keep their people happy, and why you need to know who your daily active users (DAU) are.
What Is DAU? DAU Definition
Your active users are the ones who engage with your service, however you want to define engagement: a share on social media, the push of a button, or a page view. At June for example, we consider users that open a report as our active users.
Your DAU count is simply the total of active users over the span of a given day. 1.9 billion people interact with Facebook every day: this is their DAU.
DAU vs MAU differences
You can also count your active users over the span of a week (WAU) or a month (MAU) if it makes more sense to measure your product usage.
Note that your MAU is not the sum of your daily active users over a month, is the unique count of people using your product in a period of one month.
DAU / MAU ratio
Your DAU/MAU ratio, also known as stickiness, measures how long people stick to your product. It’s a useful indicator of retention. As we previously mentioned in our article on retention analysis, retention is the metric you must focus on the most to reach product/market fit.
Why DAU
DAU health indicator
Your DAU is an estimate of your product’s health.
An increasing DAU is neither necessarily good nor bad, because you can have many new users but no returning ones. An increasing DAU is only good if also your retention rate is good.
A decreasing DAU indicates something is wrong with your acquisition and retention strategies since you’re not getting new users and the ones you already have do not stay around.
DAU in marketing
Looking at how often people use your features is an incredible tool for marketing. You can remove unused features to keep your product simple to understand, while advertising the features people love so that they become new customers or stick around. Understanding on which use cases people activate is key.
DAU in pricing
For enterprise products, you’ll also need to measure your DAU to provide per-seat pricing. Knowing the DAU of each organization you’re serving, you can better adapt your pricing packages to make it fairer and more attractive for everyone.
DAU in product management
A high MAU coupled with a low DAU indicates poor engagement. Understanding how to convert monthly active users to daily active users leads the path to improve user experience. And the more time people spend in your app, the more revenues you are likely to generate. This is why tracking your DAU/MAU ratio is a good thing to monitor product/market fit, if it makes sense for your product to be used on a daily basis.
When not to use DAU: is it a vanity metric?
The problem with taking raw DAU counts as a key performance metric is how unlikely it is to help you make smart product decisions. You cannot use it to measure real usage, or to compare yourself to a competitor.
It has to be refined according to your business goals, in specific contexts. DAU per feature, for example, or the proportion of returning users in the DAU count. Even companies like Twitter entirely stopped publishing their DAU to favor monetized DAU (mDAU): focusing on the wrong thing is a startup killer.
Similarly, the DAU/MAU ratio is a great indicator of product/market fit for B2C SaaS products like search engines or messaging software, but it’s not telling of products you don’t use on a daily basis (e-commerce CRM, for example).
How To Calculate DAU
Calculating your DAU is a matter of answering two questions: 1) what’s a user and 2) what’s engagement, for your product.
Facebook considers people viewing a Facebook post embedded in a foreign website as active users.
If we consider a user is someone visiting your SaaS landing page, and engagement is measured by their login status, then your DAU would be calculated using the amount of times the Login button has been clicked. Each login click is reported in a database, and your DAU is the number of clicks on a given day.
Daily Active Users Benchmarks
In 2017, Mixpanel released benchmarks to compare your DAU/MAU ratio to your industry’s average. In this study, a user is considered as active if they performed any sort of action in a given product:
For SaaS product managers, having a DAU/MAU ratio of 9.4% or more puts you ahead of half of the products out there. If your DAU/MAU is above 28.7%, you are among the top 10%.
How To Grow Daily Active Users In 5 Steps
1. Automated tracking and reporting with June
Calculating your DAU manually is probably not a great use of your time. You can use software like Segment to automatically collect this information and obtain daily reports by connecting your Segment account to June:
When you learn to track your DAU, you actually start to understand it and give yourself the ability to control it by devising a growth strategy.
2. More communication
Over-communicating makes sure users get your value proposition and how it relates to their problems, so that they keep interacting with your products. 4 fixes to better communicate your value prop:
- Develop an onboarding strategy
Having an onboarding process is the first step toward activation and building engaging habits within your product.
- Pay attention to your copy
Adding tooltips, contextual messages, and chat widgets, as well as improving the quality of your UX copy are great ways to deliver value to your users.
- Take users out for a feature tour
A feature tour introduces new or under-used features so that customers can quickly pick them up.
- Define email triggers
Action and inaction tell a lot about who uses your app and how to help them. Sometimes, people only need an email reminder to remember you.
- Collect feedback
Communication goes both ways: if you actively ask the opinion of your customers to improve their experience, they are more likely to feel valued.
3. Retention analysis
Retention analysis tells you how and why users leave your product. It allows you to control your retention rate and your marketing return-on-investment.
A retention report helps you follow the evolution of your product strategy and see at which stage of the user journey people stop being active. Here is one from June:
Once you find out when people leave, you can also learn why they leave. You can then implement A/B tests or outboarding procedures to receive detailed feedback on how to keep them active.
4.Power user analysis
To increase your DAU, you must understand who your power users are. If you can identify traits shared by your power users-referring source, demographics, or feature adoption for example you can attract more people like them.
Power users are great for business because they are more likely to be upsold and refer you to their friends: the probability of selling to an existing customer is between 60% and 70%.
Take a look at the June power user curve above. If we consider people using your product more than 3 days a week as power users, about 25% of our user base is worth studying further. You can then find out who they are and how you can attract more people like them using email forms or special offers.
5. Feature analysis
As we previously mentioned, finding out your DAU count per feature is more meaningful than your total DAU: it indicates where usage happens. You can then remove the features people do not care about and spend more time improving those people do care about.
Take the following June report for example:
Each bar corresponds to a feature, and from there we can conclude our definition of an active user should incorporate Slack users. This is vital information, as we now know we should advertise our product to similar people using Slack, in Slack’s app store for example.
Try June for automated DAU reports, and more
June can save you hours of work on a weekly basis by providing you with ready-made templates for DAU reports. Try it here, it’s free. It takes a few clicks to connect your Segment account, and you’re good to go!
