Ever wanted to know how many users are interacting with your app on a daily and monthly basis? Daily Active Users (DAU) and Monthly Active Users (MAU) are two important metrics used to measure the level of engagement and interaction with your app.

When paired together to calculate your DAU/MAU ratio, these metrics help evaluate the stickiness of your app, how much value your app provides users, and whether you’re able to consistently retain user engagement.

Daily Active Users (DAU) is a metric used to measure the number of users who are active on a website or app each day (usually every 24 hours). DAU measures individual active users and not sessions, so if a particular user interacts with your app 10 times a day, their DAU would still be one.

Various businesses use DAU to measure their success, where a higher DAU means a high number of users are interacting with an app daily, making the app ‘sticky.’

To calculate DAU, you first need to figure out what you classify as an active user. For example, most businesses would define an active user as one who logs into an app, while other businesses like mobile banking apps, might classify an active user as someone who makes a transfer.

Monthly Active Users (MAU) measures the number of unique users interacting with an app over a 30-day period. Much like a higher DAU indicates success, MAU points to an app’s ability to not only attract users but retain them too.

Again, defining what classifies as active users is important when calculating MAU and should be the same classification you use for DAU.

The DAU/MAU Ratio is a metric used to track user engagement and represents the portion of a business’s MAU that interact with its app on a daily basis.

The higher the DAU/MAU Ratio, the stickier an app is, and demonstrates that users are returning to the app over and over again.

Let’s say your app has 50,000 MAUs which are defined by unique users who log in to your app and you’ve got 15,000 DAUs your

DAU/MAU Ratio would be 15,000 / 50,000 = 30%

Generally speaking, the higher your DAU/MAU Ratio, the greater engagement and interaction you’re getting among users. And, while the average DAU/MAU ratio differs between industries and products, for SaaS B2B and B2C apps, the average ratio is 13%.

As standalone metrics, DAU and MAU can only tell you how many users are interacting with your app each day or month.  But, you can extract more value from these metrics by comparing them over different time periods, and even comparing them against each other.

Ideally, you want to see your DAU and MAU numbers increase. By tracking the growth of your user base over different time periods, you can assess whether or not your customer base is growing.

When paired together the DAU/MAU Ratio is a helpful metric for understanding the value your app is providing users.

The ratio is also useful in identifying churn rates and user retention. If your DAUs are far off from your MAUs, then there’s a big chance that users aren’t consistently interacting with your app and your churn rates are pretty high.

The DAU/MAU ratio gives businesses an opportunity to understand how engaged users are with your app. A low ratio provides opportunities for businesses to evaluate your product, whether your app is lacking in value or delivering a poor user experience.

While the DAU/MAU ratio can provide some valuable insights, it isn’t short of its limitations. The main drawback is that you aren’t able to see which users are churning and which ones are being retained, making it hard to implement specific customer retention strategies.

Plus, it doesn’t actually indicate how users are interacting with your app or what features they’re using which makes it difficult to understand which areas your app needs improvement and what pain points users are experiencing.

The good news is that where the DAU/MAU Ratio falls short, a Cohort Analysis is often used to develop a deeper understanding of retention and growth and segment users based on defined characteristics.

Ultimately, the DAU/MAU ratio is a useful SaaS metric that tracks user engagement with your app and the level of value your app provides users. Having an understanding of the DAU/MAU ratio helps businesses understand retention and churn and subsequently develop strategies to improve consistent user engagement.