Understand how sticky your product is
Calculate the proportion of monthly active users who engage with your product on a daily basis
Segment your customers: look at your DAU / MAU for paying customers vs non-paying customers
DAU / MAU and DAU / WAU can be very helpful ratios to look at for SaaS or consumer companies.
Let's define terms:
- DAU: Daily Active User
- WAU: Weekly Active User
- MAU: Monthly Active User
- Active User: this could depend on your business and you could customize your definition, but generally, it means the user logged in.
Looking at the DAU / MAU basically gives you an indication of the frequency of usage for a typical Monthly Active User. Do they use your product every day? Once every two days? Once a week?
For Saas, there are some subtleties you should take into account (well described in this article from David Sacks)
- You probably want to exclude weekend days from your DAU / WAU calculations (ie consider the week is 5 days long instead of 7 days long)
- As described in this other template, it's often helpful to look at segment rather than at the average metric for all users.
- Here, it can be particularly helpful to look at these ratios for paying customers only, and for your top 10 customers or top 100 customers.
- Don't look at an average over three months, rather, look at the data per day / per week over a longer period.