Defining “Active User” And The DAU To MAU Ratio
Daily Active Users (DAU) to Monthly Active Users (MAU) ratio is a popular metric many consumer startups are being judged by. The ratio is used to find out how many of your active users are logging in on a daily basis. This metric is very important when determining how “sticky” your product is. In other words, it is a way to measure your product’s retention. The first I heard of this metric being used was to determine which Facebook games were going to become the next Farmville. The question is, does this metric really work for non-gaming apps and websites?
Is DAU To MAU Ratio An Unfair Metric?
The issue I had when this metric first became popular was when it started to be used to measure the success of all consumer apps and websites. At first it seemed unfair to use a metric used for casual gaming on many apps that, by nature, can’t possibly be used on a daily basis. For example a travel website or an app used for car buyers certainly shouldn’t be judged by this metric, right? People don’t book hotel reservations or make car purchases everyday so how can this metric be used for these types of services? These products’ users naturally only use the product at rare events compared to a messaging app or a Facebook game. It surely isn’t fair, right? Not true! I argue that this ratio is actually still very relevant to these types of services. The only difference is how these types of businesses define their “active” users in reference to this ratio.
User’s Attention Span
The real core to the DAU to MAU ratio is based in the fact that people forget. People live busy lives and are bombarded with thousands and thousands of products and services. When that special time comes up to purchase a car or to book a travel reservation, will they think of your product? Will they remember that this is that special time when they need to search for your app, launch it, remember their login information, and fiddle with your UI? If you aren’t top of mind, they won’t. Instead they’ll use a competing solution and you are out of luck.
Staying Top Of Mind
By keeping users “active” you are keeping your product top of mind. The traditional definition of “active” is when a user logs into your product. But in reality, being top of mind doesn’t require a user to have to log into your app everyday. There are other ways to do this. In the car purchase or travel examples, you’ll notice that both are the type of services you would expect to see constantly advertising on TV and radio. In most metropolitan areas, the local car dealers are constantly fighting for TV and radio spots. You hear their ads multiple times a day.
Defining Active
Car dealers use these advertisements to stay top of mind for that one moment a person decides to make a car purchase. Their “active” users are those who view or listen to their daily ads. They might not be logging in to an app or website everyday, but these people are still engaged with the service. They laugh at the salesy pitch lines or hum the commercial tunes. Whatever it takes, these people are actively keeping the service top of mind. If you could effectively measure the reach of these ads and define “active” as those people who are listening or viewing these ads, the DAU to MAU ratio would probably still hold up as an important metric.
Bringing This Back To Social Apps
My point in using the car dealership example is that your “Active” users might not just be those who log into your app. Your product should have a reach that keeps you top of mind on the days they aren’t logged into your product. At RunKeeper we were constantly aware of this. We initially defined our “active” user as someone who used our product to track a run, walk, or a cycling activity. The pure nature of health and fitness is one where people are sporadic with their fitness activities. While most apps worry about the number of clicks their users need to make, we were asking our users to get out and go for a run. Seriously! Think about that for a second. Suddenly the number of clicks on your app doesn’t seem like a point of user friction anymore does it? The challenge here was to get users to be more active but also to keep our product top of mind. We didn’t have the huge margins a car deal has to spend millions on ads so we needed to be creative.
Social Reminders And The Network Effects
A common solution to this problem is to highlight your friends usage on other social media platforms. If you aren’t running today, one of your friends might be. As your service grows, more and more of your user’s friends might be using the product on any given day. Use this as a means to stay top of mind. Posts to Facebook, push alerts, and other ways to remind your inactive users that your product can be used by their friends can help. Don’t be SPAMMY! These can’t be artificial, noisy posts, it needs to be a genuine share from your active users. This is tough but it can be done effectively and there are ways to measure this type of reach. I might not care about every run my friend goes on, but when he has a personal record, sets a new health goal, or finishes a race, I might actually enjoy those posts.
You can measure the effectiveness of these reminders too. Facebook Insights provides these types of stats and many email providers also give open rates and other types of ways to measure your marketing reach. If you can integrate this number into your definition of “active” for the DAU to MAU ratio will become more relevant.
Expanding The Scope Of Your Product
The other way to keep your users “active” is to expand the scope of your product. At RunKeeper we expanded the scope of our product to include more and more aspects of a user’s health that happened outside of the running activity. Researching training programs, monitoring their health trends with FitnessReports, FitnessAlerts, helping each other stay motivated with social encouragement via the FitnessFeed, and even an attempted means to allow users to share health and fitness content were used to keep users active. Long live the healthy button! I kid, it failed :) This can be a tricky area for a startup. You need to stay focused and not try to be too many things to your users, so tread carefully here. Each new feature you add may take away from your core offering, but if done right, you can create a much more robust and engaging experience around your core offering that keeps your users “active” each day.
Summary
The DAU to MAU ratio is a very powerful metric that every consumer company needs to track. Defining the “active” user is really the key to using it effectively. Logging in to your product is a great indicator of which users are engaged but it isn’t the only measure. Stay flexible with the definition of “active” and experiment with the scope of your product to really make the DAU to MAU ratio work for your product.
