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When we’re in the subscription company, one of the most important metrics to track is daily active users. When our DAU is high, it might be a good indicator. It demonstrates that our customers are utilizing our product, and additional consumers are joining. If the number of our daily active users begins to decline, we may be on the approach of churn.
DAU is a statistic that represents the total number of people that log in and interact with your product on a daily basis. An “active user” is a single person who has logged in. Tracking daily active users can offer information about how many people use and value your products or services.
Some may argue that “active users” is a vanity statistic, however practically all SaaS businesses use it to gauge overall success, along with comparable measures such as weekly active users (WAU) and monthly active users (MAU) (MAU).
Because just logging onto the platform is not a defined activity, companies frequently depend on more specified value-based actions, such as completing a task or producing a report, as correct DAU.
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To begin with, gauging DAU is a product health check. It’s asking, “Are our consumers truly using our product?” During the R&D and planning stages of developing a product, we don’t really invite outside people to come in and test it to determine if it works for an average person. Our aim is that once the product is up and running and our team is satisfied with that iteration, users will not only purchase the product but also utilize it on a regular basis.
What’s crucial to remember is that we track daily active users to better understand how our consumers utilize our product. We may have a concept of what we believe someone should do, but in actuality, it’s not until we measure and analyze data that we’ll uncover how our product is being used.
SaaS companies of all sizes must understand this statistic in order to identify areas for improvement and predict when and where churn will occur. This will show obstacles, drop-off spots, and features in your product that may be unnecessary or overly complicated. Marketers utilize it to correctly structure future marketing around the most popular parts of your product among various groups.
Other SaaS providers will charge depending on active users as well. So, not only do they utilize this measure to identify whether or not the product is actively being used, but it also allows them to charge correctly for different sized businesses.
Every SaaS company’s objective is to create a valued product that delivers a solution, resulting in a strong, long-term user base.
The word “active user” is quite wide. Before we can compute DAU, we must first specify our own set of credentials that qualify as an active user. However, we must also define what a user is. Most SaaS firms will term a user a unique visitor who has signed onto the platform (whether desktop or mobile app). Distinct platforms provide different functions. It might be the act of producing an email for an email marketing platform, retrieving a report and making a visualization for a business insights platform, or posting or like a post for a social networking platform. These steps must be constant in order to accurately measure our data.
So, how do we compute daily active users?
The total number of unique users on a particular day is used to compute daily active users.
Within DAU, there are new and returning users, who add up to the overall DAU. They both provide a window for the product team to examine and assess how quickly the platform attracts new users and keeps them coming back. This might vary based on the platform’s functionality and the level of access offered to users. Slack is an excellent example of a firm that pays special attention to their DAU.
There is no technical formula for DAU, since numerous analytics solutions like ProfitWell Metrics and Google Analytics can simply show us our daily active users. If all we have is monthly traffic/usage statistics, we may divide the total number of unique visitors (users) by the number of days in the month. For example, if we have 2,600 unique monthly sessions in April, split that number by 30 (monthly days) and we have around 87 active users.
There is no such thing as a typical high or low DAU, but we may create benchmarks based on prior performance: if our firm routinely has 200 DAU then one day it skyrockets to 270, we’re clearly on the right track. It indicates that our product has gained “stickiness” and has become a necessity. “Stickiness” refers to a product being such a vital, everyday tool for an organization that it is impossible to execute daily tasks without it.
If our DAU is diminishing each day, we’re going to run into churn. It’s a troubling indicator when we start to realize that fewer users are logging in, and/or not executing actions inside the platform. The most effective method to tackle this is to prevent it from happening in the first place, which begins with communication between us and the consumer. Consistent communication eliminates the possibility of surprises. Understanding what the platform is primarily used for, where they are experiencing difficulties, and offering to assist proactively will result in less churn.
The ultimate aim is to grow everyday active users and guarantee that your product is an essential tool for that organization. There are a few things you can do to increase DAU. Here are a few examples:
Increase the effectiveness of our customer success activities
As previously said, being a proactive customer success team as opposed to a reactive customer success team will assist minimize attrition and boost DAU. Consistent communication and empathizing with our customers will assist us comprehend their final objective, allowing you to maximize their platform experience. Usership will rise if we provide the correct assistance to our customers.
Increase retention efforts
MRR, which is a direct result of retention, is a sure sign of a successful SaaS company. The initial stage is to get a customer, however offering value and a helpful service will result in the consumer renewing for another year. So, in order to assist grow our daily active users, we must first determine what actions and attributes lead to retention (which requires completing retention analysis) and then base our concept of an active user on them. Retention will occur if we constantly improve the entire consumer experience.
Assume we just published our communal music-playing software in the App Store a few days ago. Growth is gradual and steady until a handful of tech bloggers discover our software and start gushing about how fantastic it is—then we’re suddenly receiving thousands of downloads per hour.
Then one morning we get an email from Apple saying they’re going to highlight us in the App Store! Things couldn’t be going any better.
To determine how quickly our app is expanding, we decided to count the number of daily active users. Our definition of “active” is our measurement of user activity on any given day for anybody who has signed in. The resulting graph may look like this:
Not always, of course. We just debuted, received a publicity boost, and were highlighted. If all a user has to do is download and open our app once, our “active users” are bound to grow as registrations grow—people are curious, and downloading an app is a low-friction transaction with no commitment.
The risk of defining our “active user” base on a statistic as simple as logins is that we’re only seeing a mirror of publicity and enthusiasm. It does not track actual app usage.
While our DAU is increasing, the amount of individuals listening to songs is not. People are downloading and logging in to our programme, but the majority of them aren’t utilizing it properly.If we simply pay attention to your DAU, we’ll miss the fact that genuine usage is declining—we won’t hear our app’s canary in the coal mine.
In the near term, this appears to be a good thing—new user registration is hiding lost users due to a lack of engagement. However, cycling over consumers is not a long-term sustainable technique, and we will face a sharp correction over time.
We have developed a guide which gives you an all around view of customer loyalty
While our DAU may rise swiftly at first due to external reasons, our app’s growth will eventually become dependent on its actual usage. Media attention does not result in retention; stickiness is required.
Candy Crush, Instagram, and WhatsApp are all about stickiness. When our app becomes a part of our users’ life and is accessed more than once a day, we know it’s incredibly sticky. That is not a result obtained only through smart marketing: it is obtained via the development of features that our consumers simply cannot live without.