That’s a good question and usage metrics can be quite confusing sometimes. The answer is: No it’s not, but it’s also a common indicator called Stickiness. Used alongside with the Retention Rate (also commonly called Retention), it can be a very powerful KPI to assess your product-market fit. Before defining what Stickiness is and how to use it, let’s agree on the definition of Retention Rate, DAU and MAU:
We recently answered to this question on Quora and we thought it was worth sharing it with you too.
Retention is the percentage of users who use your app after they first signed in. Generally, we distinguish between D1, D7 and D30 retention as they are the most commonly used. D1 means Day 1 retention, so the number people users who come back to your app after the first day of usage. D7 and D30 mean that they are coming back after a week and a month. The following graph illustrates this well:
A curve like the blue one shows a weighted average of all Nth day retention values for all user cohorts in a certain time period.
For more about retention, read here or pre-register for the upcoming Retention E-book.
Daily Active Users (DAU)
The number of Daily Active Users is the number of unique users considered as being active in a given day. To define who is “active”, you first have to settle on what the core action is that you measure against. In other words, what qualifies a user as active? Is it opening the app? Is it visiting the website? Is it creating a new project? Is it adding a new contact?
Technically, in order to count DAU, you will count the number of distinct User IDs who completed a predefined action (say, opened the app) at least once on a given day.
Then, keeping an eye on Average DAU over time gives a good indicator of how engaging is your app to your users, disregarding whether they are new or returning users.
Monthly Active Users (MAU)
MAU has the same definition as DAU, but on a different timeframe: a month instead of a day. Simply put, MAU is the number of unique users considered as being active in a given month.
Depending on what your app does, a monthly time frame can be a better indicator than a daily one. If you run a period tracker app like Clue, you will expect users to be active once a month and therefore will rather focus on MAU than DAU.
Stickiness is the ratio between DAU and MAU. It literally shows how “sticky” is your user base. The real calculation is:
S(m1) = Average(DAU)(m1) / MAU(m1)
Where m1 = Month 1 and S = Stickiness
So, the closer to 100%, the more frequently are your users coming back on a daily basis. It is a very powerful indicator especially for mobile games, and has thus a direct impact on your retention curve.
I hope I answered to your question. And if you would like to know more about how to increase your retention, what’s a product market-fit and other usage related topics, we teamed up with Gabor Papp, Growth Marketer at Shapr3d, who is expert in this topic (among others). We plan to publish a 3-chapter e-book about retention in the coming weeks. But you can already read the first chapter here.