What startups should know about DAUs and MAUs?
We have witnessed a surge in the number of startups during the COVID-19 outbreak, which has only increased post then. Most of these startups have prioritized Apps and Web portals for achieving their goals. As these startups move towards a round of funding, certain factors like MAUs, DAUs, Financials, and User acquisitions will play a key role in determining their success.
This blog is not a guide to fundraising but rather a look at two significant factors that influence the success of a startup. Power users, generally known as MAUs, WAUs, and DAUs, are categorized under the umbrella of repeat users and play a vital role in the app. Most of our clients at Upshot.ai have faced this issue before, and we have worked around figuring out the best strategies for increasing their MAUs and DAUs. We use a range of features like Gamification, Surveys, Feedback, and analysis engines to figure out the leaks in the app and provide solutions to fix them. Hence, this blog will focus on the key strategies any startup founder or marketer should know before approaching a slump in their product journey.
A major part of your app engagement problem can be analyzed by figuring out app stickiness metrics like MAUs and DAUs.
What are DAUs?
In-App marketing, active users are individuals who have used your app for a given period. During this time, users are calculated uniquely and categorized under segments like DAUs and MAUs. From a business perspective, it is important to know how and when your app is being used by your customers, and these insights will help you understand and improve your app development.
DAUs are defined as Daily Active Users and are an indication of how many people are logging on to the platform and using it on a daily basis and is a measure of growth as many early-stage startups might not have a lot of sales revenue yet, but investors will also give priority to daily active users and understand by what percent the app stickiness is growing, which might provide a way to monetize from the app ultimately.
Some tips to increase DAUs are:
Timing: Your application should message users when they are most likely to engage. With Upshot.ai, you could send push notifications, in-app messages, or WhatsApp at the right time, and you could understand all this with the analytics and understand when your users are most likely to engage with your app and message them at those times. This way, you are making sure you are creating a habit-forming behavior and moving towards better retentions and generating more revenues, or you could find other ways to engage throughout the day.
Get Specific: If your app follows the classic case of sending messages like “Hey, you left something in your cart, come back and check it out” is appropriate, we think there are better ways to communicate with these audiences and make sure they come back, like listing the name of the product they were browsing for. This creates better conversions any day. More descriptive messages are more likely to get people to return to your app. Just make sure the message you will be using is appropriate for your users.
Pro tip: For eCommerce companies, pair your communication with discounts.
What are MAUs?
Similar to DAUs, MAUs are active users for a 30-day period. MAUs are calculated in accordance with every user who performs any action in the app during a 30-day period. It does not matter how many times the user has logged in to the app, and it will be calculated as one unique visitor in a month.
MAUs are an important metric as it is easy to calculate and compare, but it has often held criticism as they might not be the right metric for all startups. For early startups, MAUs cannot be ascertained and declared as a primary metric for growth as certain factors like PR and other forms of promotions could highly inflate MAUs. Once the app has been explored, it could have a decreasing trend among its users. This is one of the reasons why smart investors are careful around MAUs.
What is DAU/MAU Ratio?
The Daily Active Users to Monthly Active Users ratio gauges the stickiness of the product. DAU is the number of unique users who engage with your product in a day. MAU is the number of individual users who engage with your product over a 30-day period.
The ratio of DAU to MAU is the proportion of monthly active users who engage with your product in a day.
This metric will help understand how valuable your product is to your users by calculating how often they return to your app. This percentage can also aid you in predicting traction and revenue over time.
Why are DAUs/MAUs important?
App downloads have become a vanity metric in the app space. Many app developers boast about the number of downloads their app has gotten, but it doesn’t reflect the app’s success.
An app with 10,000 downloads and 1,000 active users can be considered to be more successful than an app with 100,000 downloads and 100 active users.
Tracking DAUs and MAUs shift the mindset to user retention.