Slack is a great example of a company that keeps a very close eye on its DAU. Now, this can be different depending on the functionality of the platform and the access that is granted to users. They both separately allow a window for the product team to look into and measure how fast the platform is attracting new users and keep them coming back. Within DAU, there are new users and returning users - together, they equal the total DAU. Daily active users formula: + = total DAU So how do we calculate daily active users?ĭaily active users are calculated using the total number of unique users on a given day. These actions need to be consistent in order to measure your data correctly. For an email marketing platform, it may be the act of creating an email, for a business insights platform it may be pulling a report and creating a visualization, and for a social media platform, it might be creating or liking a post. Different platforms have different purposes. Most SaaS companies will call a user a unique visitor who has logged into the platform (whether desktop or mobile app). But you also need to define what a user is. You'll have to define your very own set of credentials that qualify as an active user before you calculate DAU. Simple formula to calculate daily active users Not only will a higher current DAU value increase the chances of securing funding, but being able to show a rise in DAU over time is also great for illustrating growth potential. Investors want to be able to see how healthy your business is before they decide to give you money. Attract investment opportunitiesĪs a generally accepted measure of SaaS business health, daily active user counts are also a big part of attracting investment opportunities. This metric then becomes an integral part of business operations by allowing the business to price appropriately for differently sized companies. Often, SaaS companies will also charge based on active users. Additionally, it can tell you which aspects of your product are most popular among different demographics, aiding the marketing department in reaching those customers. Identifying and fixing these issues can help reduce your churn rate. Monitoring DAU can help reveal hurdles, drop-off points, and features in your product that may be unnecessary or overly complicated. This metric can also uncover areas for improvement and help you spot when and where churn is about to happen. Deeper dives into which features and areas of your product customers are engaging with also provide more significant insights. If your product is meant to be used regularly, then checking to see how many of your customers do so can clue you in as to whether it is being used as intended. The same is true of monthly active users and weekly active users. Uncover product useĭaily active users is also the first step in seeing exactly how customers are engaging with your product. Its level of engagement on a daily basis is a test of how well it's performing the job customers expect from it. The launch of a product is the first time it gets widespread use among a diverse range of customers. Perform product health checkĭAU functions as a product health check because it lets you know if customers are actually using your product. The metric can help you increase profits and grow your company in other ways as well. In addition to being a general product health check, your level of engagement can provide you with some direction on how to do that. And you can increase your number of active users by improving the product. User engagement can tell you a lot about your product. In actuality, DAU is far from a vanity metric.
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