Daily Active Users (DAU)

DAU's utility is vast, proving an extremely important metric for SaaS-based business models.

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SaaS KPI Example - Daily Active Users (DAU) Metric

Daily active users (DAU) interact with your website or software. More specifically, it's the daily measurement of users that take action on a website or application. You might wonder why this is helpful or what this means for you as a website owner or developer.

DAU's utility is vast, proving an extremely important metric for SaaS-based business models. Furthermore, since your DAU helps monitor your user's activities, it becomes a useful metric for optimizing your application for performance and building retention techniques for your website.

Even if you don't have a SaaS-based business model or a software application, DAU provides enough information for eCommerce business owners to see how shoppers interact with their online store. If this piques your interest keep reading, there's plenty to cover on DAU. 

How Do You Identify Daily Active Users?

Sites have multiple methods of identifying their daily active users. The first of these methods is the use of cookies. Cookies help retain information about visitors. Cookies make it easy for users to find your website again and provide data to calculate your DAU. 

Users are typically assigned a user ID if they use an application on their mobile devices. This user ID does plenty in calculating your DAU and understanding how your users use your application. 

How Do You Calculate Daily Active Users?

Funny enough, plenty of companies calculate their DAU differently. Because of this, there is no right or wrong way to calculate this metric. Instead, you'll calculate your DAU depending on the type of website or business you have.

Normally, your daily calculation will consist of unique new and returning users. For example, some may focus on monthly or weekly active users. Therefore, they'll adjust their DAU calculations to compensate for the days they want to include in their metric. 

Here's how you calculate your DAU: Unique New Users + Unique Returning Users = DAU. Of course, you can use other more complex measurements and data from your daily active users, such as your DAU growth rate. 

Your DAU growth rate gives you a general estimate of how much growth your website or software has seen in the past few days. In addition, the DAU growth rate helps measure the performance of certain features, products, or content on your site. 

What's The Purpose of Knowing Your Daily Active Users?

The purpose of knowing your DAU is to help adjust and optimize your website and software for a better user experience. If your DAU is low, it typically indicates that users have no interest in your website or don't want to use it for some unknown reason. 

On the other hand, if your DAU is high, you know what you're doing on your website is working, and you should keep pushing those efforts forward. Of course, your goal is to keep improving regardless of how high or low your DAU is, but understanding it gives you a place to start.

Figuring out the why is the most important part of knowing your DAU. While it sounds simple, it's still pretty complex. Ask yourself this, why is the daily active user count this low or high? That question may have multiple answers or, sometimes, no answer. 

Benefits of Knowing Your Daily Active Users

Now that you understand the purpose of your DAU, it's good to understand the general benefits you get from using the metric. However, some of the benefits you get from understanding your DAU may be subtle, like letting you know people like interacting with your site or not. 

Your DAU is more than knowing whether people like your website or software. It's about how you can capitalize on that knowledge. From this fact, the website owner can determine product use and improve how customers can use their product or service. 

Businesses will take different actions depending on their daily active users. For example, a SaaS business will focus on improving its core features or adding additional features that users may want to improve their DAU. 

Online stores may work on better drip email marketing campaigns, on-site notifications, and pricing. But remember, the main benefit is understanding whether your DAU is low or high and how to increase engagement.

Is Daily Active Users a Reliable Metric?

Some claim that DAU is the most important SaaS metric, while others say it's overblown. The truth is that depending on your industry and market, your view on how valuable DAU is will change. For example, SaaS businesses focus on DAU and their DAU growth rate almost exclusively when implementing features to their services. 

Bloggers and eCommerce stores typically value their DAU just as much as SaaS businesses. Still, niche websites and online stores don't care about it too much. Regardless, if you have an online store, you'll need to understand your DAU, which makes it a reliable metric. 

Misconceptions About Daily Active Users

The importance of your DAU isn't misplaced, but it's important to understand that daily activity doesn't equate to return. When people talk about DAU and DAU growth rates, people are speaking in general terms. 

Your DAU doesn't take human trends and patterns into account. For example, a high DAU indicates traffic and site activity. Still, it doesn't mean you have a conversion or retention rate. Like the times and day, people shop. 

You may have a DAU on weekdays but make most of your sales on the weekend. As a result, your MAU and DAU will typically be lower than the industry standard. However, you're still making a healthy profit in your market. 

This is to say that DAU may be an important and popular metric, but it's not the only metric, and you shouldn't treat it as the only important metric. Yes, it's reliable and useful, but it becomes more useful when paired with other KPIs. 

Tips To Improve Daily Active Users

Consider what you can offer your consumers to increase your daily active user count. You want to play on your strengths and improve where you can while adding new tactics to your operation. Here are some tips that may help you improve your DAU. 

Focus On Retention

Customer retention is huge, especially if you're a SaaS business. Most of your income will come from loyal and returning customers. So to improve your daily active users, try focusing on retention techniques. 

Some basic retention techniques include improving notifications for your website and making good use of email marketing campaigns. Getting your customer's attention is the main goal of retention, so think about how you can grab their attention and be creative. 

For example, push notifications have become an extremely popular method and standard practice for applications today. In addition, social media apps such as Twitter, Instagram, and Snapchat optimize their push notifications and tailor them to each user.

For eCommerce, nothing is better for retention than optimizing your digital marketing campaign. Drip marketing campaigns have a similar strategy to push notifications. In addition, a drip campaign aims to increase customer engagement with your product or content. 

Through automation, businesses will send emails and notifications to consumers relevant to their interests. These tactics are successful because they subtly nudge the consumer to remind them that your product or service is still relevant and useful to them. 

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Improve Stability

Whether it's your website or application, stability is essential to maintaining a good standing with your users. Likewise, speed and responsiveness are essential to any website experience. If your website is frustrating for your users to navigate, you'll notice a heavy drop in your DAU.  

For an eCommerce business, it's especially important because consumers have plenty of online shopping options. You want to be their first and only choice to buy, so you must make the shopping experience smooth and painless. 

When optimizing your eCommerce website for stability, you should focus on loading speed, visual stability, and interactivity. Each of these improves the overall customer experience when using their store and helps provide an efficient and visually pleasing experience. 

Create Community Forums

While not for every website or business, creating a community forum page is another practical and useful way to improve your DAU. Community forums provide many benefits to website owners regarding marketing and support. 

Additionally, having a community forum increases brand loyalty if done correctly. The only downside of community forums is that they may take moderation efforts from admins and the website owner. Regardless, it's still beneficial for improving your DAU. 

Open discussions about products, services, and new features help build hype and excitement between the business and the consumer. If your website can benefit from a community forum, try implementing one and watch your DAU to see if it's making an impact. 

Frequently Asked Questions

Here are some answers to questions you may still have about your daily active users. 

What is considered a daily active user?

It can be vague sometimes, but generally speaking, any interaction from a unique visitor counts as a daily active user. So you don't want to measure people who visit your website but don't interact, do anything, or do one thing and never return to the site.

How many daily active users should you have?

It depends, but according to expert Andrew Chen, people consider apps with 20% daily active users to be good applications. On the other hand, applications and websites with around 50% daily active users are known to be phenomenal.

What's the difference between MAU and DAU?

While it may not seem different, there are unique reasons and differences in using your MAU or DAU. Monthly active users cover a wider period than daily active users. It takes the entire month of active users into account rather than a single day. 

Is it better to have a higher or lower DAU or MAU?

Generally speaking, having a higher DAU and MAU is better. However, remember that this metric alone will not paint the full picture of user engagement. When you pair it with other KPIs, you'll get a clearer picture of whether or not your higher value is good or bad.

Will your DAU ever be higher than your MAU?

Your DAU will never be higher than your MAU because MAU takes every day within the month into account while your DAU only takes single days into account. You'll get a higher average with MAU every time over your DAU, which isn't bad or a hindrance. 

Is daily active users the most important metric for websites?

It depends, but typically DAU isn't the most important metric. However, it's still an extremely important metric for software developers and website owners. Furthermore, pairing your DAU with other KPIs becomes an even stronger and more valuable metric. 

Is DAU a retention or engagement metric? 

For SaaS products, DAU is both a retention and engagement metric. Its utility depends on what you need it for, but typically people use it as an engagement metric. The great part about calculating your DAU is that you can use it with other engagement KPIs. 

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Bottom Line

Understanding your daily active users will always be vital to your online store, website, or software application. Remember that your DAU becomes valuable when you take the time to learn why your DAU is high or low. Keep this metric in mind and become familiar with it.

Once you fully understand your DAU and your DAU growth rate, take the time to reflect on what you can improve on. You can always do something to improve your engagement, whether improving your website speed or adding an important new feature. Try something new. The results may surprise you.

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