Ryan Lucht
May 8, 2024
Before joining Eppo, Ryan spent 6 years in the experimentation space consulting for companies like Clorox, Braintree, Yami, and DoorDash.
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What are Daily Active Users (DAUs) Exactly?
Understand what Daily Active Users (DAUs) are, why they matter for your SaaS, and how to track them effectively.
Ever wondered what it means when a user is “active”? While this may seem more obvious in social media apps like Instagram or LinkedIn — where activity equals time spent on the app — this may change from SaaS to SaaS.
However, a more interesting question to ask would be:
What’s the real business impact of having a high number of Daily Active Users?
In today’s article, we’ll explain why Daily Active Users are an important metric to track and how they’re crucial for experimentation purposes.
We’ll go over:
What are Daily Active Users?
Why does this metric matter?
Why should you track them?
How to increase Daily Active Users
Pitfalls to avoid when tracking Daily Active Users
Let’s get started.
What are Daily Active Users?
Daily Active Users (DAUs) are a key metric for understanding how often people engage with your product or service.
In simple terms, DAUs are the number of unique individuals who interact with your digital offering within a 24 hour period.
This metric is especially important for subscription-based SaaS and apps.
Why DAU matters
Tracking Daily Active Users gives you valuable insights into several aspects of your business:
Product health: If your DAUs start dipping, it could be a sign that users are losing interest or finding your offering less valuable. Conversely, a growing DAU points to success and increasing "stickiness” — a concept we’ll explore in the following sections.
Trends and patterns: Analyzing DAUs over time reveals patterns in user behavior. You might see that usage is higher on certain days of the week, or notice how your latest updates impacted engagement.
Growth potential: A strong DAU number is often a good indicator of your product's ability to attract and retain users.
How to track DAUs
While the basic DAU concept is quite clear, there's an important nuance to how companies define "active."
Here's how to get started:
Define "active": What actions truly mean a user is getting value from your product? It might be:
Simply logging into your app or website.
Completing a core task within your SaaS (For instance, giving a post a like on a social media app).
Using specific features within your SaaS that you’ve deemed important to track because it’s a sign of the user getting value.
Choose the right tools: Most analytics platforms (like Google Analytics) automatically calculate DAU, but only data warehouse-native experimentation platforms can offer discrepancy-free insights. You want to make sure your "active" definition is programmed correctly.
Get granular: For a deeper understanding, go beyond the top-level DAU number. Segment users by:
How they were acquired (ads, organic search, etc.) to see what works best.
Demographics (age, job role, etc.) to fine-tune your messaging.
Revenue spent, to see if the highest-paying customers tend to be the most active, or if there are segments with high DAU but low revenue (a possible upsell opportunity).
Customer support load to see if DAU is correlated with a high support ticket volume, signaling there might be friction points you weren’t aware of.
Their actions within your SaaS to find which features are truly popular.
Remember: DAU is just one metric. Look at it alongside other key business metrics like revenue, profit margins, and retention, to get a fuller picture of how your SaaS is doing.
Why should you track DAUs?
Tracking DAUs is a good way of putting a lens over your SaaS’s relevance. It’s a metric that can reveal key information about your business strategy. Some more reasons why it demands your attention:
Uncover the "why" behind user behavior: Is your product's appeal fading, leading to fewer returning users? Did that new feature improve things, or make them worse? Your DAU trend line, paired with other data, can help you answer these questions.
Make decisions based on data you trust: Which features should you prioritize? Where should you invest your development resources? Tracking your SaaS feature engagement alongside your DAU lets you focus on what truly drives user value.
Boost customer lifetime value (LTV): Engaged users are more likely to stick around, upgrade, and even become advocates. Your DAU number is a critical piece in understanding and increasing long-term customer value.
Spot friction points you didn’t know about: Is your onboarding clunky? Are valuable features buried in your interface? Drops in your DAUs can hint at where users are struggling, letting you work on improving the user experience right away.
Validate your assumptions: You launched your product with a clear idea of the problem it solves. Strong DAU numbers prove your hunch was right, while a lagging DAU means it's time to reexamine who your ideal user truly is.
Product stickiness or the DAU/MAU ratio
Your DAU metric is also key to understanding your product's "stickiness" — its ability to become a habit for users. The DAU/MAU ratio tells you just that:
DAU/MAU Ratio = (Daily Active Users / Monthly Active Users) x 100
For example, if you have 5,000 daily users and 20,000 monthly users, your ratio is 25%. This means a quarter of your total monthly users come back every single day. The higher that percentage, the stickier your product.
For more on product stickiness, read our primer on the subject.
How to increase DAUs
Boosting the number of Daily Active Users is about giving users a consistently good experience that keeps them coming back. Here's a breakdown of some effective strategies:
Make onboarding as easy as possible: Don't scare off those eager new users with a clunky registration process. Ask for the bare minimum information to get them started, and let them explore right away.
Guide users to value, fast: Help people get to your product's "Aha!" moment as quickly as possible. This could be through:some text
A short, interactive tutorial that shows off the basics
Personalized recommendations based on their initial signup information
Highlighting the core feature that solves their key problem every chance you get
Keep features discoverable: Don't expect users to remember that handy feature you built months ago. Use in-app tips, contextual onboarding, and announcements to highlight less obvious, but valuable capabilities.
Timing is everything: Nudging users back with reminders or showcasing new content can be helpful. But the wrong timing creates annoyance. Track when users tend to be active and personalize your communication schedule.
Listen and respond: Regularly collect user feedback. This includes:some text
In-app surveys to pinpoint what is and isn't working
Monitoring mentions of your product on social media
Analyzing customer support tickets for common issues
Focus on retention first: A high DAU means little if users churn out as fast as they come in. Prioritize features and improvements that address the core needs of your existing, dedicated users. Long-term happy customers are the key to sustainable growth.
Extra tips:
Target the right users: Mass acquisition is less valuable than attracting people who truly need what you offer. Refine your marketing messaging to focus on your ideal customer.
Gamification can help: Adding progress badges, rewards, and friendly competition elements can encourage continued use. But use it thoughtfully as it's not a substitute for a fundamentally useful product, and adding these may not always make sense for your SaaS. .
Mistakes to avoid when tracking DAUs
DAUs seem straightforward, but some traps can lead to misleading data. Avoid these common pitfalls to make sure your DAU analysis is truly helpful:
Counting every visit as a DAU
DAU is about unique users. If someone's already counted for the day, additional logins or page refreshes shouldn't inflate your numbers.
Solution: Most analytics tools handle this automatically by tracking unique user IDs, but ensure yours is configured correctly.
Double-counting users across devices
With people using laptops, smartphones, and tablets, one user might appear as multiple people in your DAU.
Solution: Advanced tracking methods attempt to connect multiple devices to a single user ID. If available for your analytics setup, implement these. Otherwise, be aware of this limitation when viewing your trends.
Comparing DAUs to competitors
Each company defines "active" differently. Facebook and your SaaS tool may have vastly different use cases, making comparisons pointless.
Solution: Focus on your own growth trends (such as revenue, gross margins, and retention), not comparing absolute numbers to others.
Fixating on DAU alone
A spike in DAU is great, but why did it happen? Was it from a press mention that will fade away, or a feature update users truly love? DAU should be combined with other metrics to grasp the full picture.
Solution: Pair DAU tracking with engagement analysis (which features are most used) and qualitative feedback for context.
Next steps
Now you understand the importance of Daily Active Users (DAUs) for SaaS growth. But knowing your DAU number is just the beginning.
Now the question is:
How can you track and experiment with this metric in a way that impacts your bottom line?
That’s when you should consider Eppo.
Eppo is a powerful experimentation and feature management platform designed to help SaaS companies understand the drivers behind their DAUs and other key business metrics.
With Eppo, you can:
Uncover core engagement drivers: Track interactions that make your product truly valuable to users. Identify what features drive consistent usage patterns and spot any potential areas for friction.
Map the paths to loyalty: Visualize how your most engaged users flow through your product. This highlights the key features and pathways that make them come back.
Analyze DAU by user segment: Slice and dice your DAU data by demographics, acquisition source, and feature preferences. Learn which specific user types are your most loyal and how to tailor the experience to their needs.
Experiment for DAU impact: Directly within Eppo, A/B test different features, onboarding flows, or UI changes. Track their impact on DAU with statistical rigor, so your decisions are always data-driven.
The Eppo difference: Eppo's unique warehouse-native approach (accurate data that comes directly from your internal source of truth) and robust experimentation tools allow you to boost DAUs through controlled experimentation and continuous feature optimization.
Ready to boost your DAUs through rigorous experimentation?
Understand what Daily Active Users (DAUs) are, why they matter for your SaaS, and how to track them effectively.
