When it comes to determining the health of your business, one key metric many organizations turn to is user engagement. At first glance, this metric might seem straightforward; however, it’s important to know exactly what you are measuring and some things to watch out for as you start to use user engagement as a key performance indicator (KPI) for your business.

1. mportant User Engagement KPIs:
What are DAU,
WAU, and MAU?

2. © 2018 Bernard Marr, Bernard Marr & Co. All rights reserved
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IntroductionIntroduction
When it comes to determining the health of your business, one key metric
many organizations turn to is user engagement. At first glance, this metric
might seem straightforward; however, it’s important to know exactly what you
are measuring and some things to watch out for as you start to use user
engagement as a key performance indicator (KPI) for your business.
Important User Engagement KPIs: What are
DAU, WAU, and MAU?

3. © 2018 Bernard Marr, Bernard Marr & Co. All rights reserved
Important User Engagement KPIs: What are DAU,
WAU, and MAU?
What is user engagement?
User engagement is a measurement of how much your customer interacts with a product or
service you offer. It’s a measurement of user behavior (frequency or depth of interaction) over
time. So, why is this important? When customers engage with your product, website, service,
or app, it shows they are finding it valuable and helps to confirm what you offer is helping
customers meet a need they have. If user engagement is healthy, it's a good indicator that
your business has something to offer customers that they want or need. Good engagement
will help build customer retention, which leads to increased referrals and revenue for your
organization.
Over time, your business can learn a lot from user engagement KPIs, including the success of
marketing campaigns and using these numbers to get to deeper business KPIs such as
customer retention rates.

4. © 2018 Bernard Marr, Bernard Marr & Co. All rights reserved
Important User Engagement KPIs: What are DAU,
WAU, and MAU?
Three User Engagement Metrics: DAU, WAU, MAU
It's very common for organizations to track daily active users (DAU), weekly active users
(WAU), and monthly active users (MAU). These metrics measure the number of users who
engage with your product or service over the specific time period indicated. Therefore, the
DAU is the number of unique users who did some action each day, the WAU measures the
unique users who completed an action each week and the MAU is the number of unique users
who completed an action within a month.
It’s important to determine what action the user must take in your business to be defined as
an “active” user because it’s not the same for every business. Is an active user one who logs
on? Or is it someone who takes a more specific action with your product such as reading an
article, submitting a query or comment, downloading a document, etc.

5. © 2018 Bernard Marr, Bernard Marr & Co. All rights reserved
Important User Engagement KPIs: What are DAU,
WAU, and MAU?
The DAU/MAU Ratio
One of the ways engagement metrics can give you a deeper look at the performance of your
business is when you compare daily active users with monthly active users to determine the
retention or “stickiness” of your customers. Knowing your retention rates helps to calculate
the lifetime value of customers as well.
When you look at the DAU/MAU ratio, popularized by platforms such as Facebook, you see
the number of monthly customers who interact with your product or service in a single-day
window. The equation is:
The number of daily active users divided by the number of monthly active users = DAU/MAU
percent
The reason this number is important is that revenue is generated by “a constant multiple of
active users.” It’s the repeat customers who are dedicated to your product or service that will
help propel growth. A number that’s over 20 percent is usually viewed as solid performance.

6. © 2018 Bernard Marr, Bernard Marr & Co. All rights reserved
Important User Engagement KPIs: What are DAU,
WAU, and MAU?
Mistakes When Measuring Engagement
User engagement metrics can be very helpful for organizations, but there are some caveats and some
common mistakes that are made when businesses first measure engagement numbers. Here are a few to
be mindful of:
1. Reporting total count: When you report the total count of active users, growth in that number usually
indicates growth in the number of users rather than usage. This doesn't give you the best insight on
product health or growth and has been critiqued as merely a vanity metric.
2. Measuring everything or what other businesses measure: You don't need to measure everything when
it comes to engagement metrics. Be purposeful about what you're tracking and why and direct your
efforts there. Don't rely on mimicking another company's engagement tracking. Every company is
unique, and what they track might not be what's most insightful for your business to track.
3. Not allowing numbers to normalize: There can be a lot of attrition when you first launch—a new app,
a new website, or a new business. For example, there is typically a 60 to 80 percent loss of new users within
the first week of signup for website and web apps. There are a lot of business launch tactics, such as PR
campaigns and special offers that could inflate engagement numbers initially. It's important to let numbers
normalize over a few months in order to get reliable data.

7. © 2018 Bernard Marr, Bernard Marr & Co. All rights reserved
Important User Engagement KPIs: What are DAU,
WAU, and MAU?
4. Products that aren't used daily but have high-value interactions: More frequent use doesn't always
indicate the highest value, and therefore the DAU/MAU ratio might not work for your business.
Consider the episodic nature of using products such as Airbnb. Most individuals don’t plan travel daily,
but when they do, it’s at a higher price point. Differentiating factors unique to business and industries
are the reason engagement metrics need to be customized to fit the unique needs of your business.
Engagement data can be very actionable for businesses and can help determine or prioritize new product
development and investment as well as provide a view into what your target audience finds valuable.
For more KPIs, check out this KPI Library or browse my KPI web page.

8. © 2017 Bernard Marr , Bernard Marr & Co. All rights reserved
© 2018 Bernard Marr, Bernard Marr & Co. All rights reserved
Bernard Marr is an internationally best-selling author, popular keynote speaker, futurist, and a
strategic business & technology advisor to governments and companies. He helps
organisations improve their business performance, use data more intelligently, and
understand the implications of new technologies such as artificial intelligence, big data,
blockchains, and the Internet of Things.
LinkedIn has ranked Bernard as one of the world’s top 5 business influencers. He is a frequent
contributor to the World Economic Forum and writes a regular column for Forbes. Every day
Bernard actively engages his 1.5 million social media followers and shares content that
reaches millions of readers.
Visit The
Website
© 2017 Bernard Marr , Bernard Marr & Co. All rights reserved
© 2018 Bernard Marr, Bernard Marr & Co. All rights reserved
Bernard Marr is an internationally best-selling author, popular keynote speaker, futurist, and a
strategic business & technology advisor to governments and companies. He helps
organisations improve their business performance, use data more intelligently, and
understand the implications of new technologies such as artificial intelligence, big data,
blockchains, and the Internet of Things.
LinkedIn has ranked Bernard as one of the world’s top 5 business influencers. He is a frequent
contributor to the World Economic Forum and writes a regular column for Forbes. Every day
Bernard actively engages his 1.5 million social media followers and shares content that
reaches millions of readers.
Visit The
Website

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