Whenever you want to get some investments from some Venture capital or take stock of the health of your startup, you need to consider several metrics and keep an eye on different numbers.
To get insights into the overall health of your business, you can use Monthly Active Users or simply MAU numbers. After going through this post, you will be able to understand:
- Importance of active users
- Method to calculate it
- The usefulness of MAU metric
Unveiling the Crucial Role of Active Users
As a business owner, you need to ensure that your app is in use and giving benefits to your customers. Active users’ number is an indication that people are interacting with your app, products, or services. If it’s a healthy number, then you can predict that your business is doing really well.
Estimating or determining the No. of active users will help you in figuring out how effective are your marketing campaigns and how good is customer experience. It helps in estimating the other useful metrics as well such as customer lifetime value. LTV can be calculated only when you know how many customers are retained. And retention rate relies directly on the active users.
In simple words, the number of active users predicts the general health of your business or SaaS company and serves as a platform to calculate other SaaS metrics.
Unlocking Growth: The Essence of Monthly Active Users (MAU)
It’s the number of users who have performed some action in your app over the previous 30 days or simply last month.
Let’s delve deeper and explore the 3 main components of MAU.
When estimating MAU, you have to count all the users who have performed an action using your app in the last 30 days. Every customer will be counted only once regardless of the fact how many times a specific customer performed the action.
Using your app, several actions can be performed. However, the main point is what will be considered as an action. In general, only opening the app or signing in to the app will be enough to count as an action. It allows you to compare your business with others conveniently.
The last 30 days or the previous month from the date of calculating MAU will be the time frame for this metric.
Based on these components, MAU can be defined as:
The number of unique users who at least opened your app in the previous 30 days or last month.
Mastering the Computation of Monthly Active Users (MAU)
MAU is not like other metrics. It gives you ideas about the performance of an app over time. It will be based on the performance that can attract and retain customers.
Calculating MAU is pretty easy. You simply have to estimate the number of users who signed up in your app and performed some action in the last 30 days. Just tallying the customers or users will give you the MAU number.
The Importance of MAU as a Key Metric
Every startup SaaS company needs to know its KPIs and relevant metrics. The most important of these metrics are:
- Churn Rate
VCs who want to invest in your company need to look for an MAU to DAU ratio. Why so?