What is Monthly Active Users (MAU)?
Monthly active users (also known as MAU) is a marketing metric used to determine the number of unique users that visit a website or use an app within a month.
Importance of monitoring Monthly Active Users (MAU)
Monitoring Monthly Active Users (MAU) is important as it provides insights into the number of users who actively engage with a product or service over a period of time and allowing businesses to measure and improve customer engagement and retention.
MAU can serve as a key performance indicator (KPI) for businesses, helping them measure the success of their marketing efforts and product development strategies. By analyzing changes in MAUs over time, companies can identify trends, understand the impact of new features or marketing campaigns, and make data-driven decisions to optimize their products and services.
Use cases of MAU
Benchmarking user engagement
Many companies start using MAU as a way to define a baseline of user engagement for their website or app. Subsequently, they are able to benchmark improvements in performance, usually on a monthly, quarterly, or yearly basis.
Identifying growth trends
Keeping track of MAU has helped many organizations identify growth trends within their business. For example, if a business has developed and published several apps, a significant increase in one app's MAU metric would indicate faster growth compared to its counterparts.
Estimating revenue potential
MAU can be a key indicator of revenue potential, especially if an app has already been monetized. One common scenario involves apps that offer both a free and premium version: the higher the overall MAU is for the app (both free and premium users), the more likely that increased revenue will come in as a result of customers buying the premium version.
Comparing performance to competitors
Many businesses use MAU as a way to make an "apples to apples" comparison between their website or app's performance vs. that of a competitor. For example, many social media companies regularly report their MAU, allowing competitors and investors to evaluate the company's performance by itself, and in reference to other platforms.
Identifying patterns and anomalies
MAU is also one tool that companies can use to identify patterns and anomalies in user behavior. For example, marketing analysts can use MAU to monitor seasonal trends (e.g., an app has a high level of monthly active users over the summer, but a greatly reduced level over the winter).
How to calculate MAU
The first step in calculating your MAU is defining who exactly should be included as an "active user." Is it merely someone who visits your site or app, or someone who has a meaningful interaction with it?
Once you know who to include in the category of "active user," the formula to find your MAU is relatively straightforward. For websites, you can simply add up the total number of unique visitors to your site within a particular month (e.g., 15,000 individual visitors from September 1st to September 30th = an MAU of 15,000). For apps, you may want to use this formula:
Total active users / total downloads = MAU
For example, if 200 people download your app in March, but only 100 people use it in April, your MAU would be 50% of your total users: (100/200) x 100 = 50%.
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Limitations of Monthly Active Users (MAU)
Limited understanding of user engagement
MAU can help companies understand how many users are engaging with their website or app. However, it is limited in terms of defining other aspects of user engagement, such as exactly what typical user interactions involve, and why users engage with brands in the first place. For example, MAU doesn't factor in other marketing channels that may result in increased user engagement with a website, such as email campaigns, social media marketing, etc.
Ignores user retention
Another limitation associated with MAU is its inability to account for user retention. One scenario that illustrates this limitation is when an app has a steady level of monthly active users, but relatively few returning users each month.
Doesn't account for inactive users
Since MAU is not standardized within the marketing industry, it often doesn't account for users who are, for all intents and purposes, inactive. This is the case when anyone who logs into an app is considered an "active user," even if the person immediately logs back out without engaging with the app further.
Doesn't reflect the overall user base
Since MAU only accounts for active users and doesn't provide a lot of insight into the overall user journey (including motivation, level of engagement, and retention), it is limited in how accurately it reflects a company's overall user base.
Alternative metrics to MAU
Some metrics that companies use either in place of or in conjunction with MAU include:
Daily Active Users (DAU)
Daily active users (DAU) is a metric that measures the number of unique users who interact with an app on a particular day. For some companies, DAU may be a more reliable indicator of website or app performance. For example, Twitter no longer tracks MAU but focuses on mDAU (that is, monetizable daily active users).
Retention Rate
Retention rate has been defined as "the percentage of customers who continue to subscribe to a product or service over time." The retention rate is an important indicator of how satisfied users are with a brand or specific product. Many businesses use retention rates as a supplement to MAU (or vice versa).
Monthly Recurring Revenue (MRR)
Monthly recurring revenue (MRR) measures the amount of predictable revenue that a company will receive each month from its customers. Some companies prefer to focus on MRR instead of MAU since MRR directly correlates with sales and profits. Moreover, a combination of MRR and MAU may provide insight into how many active users are actually generating revenue for the business.
Lifetime Value (LTV)
Lifetime value (LTV) is a measure of the total amount of money a customer will bring over the course of his or her "lifetime," or relationship with the company. Companies that understand what a typical user's LTV looks like can determine whether their marketing should focus on the acquisition of more customers or the retention of existing ones.
How to increase Monthly Active Users (MAU)
There are several steps a business may take in order to increase MAU (Monthly Active Users). These include the following:
1. Improve user experience
Websites and apps that are user-friendly are likely to attract a higher volume of returning users each month.
2. Optimize onboarding
Some users may cease activity on an app because they don't understand all of the functionalities it offers. Companies can take advantage of the onboarding process for new users by guiding them through key value-adding features of the app or platform.
3. Increase engagement
There are several ways for a brand to increase user engagement on its app: for example, by delivering relevant, valuable content to customers on a regular basis, and by promptly responding to questions or comments. An increase in user engagement typically corresponds to an increase in MAU.
4. Implement push notifications
Push notifications (i.e., alerts generated by an app when it's not open) can help companies keep their product top of mind for consumers. Many game apps make effective use of push notifications. For example, some apps will alert users when a new game feature can be unlocked, or when a new online tournament is about to begin.
5. Leverage referral marketing
Companies may deploy a referral marketing campaign to boost their MAU. This usually involves incentivizing existing users to refer friends, family members, and colleagues. For instance, users that refer another person to the app may receive a special discount code or prize once the newcomer signs up.
6. Leverage influencers
Brands can partner with influencers on YouTube, TikTok, and other social media platforms to generate more buzz around their website or app, thus increasing the likelihood that their MAU will go up.
7. Utilize social media
Aside from partnering with influencers, businesses can promote their app via other social media features, such as posts, interactive content like polls and quizzes, and responses to user comments.
8. Create a sense of community
Brands that foster a sense of community within their user base are more likely to see high MAU. Some keys to creating such a "community spirit" include regular interaction with app or website users, consistent responses to comments or questions, and content generation that's tonally aligned with the core customer demographic.
9. Increase retention
As a company continues to improve its customer retention rate, it can expect to see a corresponding increase in its MAU (since returning users will be added to new ones).
10. Continuously improve and update
There are always opportunities to enhance the user experience associated with a website or app. Companies that are willing to keep improving and updating their platforms are more likely to see a higher number of monthly active users.
