Onboarding, Personalization, Retention: The Real Upstream Drivers of DAU & MAU

Increasing DAU & MAU keeps app marketers up at night. 

Perhaps, that’s been the case for you as well. 

Striving for a ratio between 20%-50% is good (while anything above 50% is “world-class”). Deploying consistent push notifications to keep users coming back. Monitoring low DAU/MAU values as they suggest your customers’ interest is waning. 

To an extent, all of these concerns are legitimate. But DAU and MAU, although being important metrics, aren’t the “end-all, be-all” numbers that many app marketers make them out to be. Benchmarks aren’t relevant in all circumstances, and pouring resources solely into acquiring more users might be putting a bandaid on deeper engagement problems. 

This blog post will examine why DAU/MAU measures sometimes fall flat, and what app marketers should actually focus on to improve stickiness.

DAU/MAU Aren’t Reliable Indicators of Engagement Alone

DAU/MAU aren’t reliable growth indicators because they provide a glimpse into the past. They’re lag measures, only showing what happened, so a downward trendline only reflects decisions and events that likely occurred weeks or months prior. By the time you see DAU and MAU reports, users who contributed to the decline would have likely churned. 

We can take a deeper look at why DAU/MAU aren’t metrics to obsess over. 

• Zombie counts: A user opening an app on D1 and who never returns counts the same as an active user all 30 days. 
• Not a mechanism: DAU/MAU counts merely tell you that users are returning, not why they’re returning. 
• Misleading Growth: As MAU increases with new users who never return, the stickiness ratio declines even if your primary users are engaged. 
• Notification Dependency: Aggressive push notifications can artificially inflate DAU/MAU, creating shallow engagement instead of real value. 

Does that mean DAU/MAU are purely vanity metrics? Not at all. But these caveats highlight the limitations of relying on them as primary growth levers.

The Upstream Trifecta

Since DAU and MAU aren’t true indicators of stickiness, the question remains as to what KPIs take precedence. 

That’s why you should prioritize onboarding, personalization, and retention. Fundamentally, these behaviors and their associated metrics matter more than DAU & MAU. When these three drivers are optimized, they increase DAU and MAU. 

Onboarding 

With onboarding, first impressions are often the last. You want that first session to deliver a high-quality, memorable experience that removes complexity and confusion. Users should feel like your app is the best solution for their needs. Anything less gives them reason to leave. 

Ultimately, your goal should be to trigger habit loops (as opposed to just showing off features). That may mean creating strong external triggers such as behavior-aligned push notifications, and clear product tours to guide users. The right onboarding sequence alone boosts DAU, and reduces the initial drop-off rate, resulting in a higher MAU count of engaged users. 

Onboarding Metrics

• Tutorial Completions—The percentage of new users who finish your onboarding tutorial or walkthrough sequence. 
• Account Creation Completion—The percentage of users who actually finish creating accounts they started. 
• Profile Creation Completion—The percentage of users who create accounts who also complete profile details such as names, photos, bios, and preferences. 
• Feature Discovery Rate—The percentage of users who interact with multiple key features during the onboarding process (typically 3 or more in the first 24 hours). 
• Session Length in First Visit—A measure of how long users spend in your app during their first visit. 

Higher measures in these categories indicate a smoother onboarding experience. 

Personalization

Personalization is an undeniable hook for app users. It too encourages habit formation because it leverages their own preferences and behaviors to deliver relevant features that keep users coming back for more. Whether it’s personalized content, notifications, or recommendations, personalization ensures that your app becomes a helpful asset in users’ lives. 

Personalized experiences have a powerful impact on stickiness. Users crave personalized experiences (that aren’t creepy) and are more likely to return to an app that serves their unique needs regularly. For example, POPS, a southeast Asian content hub, increased their DAU:MAU ratio by 18.92% by means of personalized content recommendations. That demonstrates the importance of focusing on personalization, rather than retroactively reading DAU and MAU reports. 

You’re more likely familiar with the personalization metrics we’re about to mention, but it’s worth understanding how they’re relevant to personalization. 

Personalization Metrics

• AOV—An indicator of how effective personalized product recommendations are, especially since personalization is associated with a higher basket value, notably for ecommerce apps. 
• Notification Opt-Out Rate—A signal of whether your personalized messaging is hitting or missing the mark. 
• Conversion Rates—The most potent metric for demonstrating true sales impact (especially for transactional apps), and suggests how well (or not) your personalization features nudge users through the funnel. 
• CTR—A strong gauge for how well your personalization features are resonating with users and their overall relevance. 
• Time Spent in App—A measure of engagement that shows the effectiveness of personalization, which usually increases time spent per session. 

Retention 

Retention is the cornerstone of true growth. Securing users with high LTVs leads to a returning user base that drives profitable traffic and repeat purchases within your app. 

You’ve probably seen stats similar to this one but we’ll repeat: acquiring new customers is 5-25 times costlier than retaining existing ones. So retention strategies should be a priority, not something done in retrospect. That may mean adding gamification elements, stronger in-app messaging, and rewarding loyalty. 

Retention also needs to be at the forefront of your efforts, because it’s a better indicator than DAU and MAU metrics alone. Users who stick around provide proof that your app has achieved product-market fit. Relying solely on DAU and MAU metrics can paint a skewed picture of your app’s value, because these numbers may be inflated by artificial triggers such as excessive notifications.  

Retention Metrics

• Churn Rate—Clearly define when a user has churned (i.e., no activity after 30 days).
• LTV—Ensure LTV is higher than CAC and segment by user cohort to determine whether newer users hold more or less value than older ones. 
• Retention Rate—Measure by installation date to see impact of updates and campaigns, and remember that retention rates typically fall to 6% by day 30, across all verticals. 
• Revenue Churn Rate—Track lost customers along with subscription downgrades, and evaluate if high-paying customers are churning differently than low-paying users. 
• Purchase Frequency—Measure the average time between purchases (i.e., purchase 1, purchase 2, purchase 3). 

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So Where Does DAU & MAU Fit Into the Picture

DAU and MAU aren’t useless metrics. They do give an overall insight into the stickiness and habit-forming potential of an app, and low DAU/MAU rates can be a cause for concern (that requires a diagnosis). 

However, you need to measure and make decisions around them under the right contexts. 

Pair DAU & MAU Measurements With Other Crucial Metrics

Analyzing DAU and MAU metrics in isolation may not give you an accurate picture of performance. As we mentioned earlier, they show what’s happened in the past, and aren’t indicative of present and future performance. 

Ideally, you should pair them with behavioral-focused KPIs to get a better sense of engagement (which will then inform your strategy). For example:

• Pair DAU/MAU with onboarding completion rates. High completion and low DAU/MAU may indicate easy onboarding but low long-term value, whereas low completion means onboarding is too complicated. 
• Pair DAU/MAU with feature discovery rates. High DAU/MAU but low feature discovery rate indicates that your users may be interacting with your app due to notifications but not actually engaging with the app. 
• Pair D30 values with initial session length. Sessions that are too brief suggest users didn’t see value, sessions that are too long may signal user confusion. Either way, DAU/MAU metrics alone can’t tell you how users feel about your app. 

The key takeaway here is that DAU & MAU values are suggestive, but pairing them with adjacent metrics yields more definitive insights. 

Matching DAU & MAU Focus to Your Vertical

The other side of the DAU/MAU relevancy issue is context. High and low values have different implications depending on your vertical, and this is underscored by the fact that apps have unique usage patterns. For instance, ideal daily and monthly user counts in the gaming world will naturally differ from productivity or personal finance apps. 

Examples of Product-Specific DAU/MAU Benchmarks

• 50-70% ratios for social networking and messaging apps.
• 20-40% ratios for project management and productivity apps.
• 15% ratios for apps used periodically (i.e., taxes and accounting/bookkeeping).

Verticals set the standard, and yes, you can use comparative benchmarks to make diagnoses in your own app performance if they don’t measure up. 

But it’s helpful to remember that some of the most profitable companies in the world run apps that aren’t used daily (or even monthly). 

They include:

• Travel apps like Airbnb or Vrbo where users may only book trip accommodations once a year. 
• SaaS tools like DropBox or Salesforce that may only warrant weekly usage (depending on the task or role). 
• Many ecommerce apps where users make occasional purchases (including those that sell high-ticket luxury items). 

And yet, these apps dominate their respective markets, commanding high revenue and customer loyalty. So again, DAU/MAU ratios, although helpful for giving you some insight into your app’s stickiness, have limits and aren’t always indicative of good or poor performance. 

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DAU/MAU Provides a Snapshot, Not the Whole Picture

DAU/MAU isn’t entirely a vanity metric. Its utility comes in the form of a smoke signal, giving you a sense of stickiness and engagement. And if you’re noticing abnormal values for your given vertical, it’s worth diving deeper into your performance. 

However, the key is to avoid jumping to conclusions, and fixating on DAU/MAU. After all, the values merely reflect other aspects of the app experience.  

If you want to increase DAU/MAU, then optimize the app experiences and phases that naturally lead to higher values: onboarding, personalization, and retention. Creating a streamlined onboarding process, privacy-compliant yet relevant personalized features, and strong retention loops that users can’t resist. 

Ironically, prioritizing a seamless and value-driven experience over maintaining regular user counts, will help you maintain regular user counts. 

Looking to improve your app’s engagement and retention potential? Get in touch with us to learn how we can help you optimize your app’s performance!

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Frequently Asked Questions (FAQs)

Can DAU be misleading? 

Yes, DAU can give you a skewed picture of app performance. Inconsistent definitions of an “active users”, limited insight into user sentiment, and superficial actions within the app can inflate the metric so that it appears as if users are truly engaged. However, they might not be. 

How to interpret dau mau?

The higher your DAU/MAU percentage, the “stickier” your app is by definition. So if you have 1000 monthly active users and 800 daily active users, your DAU/MAU would be 80%, meaning 80% of your monthly active users are using your app on a given day. That said, it’s important to remember that these numbers can be skewed by users responding to push notifications or briefly logging in, as opposed to true engagement. 

What is good retention for an app? 

Typically, an app is considered to have good retention if it retains over 33% of its users after an install. That said, global retention benchmarks (across verticals) are 26% on day 1, 13% on day 7, 10% by day 14, and 6% by day 30. However, these rates vary by platform. 

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