Apr 23, 2023

Monthly Active Users (MAU)

Monthly Active Users (MAU) is a metric that measures the number of unique users who actively engage with a company's products or services over a given period of time, usually on a monthly basis. It's a widely used metric in the software as a service (SaaS) industry as it helps to understand the level of engagement and adoption of a company's products or services and can also be used to predict future growth.

What is MAU

Monthly Active Users (MAU) is a metric that measures the number of unique users who actively engage with a company's products or services over a given period of time, usually on a monthly basis. It is calculated by counting the number of unique users who have performed a specific action, such as logging into an account, using a feature, or making a purchase during a given month.

Why MAU is important

MAU is an important metric for several reasons:

  • It helps a company understand the level of engagement and adoption of its products or services. A high MAU indicates that a company has a large number of users actively using its products or services, while a low MAU indicates that a company has a small number of users.

  • It can be used to predict future growth. Studies have shown that companies with high MAU tend to have higher growth rates than those with low MAU.

  • It can be used to compare companies in the same industry. By comparing the MAU of different companies, investors and analysts can get a sense of which companies have the most engaged and active user base.

  • It can be used to inform business decisions such as product development, customer support, and sales and marketing efforts.

How MAU is calculated

MAU is typically calculated by counting the number of unique users who have performed a specific action, such as logging into an account, using a feature, or making a purchase during a given month.

For example, if a company has 100 users who logged into its platform in January, and 90 of those users also logged in during February, the MAU for January would be 100 and the MAU for February would be 90.

How to improve MAU

There are several ways that a company can improve its MAU:

  • Improving the product or service: One way to improve MAU is to improve the quality of the product or service. This can be done by incorporating customer feedback and making changes based on that feedback.

  • Providing better customer support: Another way to improve MAU is to provide better customer support. This can be done by making it easier for customers to get help and by providing more personalized support.

  • Building a stronger brand: Building a stronger brand can help to improve MAU by making customers more likely to continue using a company's products or services.

  • Creating a better user experience: Creating a better user experience can help to improve MAU by making it easier for customers to use a company's products or services.

  • Offering incentives for engagement: Another way to improve MAU is to offer incentives for customers to remain engaged, such as discounts, special offers, or exclusive access to new features or products.

Why investors value high MAU growth

Investors value high MAU growth because it indicates that a company has a large number of engaged and active users. A high MAU growth means that a company has a strong product and a good reputation, which can help to attract new users and generate more revenue. Additionally, a high MAU growth can also indicate that a company has a strong business model and is well positioned to generate strong returns on investment.

How MAU relates with other SaaS metrics

The MAU is closely related to several other SaaS metrics, including:

  • Monthly Recurring Revenue (MRR): A high MRR is positively correlated with a high MAU, as more active and engaged users are more likely to continue paying for the company's products or services.

  • Customer Acquisition Cost (CAC): A low CAC is positively correlated with a high MAU, as it indicates that the company is efficiently acquiring users who are more likely to engage and remain active.

  • Churn Rate: A low churn rate is positively correlated with a high MAU, as satisfied and loyal users are less likely to leave the company.

Conclusion

In conclusion, the MAU is a key metric for SaaS companies, as it helps to understand the level of engagement and adoption of a company's products or services. It's important to understand how the MAU is calculated and how it relates to other SaaS metrics in order to improve it and increase the value of the company in the event of an exit. A high MAU growth indicates that a company has a large number of engaged and active users, which can help to attract new users, generate more revenue, and improve the company's growth potential.

Sources

  • SaaStr article on "Why Monthly Active Users (MAU) is the Most Important Metric for SaaS Companies"

  • OpenView Partners article on "The Importance of Monthly Active Users (MAU) in SaaS"

  • Various financial reports and publications of SaaS companies.

Monthly Active Users (MAU)

Monthly Active Users (MAU) is a metric that measures the number of unique users who actively engage with a company's products or services over a given period of time, usually on a monthly basis. It's a widely used metric in the software as a service (SaaS) industry as it helps to understand the level of engagement and adoption of a company's products or services and can also be used to predict future growth.

What is MAU

Monthly Active Users (MAU) is a metric that measures the number of unique users who actively engage with a company's products or services over a given period of time, usually on a monthly basis. It is calculated by counting the number of unique users who have performed a specific action, such as logging into an account, using a feature, or making a purchase during a given month.

Why MAU is important

MAU is an important metric for several reasons:

  • It helps a company understand the level of engagement and adoption of its products or services. A high MAU indicates that a company has a large number of users actively using its products or services, while a low MAU indicates that a company has a small number of users.

  • It can be used to predict future growth. Studies have shown that companies with high MAU tend to have higher growth rates than those with low MAU.

  • It can be used to compare companies in the same industry. By comparing the MAU of different companies, investors and analysts can get a sense of which companies have the most engaged and active user base.

  • It can be used to inform business decisions such as product development, customer support, and sales and marketing efforts.

How MAU is calculated

MAU is typically calculated by counting the number of unique users who have performed a specific action, such as logging into an account, using a feature, or making a purchase during a given month.

For example, if a company has 100 users who logged into its platform in January, and 90 of those users also logged in during February, the MAU for January would be 100 and the MAU for February would be 90.

How to improve MAU

There are several ways that a company can improve its MAU:

  • Improving the product or service: One way to improve MAU is to improve the quality of the product or service. This can be done by incorporating customer feedback and making changes based on that feedback.

  • Providing better customer support: Another way to improve MAU is to provide better customer support. This can be done by making it easier for customers to get help and by providing more personalized support.

  • Building a stronger brand: Building a stronger brand can help to improve MAU by making customers more likely to continue using a company's products or services.

  • Creating a better user experience: Creating a better user experience can help to improve MAU by making it easier for customers to use a company's products or services.

  • Offering incentives for engagement: Another way to improve MAU is to offer incentives for customers to remain engaged, such as discounts, special offers, or exclusive access to new features or products.

Why investors value high MAU growth

Investors value high MAU growth because it indicates that a company has a large number of engaged and active users. A high MAU growth means that a company has a strong product and a good reputation, which can help to attract new users and generate more revenue. Additionally, a high MAU growth can also indicate that a company has a strong business model and is well positioned to generate strong returns on investment.

How MAU relates with other SaaS metrics

The MAU is closely related to several other SaaS metrics, including:

  • Monthly Recurring Revenue (MRR): A high MRR is positively correlated with a high MAU, as more active and engaged users are more likely to continue paying for the company's products or services.

  • Customer Acquisition Cost (CAC): A low CAC is positively correlated with a high MAU, as it indicates that the company is efficiently acquiring users who are more likely to engage and remain active.

  • Churn Rate: A low churn rate is positively correlated with a high MAU, as satisfied and loyal users are less likely to leave the company.

Conclusion

In conclusion, the MAU is a key metric for SaaS companies, as it helps to understand the level of engagement and adoption of a company's products or services. It's important to understand how the MAU is calculated and how it relates to other SaaS metrics in order to improve it and increase the value of the company in the event of an exit. A high MAU growth indicates that a company has a large number of engaged and active users, which can help to attract new users, generate more revenue, and improve the company's growth potential.

Sources

  • SaaStr article on "Why Monthly Active Users (MAU) is the Most Important Metric for SaaS Companies"

  • OpenView Partners article on "The Importance of Monthly Active Users (MAU) in SaaS"

  • Various financial reports and publications of SaaS companies.