You’d be crazy not to measure your active users, at the appropriate frequency for your app. That may be daily, weekly, monthly, or yearly. (DAU / WAU / MAU).
As you monitor these key metrics, you’ll want to understand how and why it’s changing. I am a big fan of how Jonathan Hsu breaks it down in accounting for growth, breaking out the components that add or subtract from your top-level numbers. Understanding the dynamics that contribute to your growth (or lack thereof) are critical for members or your team to understand what drives success. Not just the PM that owns the feature, but many of the team members.
I’ve had conversations with PMs at many companies who may know their top-level numbers, but don’t have a good handle on why they’re going up or down. As Jonathan outlines in his post, two very different businesses can have the same MAU numbers, but one is much better than another.
There are a couple of scenarios I think are important to understand:
- If your retention rates are poor and new signups are helping you grow:
- When will your growth rate flat line?
- Could signups go down? What would happen if your growth flat lines or if your user base shrinks?
- If your active user numbers go up:
- Is that because of a one-time increase in new signups? Do you expect that to continue?
- Is it because of resurrecting users (making dormant users come back)? Is this a sign of a pattern you could invest in making stronger? Why do people stop using it in the first place?
- If your active user numbers go down:
- What component decreased? Was it isolated to resurrected users / signups / retaining existing users? If it was isolated, was there a product issue that contributed to it?
- Are you soliciting feedback from each of these buckets of users? There is gold to be mined by segmenting and surveying the users with the most valuable feedback.
In addition to knowing your high-level active user numbers, you should know why you’re growing. It’s helpful to understand what the future looks like if things stay the same or worsen. Even if you know, does the rest of your team know? When everyone understands how your product and business will be successful, they’ll have the context to more effectively make the critical decisions in building tech products.