In the last article, we started by listing the top 10 most important metrics for startups. These 10 metrics were good as a start, but in order to track all aspects of the business, a company needs more metrics than those 10. In a series of articles, we will present you metrics, related to different aspects of a startup – such as customers, users, and revenue – related, in order to show you what are the best metrics to use for tracking and measuring success in those particular areas. The insights you get will help you grow your business smarter.

In this article – the second one of the series – we will focus on metrics related to users. Needless to say, users are the most precious asset for a lot of companies. Tracking different aspects of your user base will help you understand them better, serve them better and ultimately capture more value in return (in terms of revenue). Tracking user metrics is especially important for startups that are yet to monetize their product or service as this is one of the few ways to measure how well they are doing.

Top 10 user metrics

1. DAU

Daily Active Users – this metric shows how many users have logged in to your app/website on a daily basis. It is important to count only those you consider active – in our case it is login but yours might be different – so that we know whether users are actually using your product/service. If many users register but are not active afterward, this means they are attracted to the product initially (good marketing) but are not convinced of the value offered.

Formula: # of users that logged in today (or depending on your definition)

Best visualized with a line or an area chart.

2. MAU

Monthly Active Users – similar to the DAU, but on a monthly basis. Knowing both figures can tell you valuable information. Let’s say you have 100 DAU and 2000 MAU in the span of 2-3 months. What this means is that your users are logging infrequently during the month, but are getting back every month for sure. Having that information in mind, you can, for example, add features to try to bring users more frequently to your app.

Formula: # of users that logged in this month (or depending on your definition)

3. Activation rate

Continuing on the topic of active users, this metric shows what percentage of all downloads or signups convert to active users. The definition of active user is, again, subject to business-specific logic. Examples include: creating an account after a download of a mobile app, being a DAU for at least 1 day, and funding (for trading apps).

Formula: number of users that become active (from the set of people in the denominator)
/ total number of new users from a certain time period * 100

4. Acceptance rate

One of the best marketing and growth methods is the old well-known word-of-mouth method. The acceptance rate shows an important step in the process of word-of-mouth growth – how many people accepted the invitation of their friends and became users. It reveals in a quantifiable measure what is the initial impression that your business makes to the invited prospective users. If the acceptance rate is low, you should revisit the design of the email and how you communicate your value.

Formula: Number of registration (of people that received an invitation) / Number of invitations * 100

5 more user metrics to know

5. Active User Growth Rate

You are already familiar with the concept of growth rate from the previous article. From this one, you know what an active user is. Hence, it won’t be hard for you to understand the concept of this metric – it shows the growth rate of active users only. It is a useful metric because it shows the net or real increase of your user base, not taking into account users that just sign up but churn right away.

Formula: # of active users in current time period / # of active users in previous time period * 100

It’s a good idea to visualize this with a time-series chart and not only a single number.

6. Bounce rate

The bounce rate shows the percentage of visitors on your website, who leave the website after viewing one page without navigating to any other page. Very useful metric in evaluating landing page designs as well as page designs in general.

Formula: # of people that exited the website without navigating to any other page of it / # of all people that visited your website

7. Click-Through Rate

This metric shows the number of people that click on a link as a percentage of all people that see that link. It is quite popular in advertising when marketers are evaluating the efficiency of an ad.

Formula: # of people that click on a link / # of people that see that link

8. Registered users

Tracking how many registered users you have, on a daily or monthly basis, can show you how effective your campaigns to attract new users are. This metric is particularly useful when compared to DAU or MAU as it will show how many of the attracted new customers actually stay and use your product/service.

Formula: # of registered users by day

Best visualized with a time series bar or line chart.

9. User Engagement

This metric is usually related to the social media marketing of a company. It shows how many interactions people have with your content as a percentage of all people that see it. The level of engagement is one of the popular measurements of the effectiveness of social media campaigns. For a more detailed analysis, you can track user engagement separately for clicks, comments, and shares.

Formula: # of user engagements with your content (such as likes, comments, shares) / # of impressions for your content

10. Unique Visitors

One of the most common metrics for websites – shows the number of people that visited a website for a period of time, usually tracked on a daily and on a monthly basis.

Formula: # of people that visited a website for a day or a month (each person is counted once, regardless of how many times they return back)