DAU / MAU

User retention rate is a metric that indicates the proportion of users that have stayed with your service for a while. The retention rate can be calculated annually, monthly, weekly or daily. The periodicity depends on the purchase/usage cycle and the frequency at which the purchases/usage are generally made.

In Facebook there is good 30 day retention data called the DAU/MAU Ratio – which can also be called Stickiness. This is the ratio of Daily Active Users to Monthly Active Users. For example, a DAU/MAU ratio of 50% would mean that the average user of your app is using it 15 out of 30 days that month.

It turns out this simple metric is enough to predict, with a high level of probability, the success of a product. For example, look at the correlation between the following set of Facebook games.

Here we have games that fit a broad set of criteria, in terms of brand association, demographic appeal, play style, and time since launch. Second column and the fourth column are almost perfectly in order Despite this broad cross-section of games it appears there is a very direct correlation between stickiness and success. Let’s take a deeper view of the data.

This is called the coefficient of determination (R2) and predicts whether two correlated data sets accurately predict future success. If everything lined up perfectly on the linear regression line above you would have an R2 value of 1, and then we could say there is a perfect correlation between Stickiness (x axis) and the Size of the app (y axis). Using these social games we have a rather astonishing “fit” of 0.77.