This is about How User Engagement affects Growth of business Whats Next? How to Improve user Engagement

1. User Engagement: 5 Growth Metrics
Definition: What is user engagement?
Lets start by defining what User Engagement is and User Engagement Actions and why you should care.
Lincoln Murphy says user engagement is "when your customer is realising value from your SaaS." More generally you
can say "user engagement is when your customer is realising value from your product/service/website/app".
How User Engagement affects Growth
User Engagement impacts profoundly the growth of your business, on multiple levels. If users are getting value then
theyare going to stay around for longer. And if you can retain each user for longer, you will have more opportunity to
generate revenue from each user (meaning a greater Lifetime Value, so you can afford a higher cost of Customer
Acquisition) and more opportunity to have each user refer other new users - all of which leads to growth.
Put simply,UserEngagementleadstoRetention, which leads to Revenue and Referrals, both of which lead to Growth.
Common App and Website Engagement Metrics
Every business is different, and your users will behave differently from those of other businesses. Don't just blindly
adoptthe followingmetrics,insteadthinkabouthow useful theymaybe,orhow there my be something simi lar in your
business, and then focus in on one (or two) to measure.
You may try a few metrics until you find the best one for your business, but it’s totally worth it.

2. USER ENGAGEMENT METRIC 1: DAU, WAU, MAU
DAU, WAU, MAU standfor Daily,Weekly,andMonthlyActive Users,thatisthe unique amountof userswhoare "active"
within a given amount of time.
DAU and MAU metrics have been used for years by websites and reflect the most basic way of measuring user
engagement.
To use them well, you need to pay attention to the following:
(1) How you define Active User
The keyliesinhowyou define "active"user.Is"usersigned"inenoughtodefine auseras"active"?Perhapsits better to
to measure a more valuable action like "Update a Task", "Invite Collaborator", "Share Content" (see above). Lincoln
Murphy goes into more detail on this here and its worth reading to better define your active users.
(2) By ignoring the absolute numbers and looking at the ratio
Some folksthinkDAUand MAU are pseudovanitymetricsandmanyhave rejectedthemasmeaningless.(Mixpanel calls
them "bullshit metrics'). But, you can take more value by not looking at the absolute numbers, but by comparing the
Daily Active Users with Monthly Active Users to calculate "stickiness" which is a measure of how much users are
engaging with the product.

3. USER ENGAGEMENT METRIC 2: Stickiness, The DAU/MAU Ratio
Stickiness is generally calculated as the ratio of Daily Active Users to Monthly Active Users. 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.
USER ENGAGEMENT METRIC 3: D1, D7, D30 User Retention
D1, D7 and D30 retentions are calculated as the percentage of users who are active at any time after 1 day, 7 days and
30 days of signing up or installing your app.
Thisis oftenshownintabularformintoolslike Woopra,Mixpanel andKISSmetricscohortsanalysis, but the most useful
way to model the data though is as a Retention Curve.
Take a lookat the sample RetentionCurveshownbelow.Thiscurve showsthe percent of users that remain active after
a period of time.
The retention curve has two key features:
it tends to drop off really fast at the start (more later on this)
the curve then (hopefully) tends to flatten out over time. If instead of flattening it hits hit zero, its a strong signal you
urgently need to improve user engagement.
Thisis an incrediblyusefulwaytomeasure youruserengagement,andthe aim over time is to move the curve upwards
by working to improve your user engagement, both at the start when new users signup, as well as over time.
UPDATE (1): Amplitudeisthe onlytool I'maware of where youcan quicklysee the curve (please correct me if you know
other tools that generate these curves!).

4. UPDATE (2): I wrote this article to show you how to create Retention Curves using Mixpanel Cohorts Data and Google
Sheets.
USER ENGAGEMENT METRIC 4: Focus on W1 User Retention
Most newusers are lostat the beginning,ashorttime aftersignup.For website and web-apps, typically 60-80% of new
users are lost within the first week of signup. In mobile it can be 70-80% users lost after the first day.
Brian Balfour(Hubspot) saysthat7 day, or "Week 1 Retention (W1)" "has one of the biggest impacts on your retention
over time" because improvements that you make in week 1 retention carry through the entire retention curve.
Most newusersare lostat the beginning,ashorttime aftersignup.For website and web-apps, typically 60-80% of new
users are lost within the first week of signup. In mobile it can be 70-80% users lost after the first day.
Basicallyif youcan getmore people toengage earlywithyourproduct,thatwill have a a ripple effect pulling the entire
curve upwards (as shown in the arrow), so you'll keep more customers, and hence grow faster. Nice!
Brian Balfour(Hubspot) saysthat7 day, or "Week 1 Retention (W1)" "has one of the biggest impacts on your retention
over time" because improvements that you make in week 1 retention carry through the entire retention curve.
Improvingthismetricisall aboutfiguringouthow to quicklyget new users to experience the core value of the product
inthat critical firstweek.Andthe more people yougettoexperience thatcore value reallyquicklythe more those users
will tend to engage and retain with your product.
If you wantto use RetentionCurvesDemonstrate how yourRetentionisimprovingviaEngagement messages, here's an
earlier the article I wrote to show you how to create User Retention Curves using Mixpanel Cohorts Data and Google
Sheets so you can see the improvement.

5. USER ENGAGEMENT METRIC 5: Tripwire Metrics: Using 'Red Flags' to Engage Users
Typicallyusersdon'taskfor help, and tend to drift away if they don't get value quickly. If you can spot those users and
reach out, you may be able to engage them. To help spot users who aren't engaged, you can use Tripwire Metrics to
identify users who aren't engaging well and use that data to quickly act to engage them during those vital first 7 days.
The guys at Groove managed this, and were able to engage 10% of those users. They noticed that users who engaged
well (andwere therefore significantly more likely to become paying customers) spent an average of 3 minutes and 18
secondsinthe firstsession, and logged in an average of 4.4 times per day, whereas those who were not engaged (and
unlikely to convert) only spent an average of 0.35 seconds on their first session and logged in 0.3 times/day.
So,theyset upan alertto spot these non-engagedusersandwouldthen reach out to those users to offer personalised
helpgettingsetupwhichresultedinthose usersbecomingmore engagedand30% of those who responded would then
convert to a customer.
Here's the actual email used by Groove to engage "red flag" users:
Have a think about what user engagement metrics you could use as tripwires to alert you about users that aren't
engagedsoyoucouldreach out.For example,youcould automate an email like this for a user who hasn't performed a
Key User Engagement Action within 1 or 2 days of signing up.
Whats Next? How to Improve user Engagement
Now you know what to measure, the next thing you'll need is a strategy to help you improve your users engagement
and you can do a lot of that with both email and in-app messages.