What does the stickiness ratio (DAU/MAU) indicate in product metrics?

The stickiness ratio, also known as DAU/MAU (Daily Active Users/Monthly Active Users), is a key product metric used to measure the engagement and retention of users on a platform or application. Here's what it indicates:

1. Engagement Level: A high stickiness ratio suggests that a significant portion of monthly users is actively using the product on a daily basis. This indicates a high level of engagement, as users are consistently returning to the product within a short time frame.
2. Retention: The stickiness ratio is often used as a proxy for user retention. A higher ratio generally implies better retention, meaning that users find value in the product and are motivated to use it regularly.
3. Product Health: It can be an indicator of the overall health of the product. A low stickiness ratio might suggest that users are not finding the product compelling enough to use it daily, which could be a concern for long-term sustainability.
4. Monetization Potential: For products that generate revenue through user interactions (e.g., advertising, in-app purchases), a higher stickiness ratio can indicate greater monetization potential since engaged users are more likely to interact with ads or make purchases.
5. User Experience and Satisfaction: A consistently high stickiness ratio might suggest a positive user experience and satisfaction. Users are likely to return frequently if they find the product easy to use, valuable, and enjoyable.
6. Product Stickiness Benchmark: It provides a benchmark for comparing the stickiness of different products or versions of a product over time. Changes in the stickiness ratio can indicate the impact of product updates, changes in marketing strategies, or other factors affecting user engagement.

In summary, the stickiness ratio is a valuable metric for assessing how well a product is retaining and engaging its user base. It can be used by product managers and other stakeholders to make informed decisions about product development, marketing strategies, and overall user satisfaction.