Product Stickiness is a user engagement metric used to measure the product of a company’s effectiveness at improving customer retention and churn, which ties into recurring revenue.
Conceptually, product stickiness is contingent on the perceived value of a product offering being deemed sufficient, or exceed expectations, from the perspective of a company’s target customer base.
The DAU/MAU ratio is the most common measure of product stickiness, calculated by dividing a product’s daily active users (DAU) by its monthly active users (MAU), expressed as a percentage.
- Indicates user engagement – Helps measure how valuable your product is to users.
- Improves retention rates – Higher stickiness means lower customer churn.
- Boosts revenue – Engaged users are more likely to convert and make purchases.
- Guides product improvements – Identifies areas where user experience can be enhanced.
How to Calculate Product Stickiness Ratio?
The DAU/MAU ratio is the fundamental indicator of product stickiness and user engagement.
The formula to calculate product stickiness is the ratio between the product’s daily active users (DAU) to monthly active users (MAU), expressed as a percentage.
Where:
- Daily Active Users (DAU) ➝ The number of unique users engaging with a company’s product on a daily basis.
- Monthly Active Users (MAU) ➝ The number of unique users engaging with a company’s product on a monthly basis.
Conversely, the product stickiness can be measured using the average DAU, which is calculated as the average DAU divided by MAU.
- Daily Active Users (DAU) ➝ The number of unique users that interacted with a product (or website) on a daily basis, i.e. 24 hour period.
- Weekly Active Users (WAU) ➝ The number of unique users that interacted with a website (or app) on a weekly basis, i.e. 7 day period.
- Monthly Active Users (MAU) ➝ The number of unique users that interacted with a product, or website, in a particular month, i.e. 30-day period
How to Measure Product Stickiness
Product stickiness is a method to measure user engagement, which is a function of how compelling the product is, in itself, and the frequency at which the end-user engages with the product (or its features).
Simply put, “stickiness” measures how often and how frequently users engage with a company’s product in a specified time frame.
However, the term, “engage”, can be subjective at times, as the management team of each company defines the term at their discretion, which is usually based on their unique business model (and the industry where the company operates in).
Conceptually, the question answered by product stickiness is, “How many users return to engage with a particular product on a regular basis, within a specified time frame.”
For example, a mobile game developer might consider periodic usage, even if checking an app momentarily, as a form of engagement, whereas other digital media companies are more conservative and could perhaps only consider interacting with the product and its features for a predefined period of time to constitute “engagement”.
Products considered to be “sticky” are implied to deliver value to their customers (i.e. positive economic utility); hence, the customers continue to return (i.e. repeat purchases or continuation of subscription plan without cancellation).
All products, irrespective of the industry and success achieved to date, must be tweaked and improved upon to remain ahead of the curve (i.e. continuous improvement).
Product stickiness is thereby a method measure the effectiveness at which a company’s business model can entice frequent usage, contributing toward customer loyalty.
Creating engaging user experiences and improving product features are two common methods to improve the stickiness rate.
SaaS LTV/CAC Ratio Formula
The customer acquisition strategy of a SaaS company—one of the core components of its business model—is sustainable only if higher retention (and thus, reduced churn) contribute toward an increase in customer lifetime value (CLV.)
While there are plenty of SaaS metrics to analyze the unit economics of a subscription company, the fundamental method used among practitioners is termed the customer lifetime (LTV) to customer acquisition cost (CAC) ratio.
Or, put more concisely, the LTV/CAC ratio, which quantifies the total value collected from the customer divided by the cost of acquiring the customer.
The standard LTV/CAC ratio in the SaaS industry is widely accepted as 3.0x, which tends to be the target at which most SaaS and subscription companies aim for.
Given an LTV/CAC ratio equal to 3.0x, the SaaS company generates $3.00 in lifetime value (LTV) from a customer for each $1.00 spent on acquiring that customer, such as sales and marketing (S&M).
FAQs
What is a Good Stickiness Ratio?
- 20%–30% → Average stickiness (most apps fall into this range).
- 40%+ → Highly sticky product (e.g., social media apps like Facebook, WhatsApp).
- Below 10% → Low stickiness; requires improvement in engagement strategies.
How to Improve Product Stickiness?
- Enhance Onboarding Experience – Make it easy for users to get started.
- Deliver Continuous Value – Provide useful features that keep users engaged.
- Personalize User Experience – Tailor content and notifications based on user behavior.
- Encourage Habit Formation – Use gamification, streaks, or rewards to create engagement loops.
- Collect and Act on User Feedback – Improve based on what users need.