How to Define and Grow Active Users in SaaS

In SaaS, there is one metric that quietly shapes everything, right from the retention stage to the engagement, expansion and revenue growth stage: active users.

But here's the catch: “active” has a different context when used with different products. This means that for one tool, an active user may be someone who logs in. For another tool, it could be a user who sends a message, completes a task, or invites a teammate.

But why is it important to get this definition right?

Because your SaaS business can end up chasing vanity metrics, missing churn signals, or celebrating growth that isn’t real.

In this guide, we will break down what active users are, how to measure them right, and most importantly, how to grow them meaningfully.

Who is an active user?

An active user is a user who takes an action that receives real value from your product. This is ideally tied to the core problem your SaaS product solves.

More often than not, SaaS companies default an active user to something as simple as someone who has "logged in." However, logging in doesn’t necessarily mean someone used your product. This is why, as a business, you need to track real activity to understand how many active users your product has.

Events that can define an active user

As we said, active users can mean different things for different products. Let’s take a look at some of the different actions that define active users. However, it’s important to note that these actions would vary depending on the kind of product you have.

High-value product actions

These may be the core functions of the product that the users perform.

• Logged in (only when paired with deeper usage)
• Viewed dashboard or a report
• Created or edited a file/document
• Sent a message (e.g., Slack)
• Completed a task (e.g., created a campaign)
• Added or updated CRM records
• Exported or downloaded data

Engagement events

• Visited more than one page
• Accessed help docs
• Left a comment or note
• Opened a notification

Collaborative actions

These actions are excellent for multi-user SaaS businesses:

• Invited or tagged another user
• Started a collaboration (e.g., co-editing, assigning a task)
• Participated in chat or discussion

Automated events

• API calls
• Cron jobs or bot actions
• Webhooks or background syncs

Understanding DAU, WAU, MAU

Now that we have defined what makes a user active, the question that comes next is how often a SaaS company wants to see that behavior. This is where metrics like daily active users (DAU), weekly active users (WAU), and monthly active users (MAU) comes into play. As the names suggest, they refer to the count of users who are active daily, weekly or monthly.

However, not all three of them would be relevant or useful for all kinds of products. Let’s explore this futher:

• DAU: Best for products with high-frequency usage (e.g., messaging, productivity tools).
• WAU: Great for collaborative or workflow tools where users check in weekly.
• MAU: Common in SaaS, especially for tools used in longer cycles (e.g., analytics, billing software).

Why do these metrics matter?

Just getting the numbers on these metrics isn’t enough; we need to understand why these metrics matter. Let’s connect this to outcomes that make a difference to the success of your business:

• Activation quality: If DAU or WAU is growing steadily, you're activating users well.
• Engagement health: Returning active users from the previous day or week signal stickiness, which is a huge predictor of long-term retention.
• Revenue forecasting: Active usage correlates with churn, LTV, and net revenue retention.
• Expansion potential: Active users reflect more scope for new features adoption, upgrades, and referrals.

How to define your active user

As mentioned above, active users mean different things to different products. This is why it becomes important not to use a one-size-fits-all rule to define the same for your SaaS product. Here’s how to define your active user:

1. Map your product’s core value. To identify this, ask yourself what the core offerings of your product are and what pain points it solves.

2. Tie activity to that value. Logging in does not automatically mean success. But, completing a meaningful task does. You need to define what is a value-specific action for your product and see if your users are taking that action.

3. Segment by user role. What may be "active" for an admin may differ from an end user. Therefore, it becomes important for your SaaS product to segment its users by their roles and functions.

4. Define periodicity. Is weekly enough for your SaaS product to define its active users? Do your users get value monthly? Based on your core value and offerings, you need to define what a “healthy frequency” looks like.

Once you’ve defined your active users, you can then identify good vs bad active users. Here’s what we mean by the two terms:

Good active user

• A user who completed at least one task or invited a teammate
• A user who sent a message or joined a discussion
• A user who published or shared a report

Bad active user

• A user who logged in and performed no action
• A user who opened an email but didn’t take any action
• A user who landed on a dashboard but did nothing

Since your SaaS product is constantly evolving, you should keep in mind that what constitutes an active user for your product may evolve too.

How to measure your active users

You may think that your job is done once your SaaS product has 5,000 MAUs - but is that enough? It’s important to understand who your active users are and how they behave. This is where tools and platforms to measure these metrics come in handy.

Here’s how you can measure your active users:

1. Choose the right tools

Tools like Mixpanel and Amplitude give you deep behavioral analytics. GA4 is a great tool for blending website and product data. For unified event tracking across platforms, Segment is a smart pick. Instead of just installing these tools, you should take the time to define high-value events and ensure they’re tracked consistently.

2. Segment your active users intelligently

Not all users behave the same way, and segmenting them helps reveal who’s truly engaged. Start by separating new users from returning users. Then slice by behavior (e.g., users who invited teammates vs. those who didn’t), lifecycle stage (e.g., trial vs. paid), or roles (e.g., admin vs. end user). These slices expose where your activation is working or falling flat.

3. Analyze by cohorts and timeframes

Cohort analysis lets you see how groups of users (e.g., those who signed up in March) perform over time. Do they stick around? When do they drop off? Cohorts highlight retention patterns and help pinpoint what product changes move the needle. Comparing DAU, WAU, and MAU within cohorts gives a deeper view of user engagement over time.

4. Track stickiness and depth of engagement

Stickiness is a key metric because it tells you how many of your users return. But you need to go beyond quantity and measure quality. Are your users just logging in, or are they completing core actions? Look at metrics like average sessions per user, frequency of high-value feature usage, and time to value for a more meaningful understanding of your user engagement.

5. Build a dashboard that tells a story

Data alone isn’t useful unless it’s actionable. Build custom dashboards that track trends across new vs. returning users, power users vs. dormant accounts, and feature adoption over time. Executive teams care about the number of active users, but product teams need the why behind the numbers. Bring both views into your reporting.

5 strategies to grow your active users

Here are 5 strategies for you to tailor to your SaaS product to grow your active users:

1. Nail your activation experience

The first impression matters. Users should reach value quickly to stay with you for longer. Use in-app guides, onboarding checklists, and contextual tooltips to reduce friction. Emphasize your “aha moment” early, whether that’s sending the first message, completing a task, or creating something meaningful. Activation isn’t a phase—it’s an experience you continuously refine.

2. Create habit loops with thoughtful nudges

To grow active users, you need to turn one-time visitors into regulars. That requires habit formation. Use behavioral triggers like push notifications, in-app reminders, and scheduled emails to bring users back. However, keep in mind that timing, frequency and relevance are key things to keep in mind. Over-notifying leads to churn; not notifying at the right time is also rendered useless.

3. Segment and personalize your outreach

Generic campaigns rarely move the needle. Segment your users based on behavior, recency, and feature usage. Then create personalized content journeys using email campaigns, in-app banners, or targeted walkthroughs to nudge users toward meaningful actions. For example, Mailmodo’s AMP emails let users take actions like filling forms or booking demos directly within the email, reducing friction. When combined with behavior-based journeys, like sending reactivation emails after periods of inactivity, they help bring users back at the right moment with the right context.

4. Reward milestones and momentum

Use gamification but remember gamification isn’t just about points and badges—it’s about positive reinforcement. Celebrate when users complete key actions a message like “Nice! You just published your first doc!” Small wins reinforce value and increase the likelihood of repeated behavior. Consider milestone-based rewards, progress indicators, or goal tracking to keep users motivated.

5. Look into what’s not working

Sometimes, the best growth strategy is fixing what’s broken. If active usage is low, don’t just pump out more campaigns, dig into the product experience. Where are users dropping off? What’s confusing or tedious? Use session replays, heatmaps, and user interviews to find friction points. Often, UX tweaks can have more impact than new features.

Takeaways

At the end of the day, active users is more than a metric. The number of active users your SaaS product gets is a reflection of how much value people are gaining from your product. As we’ve mentioned above, it’s not enough for your product to just count logins or clicks, your team needs to dig deeper and define user activity based on what truly matters in your specific use case.

This accounts for a combination of understanding your user’s journey, identifying specific moments that allow the user to stay on and use the product, and designing your product in such a way that it consistently and meaningfully engages with your users.