What Is Customer Stickiness (Definition & Formula)

What is customer stickiness?

Customer stickiness is a user engagement metric that shows how frequently your customers use your product/service.

For example, if we’re talking about a SaaS product, “use” will mean opening an app, making meaningful interactions, and coming back to it on another day.

Users that show the tendency to return and engage with your product day after day stick with it because it is:

• High quality
• Convenient 
• Well-priced for its value
• Engaging
• Better than the alternatives

A “sticky” product helps reduce customer churn, increase customer lifetime value and retention, improve your brand image, get referrals, and increase expansion opportunities.

How to calculate customer stickiness rate (formula & example)

Customer stickiness rate is the rate at which your existing customers return to your product/ service.

You can calculate the customer stickiness rate by dividing the number of daily active users with the number of monthly active users — here’s the formula:

Customer Stickiness = DAU/MAU

For example, if you’ve counted 800 daily active users, and 3600 monthly active users, your customer stickiness rate equals 800/3600 = 0.22, or 22%.

However, not all products or services require daily use; in that case, it would be more realistic to calculate customer stickiness with other measurements:

• Daily active users / Weekly active users — DAU/WAU ratio is better when you expect frequent, but not habitual use.
• Weekly active users / Monthly active users — WAU/MAU ratio is good for involved, but not daily users.

How to improve customer stickiness rate?

1. Create a personalized user experience

Using personalized recommendations will help you with customer stickiness a lot. 

Take a look at repeated customers’ purchase history and take notes of patterns: which products are frequently bought together? What’s the purchase frequency and time until the next purchase? What’s the category they most frequently shop for?

Then, you can provide them with product recommendations that pair well, and get the right timing.

2. Provide first-class customer support

A blunder can happen to anyone, but it is customer support that will get you out of trouble every time.

And it doesn’t even have to be a mistake on your part! A support agent who knows the ins and outs of your products and services can:

• Instruct the user on how to use it with ease;
• Show them how to increase their own profit by using your product;
• Collect precious insights that help you improve, and create social proof

Quick FAQ about customer stickiness

1. What’s the difference between customer stickiness, customer loyalty, and customer retention?

All of these terms are closely related, but not entirely the same:

• Customer stickiness leads to customer retention and loyalty, but focuses on the genuine value they get from the product. This metric is notably transactional and refers to perceived (high) quality and experience.
• Customer loyalty refers to an emotional aspect of your brand; a loyal customer will frequently return to your services (retention) because they see value in them (stickiness), but loyalty is what will make them recommend and advocate for you, and give you a head start when considering the competition.
• Customer retention is improved by customer stickiness, but it’s a broader concept that: a) measures loyalty
  b) turns people into repeat customers
  c) makes them opt for you instead of your alternatives and competitors.

2. What is a good customer stickiness rate?

This depends on your product/service type and the industry.

Generally speaking, a customer stickiness rate of 20% or above is great for any industry. In SaaS, the average customer stickiness rate is 13% — and anything above is your goal.

3. Is customer stickiness a reliable metric to track?

Yes — but only if you define what meaningful engagement is in your case. 

For example, if you want to measure customer stickiness for an enterprise SEO tool, it would be more accurate to exclude holidays and weekends.

Defining factors will vary from one industry to another, and there are no one-size-fits-all metrics. Counting them in will help you have reasonable expectations and see the bigger picture than a single metric can paint.

So, use customer stickiness in a reasonable way and complement your results with other benchmarks, steering clear from vanity metrics.