Product & growth

More active users, more value: how monthly active users raise your customer lifetime value – and how gamification changes that

Lucian Katzbach Gamification designer & startup coach

9 May 2025Published

4 minReading time

Board on the subject: more active users, more value - 24,800 monthly active users, 54 per cent retention after 30 days and 285 dollars of customer value, below it the formula customer value equals revenue per user times retention period

When you build a SaaS product, two metrics stand in the spotlight more often than any others:

Monthly Active Users (MAUs) and the Customer Lifetime Value (CLV).

But how exactly do these two numbers hang together? And what real difference does gamification make?

Let us untangle that — with a clear calculation and concrete ideas for putting it into practice.

First, briefly

This text works with a few abbreviations from everyday product work. If one of them means nothing to you — here they are. After that the rest reads by itself.

DAU, WAU, MAU: Daily, weekly and monthly active users: how many people actually used your product in a day, a week or a month. Not signed up — used.; Which of the three counts depends on the product. A chat tool you want to see daily, tax software once a month.; The ratio is where it gets really interesting: DAU divided by MAU tells you on how many days of the month an average user drops in. 0.2 means every fifth day. This figure says more about your product than any absolute user number.
Retention: Retention — the share of users still there after a certain time. "30-day retention of 54%" means: of a hundred new users, 54 are still active a month later.
Churn: The flip side of retention: the share that leaves. At 54% retention, churn is 46%.
CLV — customer lifetime value: What a customer brings you over the whole time they stay.
ARPU — average revenue per user: The average revenue per user per month.
Referral: A recommendation: new users who come to you through existing ones.
A/B test: Run two versions at the same time, half the users seeing one each — then measure which does better.
Power User: The small group that uses your product most intensively. Often the best source of what really creates value.
SaaS — software as a service: Software you rent rather than buy; it runs at the provider, not at your place.
XP, Badges, Leaderboards: Building blocks from game design: experience points for visible progress, badges for goals reached, leaderboards for comparison with others.

1. Why MAUs are more than just "traffic"

Monthly active users as the pulse of the product: 24,800 active and 16,200 returning users, 54 per cent retention and 3.7 visits on average; below it the path from discovering through using and coming back to growth

Monthly active users (MAU) are not just a sign of interest. They are an early indicator of Retention — that is, of the question:

do your users come back? Do they stay active? Or do they forget your tool after the first login?

The higher the MAUs, the more likely:

that your users get the full value of their subscription
that they renew
that they bring others along (referral)

Five ways activity carries on working: recommendation, teams, leaderboard, power users and a community that sustains lasting activity

In other words: MAUs are the pulse of your product.

2. How do MAUs affect customer lifetime value?

The formula broken down: revenue per customer times retention period gives customer value - 285 dollars times 10.4 months gives 2,964 dollars

The Customer Lifetime Value (CLV) is the average revenue a customer brings over the whole time they use your product. The simple formula is:

CLV = ARPU × retention period

Where:

ARPU = average revenue per user (per month)

Retention period = average number of months a user pays

But here is the decisive point:

the more active your users, the longer they stay.

Worked example:

Two scenarios side by side: without engagement 50 per cent active users, 30 euros of revenue, 3 months of retention and 90 euros of customer value - with gamification 75 per cent, 30 euros, 6 months and 180 euros

Scenario	Active users	ARPU	Retention (months)	CLV
Without engagement	50% active	30€	3 months	90€
With gamification	75% active	30€	6 months	180€

A difference of twice the CLV — at the same product price.

The only change: more activity through motivating design.

3. Gamification as an activity booster

An interface with game elements: level 7, 12,350 experience points, a weekly mission, a 12-day streak, badges and a team challenge

Gamification is not a bonus feature. It is a strategic lever.

Used properly it raises retention through:

Visible progress (levels, status, XP)
Personal relevance (missions, challenges)
Immediate feedback (rewards, badges, sound)
Social involvement (teams, leaderboards, cooperation)

The more often your product is used, the sooner it becomes a habit — and that is exactly what lengthens retention dramatically.

Small actions, every day: a weekly goal with five of seven sessions, a 12-day streak and the curve showing how more frequent use raises retention

4. The sweet spot: gamification + metrics

An A/B test with two variants and the effect after 30 days: 28 per cent more active users, 18 per cent less churn and 34 per cent more features used

Instead of handing out points blindly, you should measure:

Which gamification elements correlate with longer use?
How does the MAU curve change after particular missions or rewards are introduced?
Who are your "power users" — and what motivates them?

Analysis of the power users: 2,847 users, their motives from reaching goals through mastery and helping others to recognition, plus the group with seven or more active days

Tip: Start with a small A/B test:

Add a small level system or a weekly goal.

Measure how MAUs and the churn rate change.

If you build a level system, make sure the levels actually mean something and are not merely organisational units. You want a noticeable effect on your MAU.

In closing: activity is gold — and gamification the key

Turning activity into lasting value: engagement leads to retention and retention to customer value - beside it active users, renewals, referrals and revenue

If you take your MAUs seriously you raise your CLV measurably — not by raising prices but through real user behaviour.

And that is exactly where the potential of gamification lies:

not in gimmickry but in thought-through, psychologically grounded product design.

Whoever motivates their users today pays less for acquisition tomorrow — and builds long-term value.

Curious which gamification strategy fits your product?