Monthly Active Users became a SaaS benchmark because it's easy to measure, correlates loosely with product health, and sounds good in a board presentation. It's also one of the most misleading metrics in your product analytics stack.
The problem: MAU counts any session that meets your minimum activity threshold. In most SaaS products, that threshold is something like "logged in and clicked something." This counts the user who logged in, saw nothing new, and logged out in 45 seconds. It counts the user who uses 5% of the product for the same task every week. It counts the user who hasn't actually gotten value from the product in months but still opens it out of habit.
None of these are the same as an engaged user who is realizing value.
Better engagement metrics:
Activated Users: users who have completed a defined set of actions that indicate they've experienced the core value of your product. Not "logged in" — "used this specific workflow at least three times." The gap between MAU and Activated Users is your product's onboarding effectiveness gap.
Value-Moment Frequency: how often does a user experience the specific moment your product was designed to create? If you're a reporting tool, the value moment is "ran and reviewed a meaningful report." If you're a sales tool, it's "logged a deal-advancing activity." Measure this frequency, not session frequency.
Depth of Use: the ratio of features used by your median user vs. features available. Low depth (users using 15% of features) combined with high MAU is a warning sign. High depth combined with low MAU is a different problem. Neither is simply "good."
Feature-specific retention: does a user who uses Feature X retain at higher rates than one who doesn't? This identifies your stickiest features and should guide roadmap prioritization.
MAU is a vanity metric. Build the real picture underneath it.