#ActiveUserImpact high number of active users generally leads to a potential increase in price for a product or service, as a larger engaged user base indicates greater value and demand, allowing companies to charge more per user while still maintaining profitability; conversely, low active users may result in price decreases to incentivize more engagement and usage.

Key points about active users and price:

Increased value perception:

When a large number of users are actively using a platform, it signals a robust community and network effect, which can justify higher prices for new users due to the perceived added value.

Pricing models based on active users:

Many SaaS companies utilize a "per active user" pricing model, where customers are charged based on the number of users actively engaging with the platform, encouraging them to maintain high user engagement.

Market competition:

In highly competitive markets, companies may need to lower prices to attract more active users, even if it means lower profit margins per user.

Engagement metrics:

Metrics like Daily Active Users (DAU) and Monthly Active Users (MAU) are crucial for understanding user engagement levels and informing pricing strategies.

Example scenarios:

Social media platforms:

A popular social media platform with a large, active user base can charge premium prices for advertising or premium features due to the high potential reach.