What Is North Star Metric?

North Star Metric (NSM) is a newly emerged term in the tech world, originated from the Silicon Valley, and it helps teams to understand how they can have a sustainable customer growth in the long run.

North star metric enables your team to understand the real core value you are delivering to your customers. Focusing your efforts to improve this metric is the best thing to grow your customer base.

How To Find Your North Star Metric?

To find your North Star Metric, you need to understand why do your best customers are soo hooked up to your product? In other words, you need to understand what makes your product so valuable to your customers.

After you find the value you provide to your most loyal customers, try to quantify this value and make it a single metric. This does not mean that there can not be more than one metric, but its best to boil this down to a single metric.

How Can North Star Metric Benefit You?

There are various departments in most of the organizations, and their departments are usually isolated from each other. For example, sales & marketing teams are tasked with attracting new customers. The customer support team is responsible for keeping the customers happy, and design team is responsible for designing the best product for the users.

North Star Metric allows your teams to focus on single metric that is vital for your company to grow, and NSM allows your teams to work together, and focus on one single goal, which is to improve your North Star Metric.

You can also boost your revenue growth by utilizing the NSM. Once you define your North Star Metric, it is imperative to break down the variables and figure out what key variables drive this metric.

These variables could be things like improving user retention, new user signups and so on. If you can understand the relationship between the variables and your conversion ratio, then you can gain intel on how to improve your North Star Metric.

NSM is critical to align your team on a common goal to drive sustainable growth over the long term. Find your North Star Metric and then understand the variables of it, and rally your team behind the idea of growing this metric.