How to achieve excellence using North Star Metric

North Star Metric

1. North Star Metric

2. What is a “North Star Metric”? A North Star Metric (NSM) is one measurable indicator that’s able to stand for a product’s long-term growth. It must be something that points to growing revenue, profit, and customer realization of value. Why customer value? Because the customer success is one of the best signals that they’ll stay as users and keep paying. Revenue is a good indicator of where you are now, but customer success gives you a picture of future revenue and success

3. Why is a North Star Metric important? North Star Metric promotes the behaviors and culture that also drive progress: Alignment : The right North Star Metric gives the entire company a singular focus Focus on Impact : It helps teams prioritize customer experience, which leads to improved acquisition and retention Prioritization : It tells you which activities, features, experiences, etc matter most, and which don’t – helping define your product roadmap Transparency : It makes it clear at a glance how the company is faring Accountability : It enables teams to be held properly accountable for the outcomes they achieve

4. Should a company only have one product North Star Metric? Usually, yes! North Star Metric-based thinking puts one key metric that is known to drive growth out in front, to align teams around it. Of course, the product team still has product-specific KPIs, just like the development team, the marketing team, the accounts payable team, the sales team, etc. The North Star Metric sits at the top of a hierarchy of those KPIs, which all feed into driving it forwards. It ties day-to-day priorities together and ensures that teams pull in the same direction so that growth happens faster.

5. Benefits of the North Star Metric A North Star Metric helps your company in a number of ways: Focus : Your entire company has the same focus. At the team level, you still focus on a different number, but ultimately everyone has the same goal. More about this in a moment. Clarity : Everyone can see at a glance how well the company is doing. Customer focus : The company is more concerned with adding value for the customer than deriving value, so you automatically make room to be busy with retention. The end result will be that your business will grow much more efficiently, because you have more focus and that focus is also focused on long-term growth.

6. How to identify and define your North Star Metric North Star Checklist: Be one single indicator that shows progress towards long-run success Be easy to track, measure, and communicate Be something you have control over, not at the mercy of external factors Not be a vanity metric Reflect user realization of your product’s core value across the Customer Journey Reflect customers’ depth and breadth of adoption and engagement, activity levels, and the extent of results achieved Connect these other factors up with revenue, profit, and shareholder value

7. Checklist for a good North Star Metric Your North Star Metric equals your client’s ‘success’ moments. Your North Star Metric expresses value to the customer Your North Star Metric is measurable Your North Star Metric is time-bound Your North Star Metric is within your control Your North Star Metric is a direct reflection of your growth Your North Star Metric has mutual effect on the entire Pirate Funnel Your North Star Metric is growing with some frequency to get instant feedback

8. PIRATE FUNNEL AAARRR

9. Metric from GO-JEK is “ the number of journeys started ”