The North Star Metric (NSM) is a metric that a company uses as a focus for their growth. This number best reflects the amount of value that your company brings to your customers. This article outlines this approach in basic terms.
What is a North Star Metric (NSM)?
The North Star Metric is a very valuable metric for any business that aims to achieve its growth marketing goals. The NSM is very much aligned with a “growth marketing” approach and focuses on the “North” aspect of direction. In other words, the NSM gives direction to the business — not in terms of distance, but in terms of substance.
How is this relevant to my company?
The NSM is the one metric that truly represents the essence of your organization. By focusing on the value of your product or service, and defining it in terms of both the short-term and the long-term, you can take your company far. It gives direction in which your company should head towards, making sure that everything you do is geared towards reaching that eventual goal.
What are some ways that you can use this metric?
The most common way that people use NSMs is when they are defining their growth marketing metrics — meaning the measurements of the progress of the company that are relative to specific goals. For instance, if you are tracking employee engagement, you would want to track how many active users you have as an indicator of how many people (or businesses) are interacting with the website and/or content in general.
Why is this important?
Simply, when you create a value-based focus for your growth marketing as an entire company, you will be far more successful. You will be able to understand which departments are performing at a high level, and which departments need to focus on improving their overall performance. By creating a North Star Metric, you will be able to see where all of the gaps exist within your organization and work to close them off so that you can focus on becoming a truly unified, successful company — and these gaps will help you grow your business!
Improve the value given
This is why you must always keep in mind the end-user of your products or services. If you are targeting small businesses, then you should always strive to improve the experience that your customers have every time they visit your site. This is why it is so important for your leaders to focus on this type of North Star Metric — it will give your business the direction it needs to succeed. In the end, if you are providing excellent customer service and value, then people will continue to buy from you, no matter what kind of economy we are in. With the right focus, you can easily see how far your business can go!
If you would like to understand more about developing and growing products as a start-up or within an organization, you can obtain more information here.