The Art Of Choosing Your North Star Metric

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When it comes to understanding metrics for business growth, there's a lot to consider.

There's so many metrics that can be made easily available to marketers, and constantly going through the results found in each and every metric can be difficult.

Trying to focus on every metric at once also makes it difficult to grow a business, as it really slows down the process.

That’s why you’ll want to make sure to find a guiding metric that you can rally your marketing efforts around.

This guiding metric is also known as a North Star Metric.

What Is A North Star Metric?

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The term “North Star Metric” was coined by Sean Ellis in the GrowthHackers blog and is meant to indicate a metric that a company follows above all others to guide their path to success.

While this may seem like an oddball idea, when you take a closer look at it, companies have been leveraging this idea for a while now.

For instance, Facebook focuses their efforts on “Daily Active Users.” While there are other metrics that they pay attention to, they know that if they focus on this metric, they will stay on the path of success.

Why YOU Should Have a North Star Metric

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Your guiding metric will help to lead you to success in a couple of ways…

Focus

A North Star Metric gives marketers the ability to stay focused on growth by cancelling out some of the background noise.

There are so many metrics available to study that someone could really get lost in the weeds if they were trying to focus on all of them at once.

Once a marketer chooses their North Star Metric, they can start putting more of their energy into getting the right results for that metric.

If the marketer has chosen the best guiding metric for growth for their business, they'll find that they can grow their business much faster by focusing more of their resources on the growth of that metric.

Finding a Core Value

Every company wants to provide value to their customers.

To do this, a company has to decide on a core value to focus on that can be quantified with a metric.

For instance, a hotel may want to get as many rooms booked as possible. This is their main metric for success.

If they focus on getting rooms booked, they can look at what it will take to get more rooms booked—which may mean everything from costs to customer satisfaction.

Choosing a North Star Metric

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The interesting thing about a North Star Metric is that it is not the same for every business.

Different businesses have different goals, as well as a different customer base. Because of this, a guiding metric needs to be chosen that will help to increase the chances of success for that specific business.

As you can see with the two examples from earlier, Facebook’s metric is “Daily Active Users,” while a hotel is “Rooms Rented.” This represents the different business models of these businesses and how they will end up making the most money.

Consider which metric would mean the most to your success. Which single metric—if it increased enough—would mean the biggest amount of growth for your business?

From there, you can work on increasing that metric and boosting the success of your business.

Over-Reliance On A North Star Metric

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While having a guiding metric can be extremely useful for the growth of a business, it can also become a detriment if it is relied on too heavily.

 

Here’s why:

One metric isn't everything.

While there are certain metrics that make a lot of sense to pay a good deal of attention to, this doesn’t mean other metrics are useless.

In fact, a marketer should pay attention to a variety of different metrics.

I would suggest you take an inventory of the different metrics that you have to consider. Then, take some time to rank them in order of importance.

The ones that are lowest in the rankings don’t have to be checked very often, but those higher on the rankings should be focused on.

Sure, other high ranking metrics won’t get the same attention as the North Star Metric, but they will still get enough attention that the business doesn’t suffer due to tunnel vision.

Too Much Focus Can Lead to Other Areas Suffering

A marketer doesn’t want any aspect of their business to suffer—and relying solely on one metric will lead to other areas of their business failing.

Make sure that your time is spent looking over some of your top metrics, and see how you can improve the performance of all of those metrics. These supporting metrics will help to prop up the North Star Metric and will lead to better overall success.

Finding a Balance

One of the most important parts of relying on a North Start Metric is actually a little counter-intuitive—finding a balance.

Most people get so excited about finding a guiding metric and working towards building it up, that they lose sight of other areas of their business. Before they know it, their other metrics are suffering—which likely means their business is suffering as well.

Find the right balance between focusing on a North Star Metric and boosting your other top metrics. This balance will create a symbiotic relationship between your metrics, which will boost the success of your business.

Choosing YOUR North Star Metric

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Take some time to make that list I discussed earlier, and really think about what your business is trying to achieve.

Consider your product, and consider your target audience. Then, work through what metrics will be most important to reach your customers and drive sales.

From there, pick a North Star Metric that you know that you’ll be able to follow to guide your business to higher profits and increased growth.

Don’t waste your time sifting through and tweaking every metric. Instead, find the metric that will lead to your success—and build your marketing campaign around that metric.