If you’re unsure where to focus for the biggest impact on your business, a North Star Metric can help. In this article, we’re going to take a look at how to define the North Star Metric for your SaaS.
What is a North Star Metric?
To start off, a North Star Metric is a single metric that is most responsible for the sustainable growth of your business. It enables you to keep track of progress and measure the value you are delivering to your customers.
Therefore, this metric enables you to drive your business forward because it’s aligned with your growth. In fact, it can be seen as the foundation for your growth strategy. Your North Star metric is a measurement that’s most predictive of your company’s long-term success. Let’s take a look at examples of some North Star Metrics.
Intercom – Number of customer interactions
If Intercom is driving conversations between its users and their end customers, it’s delivering value!
Hubspot – Number of weekly active teams
With a CRM like HubSpot, team engagement is critical to success. Measuring on a weekly basis ensures that they’re measuring customers who have adopted the product.
Docusign – Number of signed envelopes
Fairly straightforward for a transactional metric.
Zoom – Weekly hosted meetings
Again, this one is great because it focuses on measuring teams that are demonstrating adoption, filtering out one-off or infrequent users.
You can see that North Star Metrics should encapsulate the value within your product. It should lead to revenue growth and enable you to effectively track progress.
Moving on, let’s take a look at how you can define your own North Star Metric. If you already have one, this is a good chance to revisit and evaluate if it’s really aligned with growth and predictive of your company’s long-term success.
How to establish your North Star Metric
Firstly, let’s take a look at a few things you can do.
- Make a list of items that are essential to the business functioning
- Consider what KPIs and metrics measure key factors
- Consider which metric best encapsulates all of the above
- Build a metric hierarchy, with the North Star metric on top of the pyramid
For example, at UserActive, we might have Software Interfaces Designed as our North Star. Metrics that feed into that are:
- Strategy Sessions Delivered
- Workshops Delivered
- Wireframes produced
- Number of Design Sprints Completed
In short, with a clear NSM, you’ll be able to start measuring the impact of your efforts and monitor success more easily. Also, it helps product teams to get clear on the path to adoption.
Need a hand?
To wrap up, if you need any help with UX/UI design for your software just reach out to us on our Work With Us page to answer a few questions to make sure we’re a good fit for what you need. That way, you can book a free 15 minute, no-obligation consult with us. If you’re confident we’re a good fit for you, book now right here. We design interfaces that are aligned with business objectives in order to drive growth.
Meanwhile, good luck defining a North Star Metric that inspires you to improve your product, get more users and grow.