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What is a North Star KPI & why should you care?

Digital Growth
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So you’ve nailed down a growth strategy and you’ve taken the steps to begin implementing it into your business - time to kick back, relax, and watch your empire expand, right?

Not exactly. 

Ferris Bueller taught us that life moves pretty fast, and if we don’t stop to look around every once in a while we might miss it. And a similar rule applies to business: if you’re not regularly stopping to ‘look around’ and measure your performance against your goals, you might not notice when your plans have begun to derail.

And that’s what makes data so integral to business growth. Metrics give you invaluable insight into how your business is performing in the here and now and what trajectory you’re on for the future. And the good news is, there’s a whole lot of data at your disposal. 

But to quote Mark Twain, “too much of anything is bad” - and while the second half of that quote, “but too much good whiskey is barely enough”, is certainly up for debate, the first half definitely rings true. 

You’re no doubt already tracking a range of key performance metrics (KPIs) across different areas of your business, but with so many different aspects of performance to measure, this can often result in a convoluted collection of data. For example, this guide offers a mammoth 170 examples of different KPIs you could choose from. 

While adopting processes like data visualisation can help bring some method to this madness, it’s still very challenging to extract true value from all this data. You need to be able to understand what all these KPIs mean for your overall business performance, and without this ability to track progress efficiently and effectively by deriving meaning from your data, you risk losing focus and direction and missing vital opportunities for business growth. 

And that’s not just at the top of your business; every team member should have the ability to understand how their efforts are contributing to moving your business forward, and what they need to do to improve this further. 

And that’s where a North Star KPI comes into play. 

Your North Star KPI is the one metric that should be placed at the very heart of your digital growth strategy. It’s the primary outcome that measures the success of your business against its main objective, enabling you to better judge overall performance based on the impact of your strategy.

In short, it’s a more effective way of gaining a proper understanding of the bigger picture. 

It’s important to understand that this North Star isn’t your business goals themselves, but rather the metric that guides you towards these objectives. You should think of objectives like revenue, retention and the likes as the goals you’d like to accomplish, and your North Star as the metric spurring you towards achieving these. 

But you can’t focus exclusively on your North Star - this metric is simply too broad to influence directly. As such, you must consider how your individual KPIs all feed into your North Star, as these performance indicators should all be capable of driving a positive impact on the primary metric you’ve identified. 

To think of it another way, imagine you’re a football team. Your main objective is to win your next match, meaning your North Star is the scoreline - after all, this is the ultimate metric that determines if you win or lose. But you also need to consider how you’re going to win the game - what tactics will you adopt to positively impact the scoreline? These tactics are your other KPIs feeding into your North Star; the aspects you can directly influence to impact your North Star metric and drive you further towards your overall goal.

And this is what makes a North Star so effective in driving vision, strategy, and decisions - it offers you a central metric that aligns your whole company around a common goal, helping you to stay on course, be more informed, and ultimately drive more growth. 

So why should you care?

Most business objectives are centred around revenue and cost - after all, these are the foundations vital to successful and sustainable growth. 

But these goals are ultimately driven by the value you provide to your customer, and as a unified metric that captures the effect all your team is having on business objectives, a North Star metric is the best indication of the value you’re providing. 

Your North Star metric is ultimately measuring how effectively your business is driving that ‘aha!-moment’ in customers. No, no, not the 80s band, but rather the moment in which your customers recognise the value of your product or service. By identifying what the ‘aha!-moment’ is among your users and setting your North Star metric around it, you can successfully focus your team around a metric that ensures you’re driving real, tangible value that skyrockets your growth higher than the chorus of ‘Take On Me’. 

Now here’s the catch: it’s important to note that the ‘aha!-moment’ itself isn’t the North Star. Perhaps the most well-known example of this is Facebook’s ‘seven friends in 10 days’ - a concept first shared by former Facebook executive Chamath Palihapitiya back in 2013. This proposed that, if a user was to make seven friends within 10 days on the platform, this would act as the tipping point in which they realised the value of the platform and became a recurrent user. But in this example, the North Star metric isn’t the number of friends a user adds, nor the amount of time in which they do it. It’s what they become upon reaching this point of realisation: an active user. Facebook’s North Star metric is therefore monthly active users, as it's the engagement of their users that ultimately drives the platform’s growth. 

In the world of eCommerce, growth relies on retention, and therefore there’s a greater focus on repeat purchase behaviours - Amazon’s North Star metric, for example, is ‘monthly purchases per user’. While smaller eCommerce brands and SMEs may not be able to expect recurring monthly custom at the same rate as Amazon, focusing on a North Star KPI like ‘monthly returning customers’ spurs an emphasis on growth through customer loyalty, referrals, and users returning to your ecosystem. 

And in supply and demand industries like transportation, the North Star metric centres around solving a customer problem when the demand arises. If we take Uber as an example here, not only do they have to deliver value based on this supply-demand, but as a two-sided platform, they also need to deliver value to both drivers and riders: Uber’s North Star metric therefore is ‘rides booked’. Similarly, when shifting to the accommodation industry, ‘number of nights booked’ acts as an informed North Star KPI for Airbnb by successfully measuring value provided to both host and guest. 

It’s all about understanding customer behaviour and choosing a North Star metric that increments each time you deliver value to your customer. This is why it’s important to avoid monetary measurements like revenue, costs, and margins - these don’t reflect what matters to your customers and can’t be directly influenced by everyone in your team. Therefore, these metrics aren’t a reflection of how successfully or sustainably you’re delivering value to customers as a business. 

And establishing this way of thinking has a whole host of advantages. A North Star metric doesn’t just measure progress, but also promotes the internal culture that drives this progress by uniting teams and driving more insightful and dynamic thinking. 

As a result, identifying a North Star metric and placing it at the heart of your internal processes and decision making sees you benefit from:

  • Better alignment and focus: your North Star should be something that every member of your team can influence in some form, which means each area of your business is united by a singular focus. This ensures all your efforts, from sales and marketing to customer support and production, are aligned and working towards a unified goal 
  • Greater impact: emphasising the importance of customer experience guarantees your efforts have a greater impact, accelerating your growth by delivering more value, more effectively 
  • Communication and collaboration: by uniting your team around a North Star metric, cross-departmental collaboration and communication is improved. Not only do teams gain a better understanding of what each other is working towards (and why), but they’re also able to make more informed decisions around prioritising the activities that have the greatest impact 
  • Better reporting: reporting is hard work. With so much data available to you, it’s key you understand what the business goals are in order to report the relevant data, and just as importantly, understand how it translates. By identifying your North Star metric and the KPIs that feed into it, you can avoid feeling overwhelmed by masses of data by focusing on the metrics that really matter to your strategy, ensuring you remain on-track, in-the-know, and well informed of any opportunities for further growth you may uncover along the way 
  • Accountability: a North Star metric improves transparency and accountability in your business from the top down. Not only is it clear at a glance how your business is faring against its primary objectives, but it’s also easier for teams to be held accountable for the outcomes they have influenced  

How to find your North Star KPI

With the advantages laid out, you’re no doubt wondering how you can find your own company-specific North Star KPI. 

While the metric you use as your North Star will ultimately be dictated by the type of your business you are, what your primary objective is, and how you go about delivering value to your customer, most North Star KPIs fit into one of the following categories:

  • Spurring customer growth: number of orders, order per customer etc.
  • Accelerating usage growth: monthly active users, number of views etc.
  • Empowering engagement growth: number of likes or comments, number of posts etc.
  • Improving efficiency and productivity: customer acquisition, customer retention etc. 

That being said, it’s incredibly important you identify the North Star KPI that’s unique to you. Sure, borrowing somebody else’s playbook might save you some time in the short-term, but this will have significant implications on how well you can measure your value deliverance, ultimately hindering your growth strategy long-term. After all, how you deliver to your customers is rarely the same as how another business offers value to theirs. 

So where do you start?

Step 1: Define what makes your business successful

For you to be able to measure your success, you must first define what success looks like for your business. To ensure this definition is well-informed and strategically-driven, avoid making assumptions by breaking this success down into three distinct areas: 

  • Your primary business objective: what is the main goal of your growth strategy? This is the objective that you will measure your North Star against to judge your progress and inspire direction 
  • Your customer value proposition: why do customers use your product or service? Your North Star KPI should reflect the value you create for your customers, and your value proposition will help you to understand how successful you are in delivering this promise to your customers
  • Your customer’s ‘aha!-moment’: at what point do your customers understand the value of your product or service? This will help you define the point of success, and better uncover the steps you need to take in order to reach it

Step 2: Choose which KPIs measure that ‘success’

Now that you’ve laid out what success looks like for your business, the next step is breaking down how you’ll measure your progress towards it. This involves identifying the KPIs across all areas of your business, and mapping out how these translate to real customer value. 

Remember that the aim of a North Star KPI is to unite your entire business by aligning teams around a core goal, so be sure to promote involvement from employees across all areas of your company at this stage of the process. 

It’s likely that different teams will have different customer knowledge, and it’s vital that you leverage all of these insights to paint a proper picture of how you can influence success. Explore the KPIs each team measure their own success by, and then evaluate the commonalities across this data. 

Step 3: Prioritise the most crucial KPIs

As we’ve already touched upon, there are a whole lot of KPIs to choose from, meaning you’ll likely still have a long list of data at this stage. Now’s the time to start separating the ‘nice to haves’ from the crucial metrics. 

Which of your KPIs contribute to the direct value you deliver? Identify these metrics as your priority, and segment them based on the successes they contribute to. 

Be sure to steer well clear of vanity metrics here, too. While this data might look good on paper and make you feel better about your business, these types of metrics are often easy to manipulate and inflate, meaning they offer little meaningful insight. In fact, they don’t reflect customer value or measure progress in any shape, way or form. 

And although this might not sound like too big of a deal, using vanity metrics to inform your North Star can actually have significant consequences. Vanity metrics can give you a false sense of success that misaligns your North Star with your actual progress, misguiding strategies and contributing to ill-informed decisions as a result. A good example of this is YouTube, which switched its North Star from view count to watch time after realising this was a better indication of user engagement and the value they were receiving from the platform. So with that in mind, sieve out the vanity metrics in favour of outcome KPIs that are directly tied to your product value and business goals.

Step 4: Identify your North Star (and how other KPIs feed into it)

With your objectives established and your primary outcome-based KPIs collected, you’re now in a position to identify your North Star. 

Remember that this metric should speak to your business’s unique value proposition, and shouldn’t be something overly complex - every member of your team should be able to contribute towards it and influence the outcome in some way. 

Pick a metric that is simple, measurable, and actionable to be your North Star, and ensure it’s something that properly represents both the value you provide your customers and the objectives you wish to achieve. 

Once established, also look to set out your secondary metrics; these are those other KPIs that feed into your North Star and help you to successfully quantify it. This is a good opportunity to once again open it up to the floor and collaborate with your team, asking each department to identify the leading indicators that they can directly influence, and mapping out exactly what impacts these have on your North Star. 

These KPIs should be things that can be actively measured and improved, and help you to predict your North Star by suggesting something about your potential success. As a result, they enable you to iterate and learn quickly as a team, better understanding the direct actions you need to take to impact performance and accelerate growth right across your business. 


Too long to read all at once? Too busy going through those countless KPIs? We’ve got you covered - here are the most important takeaways from this post:

  • Your North Star KPI is the primary outcome that measures the success of your business against its main objective, enabling you to better judge overall performance based on the impact of your strategy
  • Consider how your individual KPIs all feed into your North Star, as these performance indicators should all be capable of driving a positive impact on the primary metric you’ve identified
  • Your North Star metric is ultimately measuring how effectively your business is driving that ‘aha!-moment’ in customers - the moment in which your customers recognise the value of your product or service
  • Avoid monetary measurements like revenue, costs, and margins - these don’t reflect what matters to your customers and can’t be directly influenced by everyone in your team
  • A North Star metrics offers your team better alignment and focus, better communication and collaboration, improved reporting, more accountability, and the potential to make greater impact 
  • To find your North Star, first define what makes your business successful and identify the KPIs that measure it. Then prioritise these KPIs, filtering out vanity metrics in favour of outcome metrics, and identify the one that matters most 
  • Pick a metric that is simple, measurable, and actionable to be your North Star, and ensure it’s something that properly represents both the value you provide your customers and the objectives you wish to achieve

As a business or team leader, it’s your job to rally your team around your North Star and keep everyone working towards positively impacting this metric. It’s your job to make it real, so don’t be afraid to talk about it incessantly; take a few minutes in each morning meeting to ask each team member what they’re doing today to drive the North Star. Not only does this keep everyone engaged and motivated in your team, but it also ensures you spur the growth you want to see by actively delivering value to your customers day after day. 

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