North Star Metric
The single metric that best captures the core value your product delivers to customers — used to align teams and prioritize experiments around customer value creation.
The North Star Metric (NSM) is the answer to "what one number tells us if our business is healthy?" It should capture customer value, not just business extraction. Revenue is not a North Star — it's an output. The North Star is the customer behavior that predicts revenue.
Choosing Your North Star
For Spotify, it's time spent listening. For Airbnb, it's nights booked. For Slack, it's messages sent in teams. For a CRO consultancy, it might be experiments shipped per client per quarter. The right NSM has three properties: it measures value delivery, it correlates with revenue, and teams can influence it through their work.
North Star and Experiment Prioritization
Once you have a North Star, experiment prioritization becomes simpler. Every proposed test should connect to the NSM — either directly or through a well-understood causal chain. "This test will increase form submissions" is not enough. "This test will increase form submissions, which drives qualified pipeline, which drives revenue" connects to the North Star.
Common Mistakes
The most common mistake is choosing a vanity metric (pageviews, registered users) or a lagging indicator (revenue, profit). The second mistake is choosing a metric that's too hard to move in experiments — your NSM should be measurable within a single experiment's time horizon.
Practical Application
Define your North Star Metric and build an input metric tree beneath it. The tree shows the sub-metrics (conversion rate, activation rate, retention rate) that drive the NSM. Each experiment targets a specific input metric, and the tree shows how it connects to the North Star. This eliminates "random acts of testing."