What Is a North Star Metric and How to Define It
What is a North Star Metric?
A North Star Metric (NSM) is the single most important metric that best captures the core value your product delivers to customers. It represents long-term success and acts as a guiding light for the entire organization.
For example, for Slack it might be “messages sent,” for Airbnb “nights booked,” and for Customerscore.io, it could be “upsell-ready customers identified.”
Why is the North Star Metric important?
It aligns your team toward a common goal
A well-chosen NSM brings focus across product, sales, marketing, and customer success. It prevents teams from optimizing for vanity metrics and steers everyone toward real value creation.
It reflects customer value and product impact
Unlike surface-level metrics like logins or pageviews, a true NSM ties directly to the value your users get from the product. The more the metric grows, the more users are benefiting.
It helps with prioritization and tradeoffs
When resources are limited (which they always are), having a single metric makes it easier to decide what to build, improve, or cut.
It powers customer scoring models
At Customerscore.io, we often use a company's North Star Metric as the foundation for customer health scoring. Accounts that consistently contribute to or grow the NSM are typically more engaged, higher-value, and less likely to churn.
Tying health scores to the NSM allows customer success teams to focus on what really matters: behavior linked to actual product value.
It drives growth loops
Companies that optimize around their NSM build powerful feedback loops. Increased value drives higher engagement, leading to referrals, upsells, and more value — compounding growth.
Why your North Star Metric shouldn’t be MRR or revenue
Monthly Recurring Revenue (MRR) and other financial metrics are critical to understanding business performance, but they are lagging indicators — not value signals.
Your North Star Metric should measure the value your product delivers to customers, not the value your business receives from them. MRR reflects success, but it doesn’t help teams build or deliver better outcomes for users.
A customer can pay you while getting zero value. Your NSM should spotlight when users are succeeding — that’s what drives sustainable growth, retention, and expansion.
How to choose your North Star Metric
- It must reflect delivered value — not just usage.
- It should be leading, not lagging — something you can influence early.
- It must be measurable and simple — easy for teams to rally behind.
- It needs to correlate with retention and revenue.
Example North Star Metrics:
- Notion – Documents created
- Canva – Designs exported
- Spotify – Minutes listened
How to find your North Star Metric
Finding your NSM starts with understanding your customers and the true value they get from your product. Here’s a step-by-step process to help you identify it:
- Talk to your best customers. Ask: What do they value most? What makes them come back? What actions do they repeat?
- Analyze behavior before expansion or retention. Look for common actions taken by customers who upgrade or stick around longer.
- List core value moments in your product. Identify the top 3-5 product events that represent meaningful progress (e.g., export, invite, publish).
- Look for a repeatable, countable event. Your NSM should grow as customers succeed — and be trackable across your base.
- Test correlation with retention & revenue. Run a simple analysis: customers who do more of X are also more likely to stay or pay more.
Pro tip: If you’re using a customer scoring tool like Customerscore.io, your NSM can often be built into the health scoring model — making it easier to track, alert on, and drive action across your team.
FAQ
Can I have more than one North Star Metric?
No. You can track many metrics, but the NSM is singular to ensure clarity and focus.
Is the North Star Metric the same as a KPI?
Not exactly. KPIs measure performance in specific areas. The NSM measures the overall value you’re delivering.
What if our NSM changes over time?
It can. As your business evolves or your understanding of value matures, it's okay to refine your NSM.
How do I use the NSM in customer scoring?
Track how individual accounts contribute to or lag behind the NSM. Use it as a predictive input in health scores to spot churn or upsell opportunities.