North Star Metric - Mailrelay

Measuring is essential for any company.

The problem is that we often measure too much.

Visits, clicks, opens, followers, sales, sign-ups, leads, conversions, time on page, downloads… There is so much data available that it is easy to lose focus and end up optimizing metrics that do not always reflect real business growth.

That is where the North Star Metric comes in.

The North Star Metric, also known as NSM or the north star metric, helps a company identify the main metric that represents the value it delivers to its customers and that, at the same time, is connected to its long-term growth.

It is not about picking a nice-looking metric for a report. It is about finding the compass that can guide decisions in product, marketing, sales, customer support and management.

In this article we are going to look at what a North Star Metric is, why it matters, how it differs from a KPI, how to define it and how to combine it with email marketing to drive a more focused strategy.

What is a North Star Metric?

A North Star Metric is the main metric that best represents the value a company offers its customers and that works as a guide for its sustainable growth.

Put simply: it is the metric that tells you whether your business is moving in the right direction.

The idea comes from the North Star, which for centuries has served as a reference to find your way. In a company, the North Star works in a similar way: it helps every team know which direction to row in.

A good North Star Metric does not only measure activity. It measures value.

For example, a learning app should not look only at registered users. That metric can grow even if users do not learn anything. It would be far more useful to measure completed lessons, useful learning time or users who keep up a weekly routine.

The difference matters.

A metric such as “new sign-ups” can indicate acquisition. But a North Star should reflect whether users are getting real value from the product or service.

That is why a good NSM usually meets three conditions:

It is related to the value the customer receives.
It is connected to the growth of the business.
It can be measured consistently and acted upon.

If a metric grows but does not improve the customer experience or drive the business, it probably is not a good North Star.

Why is it important to have an NSM in your company?

Having an NSM is important because it helps reduce the noise.

In a company, each department usually has its own metrics. Marketing may look at leads. Sales may look at closed deals. Product may look at usage. Customer support may look at satisfaction. Management may look at revenue.

All of those metrics are useful, but if there is no shared metric, each team can move in a different direction.

The North Star Metric is there to align everyone.

It does not mean that the marketing team stops measuring campaigns or that sales stops measuring opportunities. It means that all of those secondary metrics should contribute to one main metric.

For example, if the NSM of a SaaS platform were “active users who complete a key action every week”, marketing would have to attract users with real potential, product would have to make that action easier, customer support would have to solve the doubts that block usage and sales would have to bring in accounts that fit that behavior.

The NSM also helps you make better decisions. When there are doubts about what to prioritize, you can ask yourself: “does this help move our North Star?”.

If the answer is no, maybe it is not that important.

Its main benefits are:

Alignment: every team works towards the same direction.
Focus: you avoid chasing too many metrics at once.
Sustainable growth: the company measures real value, not just one-off results.
Better decision-making: it helps prioritize projects, campaigns and resources.
Customer focus: it forces you to think about what value the user really receives.
Transparency: the whole team can understand what growing means for the company.

A good North Star does not replace strategy. It sums it up in a metric that is easy to understand.

What is the difference between a KPI and a North Star Metric?

A KPI and a North Star Metric are not the same thing, although both are used to measure.

A KPI is a key performance indicator. It can measure the result of an action, a channel, a team or a specific campaign.

For example:

Email open rate.
Number of leads generated.
Conversion rate.
Cost per acquisition.
Monthly sales.
Organic traffic.
Customer retention.

All of this data can be important, but not all of it can be the North Star.

The North Star Metric is more strategic. It represents the main value the company delivers to the customer and works as an overall guide for growth.

The main difference is this:

A KPI measures one part of performance.
A North Star Metric measures the overall direction of the business.

For example, in an email marketing campaign, the open rate is a KPI. Clicks are a KPI too. The conversions generated by that campaign can also be a KPI.

But if your company is an online training platform, your North Star may not be any of those metrics. It could be “number of students who complete a useful lesson every week”.

KPIs help you understand whether your actions are working. The North Star helps you understand whether the company is delivering value and growing in a healthy way.

Ideally, KPIs should feed the NSM.

In other words, marketing, sales, product and customer support metrics should act as levers that help move the main metric.

How to define your north star metric?

Defining your north star metric takes more than picking the number you like best.

The NSM has to come from one key question: what is the main value we deliver to the customer and how can we measure it?

From there, you can follow these steps.

Identify the main value your customer receives

The first step is to understand why your customers use your product or service.

Do not think about revenue, visits or leads yet. Think about value.

What does the customer get thanks to you? Do they save time? Do they sell more? Do they learn something? Are they entertained? Do they manage their work better? Do they find a solution faster?

For example, on a streaming platform the value is not in signing up. It is in watching content. In an email marketing tool, the value is not only in creating an account. It is in sending campaigns that get delivered, get opened and generate results.

Your North Star should be close to that moment of value.

Connect that value to the growth of the business

A good North Star Metric should benefit the customer, but it should also be connected to the growth of the company.

If the metric improves, the business should improve too.

For example, if a SaaS tool measures “users who complete a key action every week”, that metric is likely to be related to retention, satisfaction and future renewals.

If instead it only measures “registered users”, it may look like growth even though many users never use the tool again.

The NSM has to avoid that kind of illusion.

It should not be a vanity metric. It should be a metric that indicates real value and growth potential.

Analyze the customer journey

The next step is to review the customer journey.

From the moment someone discovers your brand until they become a loyal customer, there are different key moments: acquisition, activation, usage, purchase, repeat purchase, referral or renewal.

Your North Star should sit at the point where the customer experiences the main value.

For example, in an ecommerce it can be the first completed purchase or the number of customers who buy again. In a productivity app, it can be the number of completed tasks. On an educational platform, it can be the number of completed lessons.

Not every business delivers value at the same moment. That is why not all north star metrics can be the same.

Choose a metric that is measurable and easy to understand

A North Star Metric has to be clear.

If the team does not understand it, it will not help align decisions.

It should be possible to explain it in one sentence and to measure it on a recurring basis. It should also be available often enough for you to act on it.

For example:

Active customers who make a weekly purchase.
Users who complete a key action each month.
Hours of content consumed by active users.
Projects completed inside the platform.
Campaigns sent with real engagement.
Lessons completed by active students.

The important thing is that it is not an abstract metric or one that is impossible to track.

If you need three meetings to explain what it means, it probably is not a good North Star.

Break the NSM down into secondary metrics

The North Star does not work alone.

To improve it, you need to understand which secondary metrics drive it. These metrics are usually called input metrics.

For example, if your NSM is “customers who complete a first weekly purchase”, some secondary metrics could be:

Visits to the product page.
Add-to-cart events.
Completed checkout rate.
Cart recovery emails.
Website loading time.
Clicks on promotional campaigns.
Repeat purchases from previous customers.

These metrics help each team know how they can contribute.

Marketing can improve acquisition. Product can improve the experience. Sales can improve conversion. Customer support can reduce friction.

The NSM sets the direction. The secondary metrics explain how to move forward.

Assign owners and review the metric regularly

A North Star Metric only works if it is actually used.

It is not enough to define it in a presentation and then forget about it.

You need to assign owners, review how it evolves and connect it to day-to-day decisions.

For example, if a marketing campaign increases leads but does not improve activation, maybe it is not helping the North Star. If a new feature generates more recurring usage, it probably is contributing.

How often you review it will depend on the business. It can be weekly, monthly or quarterly. The important thing is that the metric is reviewed often enough to make decisions.

Adjust the North Star if the business evolves

The North Star Metric should not change every month, but it does not have to last forever either.

If your company changes its business model, launches a new flagship product or enters a different market, the NSM may need to be reviewed.

An early-stage startup can measure activation. A more mature company can focus on retention or customer value. A business with several products may need one main metric and supporting metrics.

The important thing is that the North Star keeps reflecting the real value you deliver.

If it stops doing so, it needs to be reviewed.

Best north star metric examples: success stories

Examples help you understand better how a North Star Metric works in practice.

There is no universal metric that works for every company. Each business has to find its own, based on its value proposition, revenue model and customer behavior.

Netflix: watch time

On a platform like Netflix, a metric related to watch time makes a lot of sense.

The value the user receives is in finding content they are interested in and watching it. If users consume more content, they probably perceive more value, keep their subscription and recommend the platform.

That is why a North Star tied to hours watched reflects the value delivered better than a metric like registered users.

Spotify: hours played

Spotify can measure its value through listening time or hours played.

The more a user listens, the more integrated the platform is into their daily life. This can be related to retention, satisfaction and recurrence.

It is not just about having users. It is about those users using the product consistently.

Airbnb: nights booked

At Airbnb, a metric like nights booked reflects the value of the platform very well.

For travelers, it means finding accommodation. For hosts, it means generating income. For Airbnb, it means the platform is connecting supply and demand.

It is a metric that brings together customer value and business growth.

Amazon: completed purchases

In an ecommerce like Amazon, completed purchases are a clear signal of value.

The user finds what they need, trusts the platform and finishes the purchase. This metric is connected to user experience, catalog, price, logistics and recurrence.

That is why a North Star related to purchases can help align many different teams.

Duolingo: completed lessons

Duolingo is a good example of an educational product.

The value is not in signing up, but in learning and keeping the habit. That is why a metric like completed lessons can better represent the real progress of the user.

If users complete lessons on a recurring basis, the platform is delivering on its promise: helping people learn languages consistently.

Ecommerce: customers who buy again

In a small or medium ecommerce, a good North Star could be “customers who buy again within a given period”.

Why?

Because buying again usually indicates satisfaction, trust and perceived value. It is not just about acquiring customers once, but about getting them to come back.

What is more, this metric can be connected to email marketing, customer support, logistics, product quality and segmented promotions.

The importance of combining your plan with email marketing

The North Star Metric helps you define where your company should grow.

But to move that metric you need specific channels and actions.

This is where email marketing can play a very important role.

Email lets you support the user at different moments of the journey: activation, education, conversion, retention, reactivation or loyalty.

For example, if your North Star is “users who complete a key action every week”, you can use email marketing to remind them of that action, explain how to do it, send tips and win back users who stopped halfway.

If your NSM is related to repeat purchases, you can use segmented campaigns, personalized recommendations, promotions, post-purchase emails and loyalty automations.

If your North Star is related to training, you can send educational sequences, progress reminders, complementary content or motivational emails.

Email marketing can help you move secondary metrics such as:

Activation of new users.
Clicks to a key feature.
Cart recovery.
Repeat purchases.
Retention.
Recurring usage.
Reactivation of inactive users.
Campaign engagement.
Attendance at webinars or events.

The key is not to send emails without a strategy.

Every campaign should be connected to a specific metric and, whenever possible, to the North Star of the company.

Can a company have more than one North Star Metric?

Ideally, a company should have a single main North Star Metric.

The reason is simple: if you have too many north stars, you stop having a clear direction.

The power of the NSM lies precisely in simplifying. It helps every team understand what the main goal is and how they contribute to it.

That said, there are cases where a company may need more than one main metric.

This happens especially in complex businesses, with several products, different types of customers or very different revenue models.

For example, a platform that has a marketplace, a SaaS product and a paid community could need a global North Star and main metrics per business unit.

In that case, the recommended approach is to keep a clear hierarchy:

One main North Star Metric for the company.
Supporting metrics per product, channel or team.
Input metrics that help move each main metric.
Tactical KPIs for specific actions.

That way you avoid losing focus, but you keep enough detail to make decisions.

In short: yes, a company can have more than one North Star Metric if its model justifies it. But if you are just starting out, it is best to choose one and learn to work with it.

Mailrelay: up to 80,000 free emails for your 360 digital marketing campaigns

Defining your North Star Metric is only the first step.

Then you need actions that help move it.

And email marketing can be one of the most effective channels to achieve that.

With Mailrelay you can create email marketing campaigns, newsletters, automations and segmented communications to support your users throughout the whole journey: from the first contact to activation, purchase, loyalty or reactivation.

If your north star metric is related to retention, repeat purchases, activation or recurring usage, email can help you keep the relationship with your contacts alive.

With Mailrelay you get:

Up to 80,000 emails free every month.
Up to 20,000 contacts.
No credit card required.
No advertising in your emails.
Contact segmentation.
Automations.
Campaign statistics.
Specialized technical support.

That way you can connect your email marketing campaigns to the real goals of your business.

Because growing is not just about measuring more.

It is about measuring better, choosing a good North Star and using the right channels to move towards it.

[Create your free Mailrelay account and start sending email marketing campaigns aligned with your strategy]