The single metric that best captures the core value that your product delivers to customers. Optimizing your efforts to grow this metric is key to driving sustainable growth across your full customer base. Your sole focus. Your priority. Your key to growth. We are talking about your north star metric. But is it really best to have only one metric that matters?
Identifying the wrong single metric for optimization can lead you astray. That’s because narrowing your focus too much can hamper efforts to attract prospects who are less likely to churn and to improve your customer experience so they do stick around.
Let’s take a closer look at why you need more than one metric to matter for a retention-focused growth plan.
Too wide of a metric!
North star metrics usually focus only on the big picture. For a more clear picture of what it is, here are a couple of examples: monthly revenue, weekly active users, registrations, page views.
Focusing only on the big picture is useful in some scenarios, but if you’re going to drive sustainable, real growth, you’re going to need to break things down further to more specific business functions and each one’s primary KPIs.
If we take revenue as a reference point, it’s still important to look at where that revenue’s coming from new users, repeated orders, AOV, etc. Without breaking down and tracking those metrics, it can be difficult to identify opportunities for improvement.
Getting more specific about your goals and breaking them down further can also make it easier to lead your team towards reaching them.
Paints an unclear picture!
Because a north star metric takes so much into account, it can make you misinterpret the health of your business. Just because your north star metric is on track doesn’t mean there aren’t big problems on the impacting your company.
Not only does it paint an unclear picture of the more specific metrics it summarizes, it also doesn’t take into account how other, seemingly related and out-of-focus areas of the business can directly impact things longer term.
Instead of looking for one metric to summarize the growth and success of your business and ignoring the different connections and relationships that comprise it, you need to understand the ins and outs of your important success metrics.
It can make you miss warning signs
For example, if you’re focused on sales, revenue, and acquisition, you might neglect the health of your customer support. As you continue to grow without addressing existing customer satisfaction, your customer support processes, how long it takes to solve customer inquiries and other issues, they’ll only be further exacerbated by a continuous stream of new users.
By tracking multiple touch-points throughout the customer journey and measuring multiple indicators of success, you can have a real focus on delivering on your promise to customers instead of hitting a certain number.
That way you can fix any problems before they make a bigger impact, and you can double down on the tactics you see working well.