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The North Star metric and the metric tree
6 minutes · 8 steps · workout 4 of 6 in this module
What you'll be able to do
By the end of this workout, you'll be able to choose one North Star metric for a business, break it into input metrics with owners, and use the tree to find which lever to pull.
A first look: One number the whole team can steer by
A North Star metric is the single number that best captures the value customers get from you, and that predicts revenue. It's not revenue itself (too lagging, and it can be inflated by discounts) and not a marketing metric like reach. For a store, it's usually a count of customers doing the thing that matters: customers who ordered in the last 30 days, weekly orders, active subscribers. One North Star doesn't replace your KPIs; it sits on top of them and settles arguments about what to work on.
Example: Northpack: “customers who placed an order in the last 30 days.” Corner Coffee's app: “weekly app orders.” Green Garden: “active subscribers.”
What this workout covers
- One number the whole team can steer by
- The metric tree: the North Star, and what feeds it
- Case: Green Garden's tree shows where it hurts
- Set complete: one star, a few branches, and a warning
A question from this workout: Green Garden's tree shows where it hurts
Green Garden's North Star is monthly purchasing customers. This month the ads team celebrated a big jump in traffic, but the North Star didn't move. Here's the tree.
- Sessions
- 60,000 → 78,000 (+30%)
- Conversion rate
- 3.0% → 2.3%
- Average order value
- $42 → $42
- Purchasing customers
- 1,800 → 1,794
What do you do next?
- Buy more traffic; conversion rate will catch up
- Raise prices to lift average order value
- The new traffic isn't converting. Check where it comes from and what it lands on before spending more
- Change the North Star to sessions, since that's what's growing
Pick your answer first, then open the reasoning below.
Show the answer and the reasoning
Answer: C. The new traffic isn't converting. Check where it comes from and what it lands on before spending more
Sessions went up 30% and conversion rate fell by almost the same share, so the extra visitors aren't buyers: a broad new audience, a viral post, or a landing page that doesn't match the ad. Fix the fit first. The most common mistake is buying more traffic. It scales the problem, and every extra session costs money while the North Star stays flat.
The other steps work the same way: you decide first, then see why each option is right or wrong.
How you practice here
- 3 short concept cards
- 1 multiple-choice question
- 1 campaign case with real-looking numbers
- 1 put-in-order exercise
- 1 guided calculation
- 1 recall question from an earlier workout
Part of the module: Marketing Metrics and KPIs
Knowing which numbers really matter: choosing KPIs, unit economics, profitability and setting realistic targets.
More workouts in this module
- Metric or KPI? Numbers tied to a goal
- CAC, LTV and payback period
- ROAS is not enough: profit margin and break-even ROAS
- Vanity metrics: the likes and followers trap
- Setting realistic targets: past data, seasonality and budget
Programs that include this workout