Loading…

The North Star metric and the metric tree

6 minutes, 8 steps, workout 4 of 6 in this module

A new team lead asks everyone to name the one number that shows the business is healthy, and gets five different answers: revenue, signups, traffic, app opens, followers. Teams that never settle this pull in opposite directions, and each of them can prove it had a good month. If you can pick a single North Star and trace it down to the inputs people actually control, the weekly meeting stops being a contest of dashboards and turns into a decision about which lever to pull first.

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

  1. 1One number the whole team can steer by
  2. 2The metric tree: the North Star, and what feeds it
  3. 3Case: Green Garden's tree shows where it hurts
  4. 4Set 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?

  1. Buy more traffic; conversion rate will catch up
  2. Raise prices to lift average order value
  3. The new traffic isn't converting. Check where it comes from and what it lands on before spending more
  4. 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