North Star Metric: North Star metric allows teams to stay focused. It guides priorities to focus on one single aspect of growth -- signups, conversion rate, purchases etc... However, one north star metric is not enough. There has to be a few KPIs that put this North Star Metric in the context. For example:

• What if we optimize for more purchases but those purchases are much lower on average?
• What if we optimize for conversion rate but those leads that convert at much lower rate than previously?
• What if we optimize for completed subscription but much higher of those customers cancel in the first month?

Teams must consider North Star metric in the context and have a few KPIs to help clarify how North Star may impacts other parts of the equation.

Consider the two hypothetical examples shown on the image below:

A: The signup process in option A consist of 10 questions/fields with Conversion Rate at 20%, Close Rate = 30%, and average selling price at $500, generates $30,000 in Total Growth Revenue.

B: The signup process in option B consist of only 5 questions/fields which increases Conversion Rate to 30%. However, even though more people convert significantly less leads are closing. At the end, only $22,500 in Gross Revenue is generated.

If the team's North Star Metric is to increase conversion rate, the impact on other metrics in the equation must be tracked. It's a huge challenge for product teams to find a balance between how much information you ask or how difficult/easy you make your signup process and how these prospects eventually close.