In the past, businesses held most of the cards regarding a transaction. For the customer to receive value from the business, they had to pay up. That’s not the case anymore in today’s highly competitive and complex marketplace. Today, customers can make or break a business.
Because the pendulum has swung so far back, putting most of the power in the customer’s hands, organizations have had to start thinking more in-depth about how they reach their buyers and grow revenues before, during and after the sale.
Finding the right North Star Metric for an organization isn’t as easy as deciding on a metric to follow. It requires depth, detail, and discernment around what truly matters to a company. Getting there requires you to ask the right questions and filter out your idea for metrics based on the following criteria:
The process of finding your organization’s North Star Metric isn’t a back-of-the-napkin exercise. Choosing the wrong metric can put your company on the wrong trajectory, causing more damage than good. Uncovering the right North Star Metric requires that you unravel what it will take for your company to continue up the S Curve of Growth.
A quality North Star Metric should start with the end in mind by focusing on retention. Retention is what will drive predictable growth through the bow tie funnel. It’s here where organizations can get deeper into why customers stay and what inspires cohorts of customers to continue buying from the business.
Behavioral frameworks, like StoryVesting, layer and align the behaviors of your business and your customer. Bringing these internal and external behaviors closer together empowers you to track forward momentum using nuanced data about how people make decisions.
Opting for a singular North Star Metric means you can only look at one area of the business. This limited dimension of what’s happening could leave other key areas in the dark. By choosing a constellation of metrics in motion from department to department, you can become more predictive and have a clearer viewpoint of what’s happening across the organization.
Developing a North Star Metric for your organization starts with researching your audience’s behaviors. It requires that you segment the areas between emotional and logical reasoning at every stage of the buyer’s journey. In doing so, you can prioritize which areas are most important concerning your competition, current offers, and conversion micro-moments.
With those in mind, it’s time to prioritize which emotional and logical drivers cause a person to stay based on their customer journey. Identifying the friction points where conversions drop off or retention plummets can clue you into the areas that matter most to your customer and, thereby, your organization.
Once you have your North Star Metric or the set of motion metrics, you will keep that same metric until you reach another inflection point on the S Curve of Growth.
The amount of time it takes to close a sale.
Changes in the sales cycle as new strategies are implemented, and new goals are determined.
How much can you earn from your customers over their lifetime?
The ratio determines whether you allocate the right resources to drive long-term growth effectively.
Engagement from your business, marketing content, and/or your deliverable.
How much you bring in per employee or contractor on your team?
The effectiveness of the alignment between your value proposition, operations, and strategy.
The profitability of each employee on your team.
Your organization’s momentum and the viability of your model based on that momentum.
How much revenue can you grow monthly per client?
How well your growth levers are working on expanding revenue without increasing CAC?
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