Your Product’s North Star Metric: How to Find It
How do you identify and measure your product’s North Star Metric? Here are some tips to pick the right NSM...
With so many product metrics out there, it’s easy to drown in a sea of data. What KPIs really matter for monitoring your app’s performance? Which metrics shed the most light on revenue, engagement, and retention?
You also could be at risk of tracking the wrong metrics. This can be a huge time-waster, and present countless missed opportunities for optimization.
To solve these problems, we surveyed more than 500 developers, analysts, and product managers. The results showed us which product metrics are most likely to help you maximize your app’s potential.
Our first point of call was to identify which product metric categories are most prevalent to track for mobile games and apps.
We managed to compile all of the results into five clear categories: Acquisition (18.8%), Activation (14.5%), Engagement (20.3%), Retention (17.4%), and Monetization (20.3%).
As you can see, Engagement and Monetization were the joint-most mentioned types of product metrics. This indicates that maximizing revenue and understanding user behavior are high priorities.
Now that you have a holistic view of which product metrics our surveyors were most enthusiastic about, let’s break down each category and explore the most popular ones.
Standout acquisition product metrics:
Other acquisition product metrics: User Acquisition (UA), Acquisition ROI, Conversion Rate, Install-to-Activation Rate, and CPM (Cost Per Thousand Impressions).
Standout activation product metrics:
Other activation product metrics: First-Time Open Rate, First Key Action, First-Session Durations.
Standout engagement product metrics:
Session Length Example: According to Jon Morgan, CEO of Venture Smarter, “One of our games saw a 30% increase in session length after we introduced new daily challenges.”
Other engagement product metrics: Sessions Per User, Playtime, In-App Events, and social engagement metrics like friend invites and group participation.
Standout retention product metrics:
Day 7 Retention Example: Morgan says, “We improved our 7-day retention rate by 10% by sending personalized push notifications to re-engage users.”
Other retention product metrics: Cohort analysis, in-app/game progression.
Rongzhong Li from Petoi says that “combining these metrics provides a holistic view of what’s working and what needs adjustment, ensuring the game stays engaging and profitable.”
Standout monetization product metrics:
Other monetization product metrics: Average Revenue per Paying User (ARPPU), Conversion Rate, and In-App Purchase Revenue (IAP).
There are plenty of other metrics that submitters in our survey consider extremely important to their app development efforts.
For example, DesignRush’s CTO Gary Kustnetsov claimed that his team is starting to track virality metrics like the K-Factor.
“[This] shows how well current users bring in new users through referrals or social sharing.”
He went on to say that less common metrics like this one have positively impacted the mobile games he has overseen.
Other product metrics mentioned: Funnel Analysis, Customer Satisfaction (CSAT), Net Promoter Score (NPS), and Performance Metrics.
We have compiled the most frequently mentioned metrics across all of the categories that we included in our survey and ranked them based on how frequently respondents mentioned them.
Product Metric | Number of Mentions | Frequency of Mentions (%) | Metric Type |
Average Revenue Per User (ARPU) | 365 | 62.3% | Monetization |
Day 30 Retention | 361 | 61.6% | Retention |
Daily Active Users (DAU) | 353 | 60.2% | Engagement |
Day 1 Retention | 352 | 60.1% | Retention |
Day 7 Retention | 343 | 58.53% | Retention |
Lifetime Value (LTV) | 321 | 54.8% | Monetization |
Churn Rate | 313 | 53.4% | Retention |
Session Length | 312 | 53.3% | Engagement |
Conversion Rate | 293 | 50% | Monetization |
Time-to-Value (TTV) | 276 | 47.1% | Activation |
Cost Per Install (CPI) | 273 | 46.6% | Acquisition |
Monthly Active Users (MAU) | 237 | 40.5% | Engagement |
Overall, the survey results suggest that app developers, product managers, and data analysts prioritize Monetization and Retention metrics the most. These product metrics are seen as strongly focusing on improving user engagement and boosting revenue.
Engagement metrics are also frequently mentioned, suggesting the importance they play in measuring how much users interact with apps.
In mobile apps, product metrics are the data that highlight how app users engage with a mobile app or game, and how those metrics impact business. Typically, product managers, data analysts, app and game marketers, and developers use these metrics to understand how successful their app currently is.
Tracking product metrics for your app or game is essential for many reasons. Benefits include:
In conclusion, consider focusing on monetization and retention metrics such as ARPU and Day 30 Retention. These metrics provide a solid foundation for boosting retention and revenue. Engagement metrics (like Session Length and DAU), also contribute significantly to understanding user behavior.
But as Kuznetsov highlights: “Combining engagement metrics with churn data can show if a certain feature isn’t working well and needs to be adjusted to retain users.”
The key is to combine these metrics and measure what aligns most with your app’s goals.
How do you identify and measure your product’s North Star Metric? Here are some tips to pick the right NSM...