Ask yourself: Are your customers getting the most out of your product? Maybe you’ve built an app, or a mobile game, or maybe even a new feature. It can be challenging to know how well you’re meeting user needs.
In product management, a North Star Metric (NSM) can be a powerful guide. But it can also lead companies astray if not handled properly. You risk focusing on “vanity metrics” that look promising but provide no actionable insights.
Identifying that first North Star Metric can be a daunting task. But with the right steps and tools, you can use the right data to drive long-term product success and growth.
To understand North Star Metrics, let’s first explore some real-world data. These statistics show how engagement and revenue trends influence NSMs across mobile games and apps:
These are just some of the North Star Metrics that companies focus on when measuring their product’s success. They’re chosen to align with revenue opportunities, user behavior patterns, and strategic business goals.
According to Sean Ellis, a North Star Metric (NSM) is “the single metric that best captures the core value that your product delivers to customers.”
It’s one measurement that can best indicate a company’s (and its product’s) long-term success. It bridges the gap between solving customer problems and generating revenue.
A North Star metric is integral to product management. It influences decision-making, devising strategies, and allocating resources.
For product managers, it’s essential to pinpoint what your company’s north star metric should be. Why? Well for many reasons:
A North Star Metric should help reflect customer value, lead to revenue, and measure progress. If an entire company contributes to this metric, then it’s likelier to grow. But there’s more to it than that.
What are your business goals? Are you trying to increase revenue? Boost engagement? Get more customers? Your answer will influence your North Star Metric.
Here are some typical examples that are most relevant to mobile games and apps:
| Business Goal | North Star Metrics (NSMs) |
| Boosting user retention | – Daily Active Users (DAU) – Monthly Active Users (MAU) |
| Increasing engagement | – Time spent in app/game per user – Daily Active Users (DAU) – Monthly Active Users (MAU) |
| Driving revenue growth | – Average Revenue Per User (ARPU) – Number of In-App Purchases – Lifetime Value (LTV) |
| Encourage in-app interactions | – Number of Core Actions per User (e.g. Chats initiated, levels completed, challenges participated) |
| Grow user base | – Number of new downloads/installs – Customer Retention Rate |
A North Star Metric shouldn’t just drive business success. It should contribute to your customer’s satisfaction. If your product delivers value and positively impacts your users’ lives, chances are you’re focusing on the right North Star Metric.
Never build your business decisions around a “vanity metric.” It might look useful, but it doesn’t generate any business results.
For example, Facebook depends on user engagement. Its North Star Metric is Monthly Active Users (MAU). Monthly social engagement and ad revenue significantly impact the platform’s success.
However, if Facebook used Monthly User Signups as their NSM, it wouldn’t have the same impact. User signups are only one step in the funnel. Facebook needs signed-up users to engage with the platform, allowing it to charge advertisers.
A North Star Metric must be quantitative. In other words, measurable. How much is your product improving user experience and helping you reach business goals?
“Increasing user enjoyment” is way too subjective and is impossible to measure. While “Daily Active Users (DAU)” tracks how many users engage with your game/app daily. This gives you an objective measurement of user enjoyment and engagement.
It’s not enough to judge success based on previous achievements. You need to be able to rely on a North Star Metric that indicates
Lagging indicators for games and apps include Monthly Revenue or ARPU. While they show how much a product earned, they don’t indicate future user behavior or engagement.
In this case, DAU helps predict future revenue potential through user retention and engagement trends.
Here are some of the key NSMs of some of the world’s most popular apps:
To identify which North Star Metric your company should set its sights on, consider taking these steps.
At some point, you’ll have an “aha” moment when you see how users are benefiting from your product and become loyal customers. This moment might come from user feedback, surveys, and customer interviews.
Duolingo identified a key user success moment early on in its development. They saw the value of users completing their first language challenge.
How did they identify their user success moment? Through surveys and user feedback, Duolingo saw a strong sense of achievement among users. They were motivated to continue learning after completing their first milestone.
Once you’ve found that success moment, you can start translating it into a measurable North Star Metric.
And it needs to be measured routinely to generate meaningful, actionable results. Most NSMs can be measured either daily, weekly, or monthly.
By leveraging this discovery, Duolingo identified their North Star Metric as User Daily Active Usage (or Daily Streaks). This helped provide valuable insights into user motivation and engagement. Their developers started implementing reward systems such as streak tracking and badges.
To measure your NSM effectively, you must use relevant monitoring and analytics solutions. This tool should allow you to explore data, segment users, detect anomalies, and generate actionable insights.
The following table includes popular monitoring tools and typical North Star Metrics they’re used for:
| Monitoring tool | Relevant NSMs | Purpose |
| Google Analytics | DAU, MAU, Number of new downloads/installs | Tracks daily/monthly user trends, user acquisition, and engagement. |
| Amplitude | DAU, MAU, Time spent in app/game per user, LTV | Analyzes retention trends, session lengths, and user behavior patterns. |
| Mixpanel | DAU, MAU, ARPU, LTV, RR | Analyzes retention trends, engagement, user funnels, and revenue. |
| GameAnalytics | Time spent in app/game per user, Number of core actions per user, DAU | Monitors user interactions, user behavior, and session duration. |
| AppsFlyer | ARPU, In-App Purchases, Number of new downloads/installs | Tracks revenue, monetization patterns, and user acquisition. |
Identifying and measuring your North Star Metric might not be easy. However, it’s essential to ensure all your company’s teams work towards the same business goals.
In some cases, it’s reasonable to have just one NSM. But only under the condition that it aids long-term growth and has the user’s best interests at heart. With that said, it is often useful to rely on multiple NSMs to get a broader idea of how your product is performing.
Either way, your NSM can aid in strategic decision-making and building a sustainable, successful product.
After surveying over 500 analysts, developers, and PMs, we’ve discovered the most important product metrics to track for mobile app...
