North Star KPI

What does it mean?

The North Star KPI is the single most important metric that reflects the core value your company delivers to customers and ultimately drives long-term sustainable growth. It's a leading indicator, meaning it predicts future success rather than simply reflecting past performance. Unlike lagging indicators like revenue, a North Star KPI helps you understand how well you're acquiring and retaining valuable customers.

It should be the KPI to always work towards and it helps you to determine whether other KPI’s, which may seem logical to use might actually be needed or not.

Example:

For example, an e-commerce platform might define their North Star KPI as "Monthly Active Buyers." This metric goes beyond just website traffic and focuses on users actively making purchases. By tracking and optimizing for this KPI, the company can make data-driven decisions to improve user experience, product selection, and ultimately drive sales growth.

Now imagine this same company installing a growth-hacking team. If this team would use ICE or PIE to prioritise its testing items, the impact (in the case of ICE) or effect on Potential and Importance (in the case of PIE) should be judged on what each item could do to that North Star KPI.