The happiness ingredient missing from your north star metric

The happiness ingredient missing from your north star metric

Recently, especially in the startup world, everyone has been talking about developing their own North Star Metric (NSM). A powerful concept designed to help businesses generate long-term sustainable growth by focusing on a single, key metric.

Developed and popularized by Sean Ellis, the man behind the exceptionally successful marketing strategies of Dropbox, Lookout, and GrowthHackers, the NSM concept has been embraced by virtually every business from social media giant Facebook to businesses in retailers, internet service providers, and banks.

What many organizations are getting wrong though, is forgetting to factor in whether their customer’s happiness is actually increasing their NSM. This can lead to businesses investing time and resources into costly tactics that have a negligible effect on improving their NSM.

Here’s how you can make happiness a part of your growth strategy.

Why happiness is the missing ingredient

In order to uncover your North Star Metric, you have to be able to pinpoint what value your most loyal customers are receiving from doing business with you. What is the core value of your business exactly?

The ability to quantify that value into a single metric allows a business to ensure that everyone within the company is working towards a common goal. Specifically, moving the needle on their NSM.

The mistake that businesses make when developing their NSM is focusing only on the technical ways they can increase that value, such as adding new features to help customers save time or use the product better. All the while, completely forgetting about the emotional value they could easily leverage to increase their NSM.

For example, a NSM for a bank could be the number of transfers the average customer makes within a month. This works great as an NSM as it gives the bank a good gauge of how many times a customer is actively doing business with them each month.

A recent study by Harvard Business Review found that many customers of a certain bank stated that assistance with transferring funds to a new account was highly important to them. The study found that even after implementing this feature it did little to increase the customer’s emotional connection with the brand, and only marginally affected their NSM.

However, when the bank began sending a personal welcome note along with online investing videos for new customers, this had a huge impact on the customer’s emotional connection with the bank and positively affected their NSM. The study went on to find that these kinds of customer experience tactics resulted in customers being six times more likely to consolidate their assets with that firm!

Leveraging emotional value

Over the past few years, it’s become increasingly apparent that what customers value more than the specific features of a single product or service is the emotional connection they form with the brand.

According to a study by Oracle, 88% of customers prefer doing business with a company that offers quality customer service over one that that has the latest products.

Another report by American Express found that two out of three people didn’t complete a purchase due to a poor customer experience.

What these facts and figures tell us is that businesses need to focus on tactics that bring emotional value to their customers.

In the same Harvard Business Review study, a major apparel retailer wanted to increase their NSM of the number of visits a customer made to a store within a month. In order to do that they first closely examined what their customers’ key emotional motivations were and where in their customer journey they could leverage those motivations.

Through a mixture of surveying and analyzing the customer’s written feedback, the retailers were able to find out that their customers wanted to feel like they belonged to a community and a sense of freedom and independence.

To address this, the retailer created a marketing program to address these specific emotional values. For example, they broke down their customer journey and found that the “choosing a store” and “make a purchase” stages were ripe with potential for adding emotional appeal. To take advantage of this the retailer would begin using advertising imagery that appealed to that sense of community and belonging, as well as sending personalized notifications on items they knew the customer was interested in.

All of this led to a 15% increase in the number of active customers and, most impressively, there was also a 50% increase in the number of times a single customer would visit the same store!


In order to achieve long-term sustainable growth, every business needs to develop strategies and tactics that are designed solely around improving their North Star Metric. By focusing on continuously growing their NSM they’ll be able to experience continuous growth too.

But before you go into trying to add in new features and tactics that your customers don’t even want, be sure to take a step back and think about what tactics can you implement to improve the emotional connection between your brand and the customer. And the only way you can find that out is by taking the time to figure out what it is your customers want.

By using the latest CX tools to understand what your customers are saying, and in some cases not saying, it can give you strategic insights in creating low-cost tactics that dramatically improve your NSM.

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