What is North Star Metric (NSM)?

In Customer Success, keeping customers engaged and ensuring they see value in your product is the top priority. A North Star Metric (NSM) helps teams focus on the core value customers receive – not just how many users sign up but how they actively benefit from the product.

For CS teams, an NSM is a guiding metric that helps track whether customers are adopting, engaging and ultimately staying with the product. It aligns teams across the company, ensuring everyone works toward improving customer outcomes rather than just chasing short-term wins.

This blog will break down how Customer Success teams can define, use and implement an NSM, plus common mistakes to avoid when selecting one.

Why Customer Success needs a North Star Metric (NSM)

CS teams juggle a lot – onboarding, adoption, retention and expansion. Without a clear way to measure success, it’s easy to get stuck reacting to problems instead of preventing them. A North Star Metric (NSM) helps by acting as an early indicator of customer health, allowing teams to step in before churn becomes a risk.

An NSM also fosters alignment across departments. When CS, Product and Sales focus on the same outcome, decisions become more customer-driven. Instead of chasing short-term fixes, teams work toward sustained engagement and long-term value.

How to define a Customer Success-focused NSM

A good NSM should reflect the real value customers get from your product. It’s not just about usage – it’s about measuring whether customers are achieving their goals. 

The right NSM helps Customer Success teams track engagement, prevent churn and drive long-term retention. Here’s how to define one that makes sense for your business.

Step 1: Identify the core value your product provides

Start by understanding what success looks like for your customers. What problem does your product solve? How do customers measure success? 

A CRM tool, for example, helps teams manage relationships, so an NSM might be the number of active contacts managed per user.

Step 2: Track behaviors that signal success

Once you define the core value, look at customer behaviors that indicate they’re experiencing it. These could be actions like regular logins, key feature usage or task completion. 

A collaboration tool might focus on the number of messages sent per user, while an e-learning platform could track courses completed.

Step 3: Choose a metric that is measurable and actionable

The NSM should be something Customer Success Managers (CSMs) can influence. If CS teams can drive adoption through onboarding, training or proactive outreach, then the metric is useful. Make sure to avoid vanity metrics like total sign-ups and focus on engagement.

Step 4: Align it with customer and business growth objectives

The best NSMs create value for both customers and the business. When customers actively engage with the product, they’re more likely to stay, expand their usage and advocate for it. 

A well-chosen NSM ensures that Customer Success efforts drive both long-term customer satisfaction and sustainable revenue growth. Now that we’ve defined what a strong NSM looks like, let’s explore some real-world examples.

Examples of North Star Metrics for Customer Success

The right NSM depends on the product and how customers interact with it. For CS teams, the goal is to choose a metric that reflects engagement, adoption and long-term value. Below are some examples across different industries.

B2B SaaS (Customer Success software): Health score coverage

For Customer Success platforms, the key metric is often how well customer health is being monitored. Tracking health score coverage – the percentage of customers with an actively updated health score – ensures that CS teams have visibility into potential risks and opportunities. 

If this number is low, it may indicate gaps in data collection or a need for more proactive engagement.

Subscription services (streaming, learning): Time spent using the service

For businesses that rely on recurring revenue, retention is key. Streaming platforms like Netflix or learning platforms like Coursera track time spent engaging with content. 

If customers aren’t using the service regularly, they’re more likely to cancel. CS teams can address this through personalized recommendations and reminders.

Collaboration tools (Slack, Zoom): Messages sent or meetings held

Collaboration platforms thrive when users are actively communicating. Metrics like messages sent in Slack or meetings held in Zoom show if teams are relying on the tool. A drop in engagement could signal potential churn.

Avoiding common mistakes with NSM in Customer Success

Defining a strong NSM isn’t just about picking a number that looks good on reports. It needs to reflect real customer value and be something Customer Success teams can actively influence. Here are some common mistakes to watch out for.

1. Choosing vanity metrics that don’t reflect customer value

It’s tempting to track numbers that look impressive, like total sign-ups or website visits, but these don’t tell you if customers are actually using or benefiting from the product. 

Instead, focus on engagement-based metrics like feature adoption, active usage or completed workflows – indicators that customers are finding value.

2. Focusing on lagging indicators instead of proactive signals

Metrics like revenue and churn are important, but they tell you what’s already happened rather than what’s coming. 

A strong NSM should be a leading indicator that helps predict success, such as onboarding completion rates or the number of support tickets resolved before escalation.

3. Lack of alignment across teams

If different teams track different success metrics, it can create conflicting priorities. Sales might prioritize new deals, while CS focuses on adoption and Product on feature releases. 

A well-defined NSM ensures everyone works toward the same customer outcome, making collaboration more effective.

Implementing NSM in your Customer Success strategy

A North Star Metric (NSM) is most effective when it’s actively used to guide decision-making across Customer Success, product and sales. It should highlight risks, track engagement and create alignment across teams. Here’s how to integrate it into your strategy.

1. Use NSM as a leading indicator in customer health scores

Customer health scores help CS teams assess engagement and predict churn. Incorporating the NSM into these scores provides early insights into whether customers are experiencing value. 

If the NSM starts to decline, it signals a need for intervention. CS teams can use this data to prioritize outreach, adjust support strategies and prevent churn before it happens.

2. Drive adoption and engagement through education and proactive outreach

An NSM should inform how CS teams support customers. If engagement is low, targeted onboarding improvements, educational content and proactive check-ins can help customers see value sooner. 

By analyzing NSM trends, CS teams can spot usage patterns, refine engagement strategies and address customer needs before they escalate.

3. Collaborate with Product & Sales to ensure customers achieve long-term success

The NSM isn’t just for Customer Success – it should be a shared focus across Product and Sales. Product teams can use it to refine key features, ensuring they support customer value. 

Sales can align messaging with the NSM to attract the right customers. This alignment creates a consistent customer experience from acquisition to renewal.

Key takeaways

• A North Star Metric (NSM) is a single, high-level metric that reflects the core value customers receive from a product and helps businesses measure long-term success.
• Customer Success teams use the NSM to track engagement, predict retention and guide proactive strategies that improve customer outcomes.
• A strong NSM should be customer-centric, measurable and actionable, ensuring that teams can directly influence it to drive long-term adoption and growth.
• Common mistakes when selecting an NSM include focusing on vanity metrics, using lagging indicators instead of leading ones and failing to align teams around a shared goal.
• Implementing an NSM effectively involves incorporating it into customer health scores, using it to drive adoption and engagement and ensuring cross-functional collaboration with Product and Sales.
• When properly integrated, an NSM helps Customer Success teams take proactive, data-driven actions that improve retention, increase expansion opportunities and align the entire company around customer value.

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