4 Examples of B2B SaaS North Star Metrics
Increasing your NSM should always lead to increased revenue, but it’s not always useful to use gross revenue or ARR as your north star metric. Below, we provide four examples of B2B SaaS companies who adopted innovative NSMs that helped define their value to customers and accelerate their growth.
Spotify NSM Focuses on Consumption Growth
Spotify’s NSM is the total time spent listening to music on the platform.
More time spent listening on the Spotify platform leads to increased ad revenue from free users and increased subscriber retention, so this NSM appears to correlate strongly with both customer value and business success.
Spotify’s NSM is an output metric, a measurement of outcome. By clarifying the desired outcome, Shopify has been able to identify upstream activities and implement new features that support the desired outcome and increase the NSM.
HubSpot CRM Optimizes for Engagement
Hubspot executives have gone on the record saying that HubSpot CRM’s NSM is “the total number of weekly active teams”.
This NSM connects strongly with both customer value and business revenue. Each team represents an active subscription, and HubSpot also knows that active teams are less likely to churn. HubSpot can increase its number of weekly active teams by adding new accounts, as well as by ensuring the success and retention of its existing customer base.
Superhuman Focuses on Delighting Customers
Superhuman is a performance-optimized email client that uses Net Promoter Score (NPS) as its NSM. The company surveys its users regularly to measure their overall satisfaction and willingness to recommend Superhuman to their friends.
By focusing on user experience as an NSM, Superhuman can direct their attention towards activities, updates, and new features that genuinely delight customers.
Teachable Grows by Optimizing for MRR
While revenue isn’t always the best NSM, SaaS businesses have succeeded by focusing their efforts on improving MRR.
One example is Teachable, a SaaS course platform that achieved great results by switching its NSM from monthly active users (MAU) to MRR.
Teachable found that focusing on MRR made revenue predictions more accurate by accounting for customer retention. The focus on MRR also led to a number of new initiatives, including new features and pricing that might have been overlooked while focusing on MUA.