Let’s consider a hypothetical scenario where I have a news and magazine app called “NewsMania“. NewsMania’s primary goal is to increase user engagement and retention, ultimately driving revenue through subscriptions and ad impressions. I will explore the implementation of a North Star Metric (NSM) and illustrate it with numbers and calculations.
Step 1: Define the North Star Metric (NSM)
NewsMania identifies the NSM as “Monthly Active Users (MAU) who read more than 10 articles per month.” They believe that users who engage with a significant number of articles are more likely to stay subscribed and generate ad revenue.
Step 2: Data Collection
NewsMania collects the necessary data to calculate the NSM. They gather information such as:
Total number of registered users: 100,000
Number of monthly active users: 50,000
Number of monthly active users who read more than 10 articles: 20,000
Step 3: NSM Calculation
Using the collected data, NewsMania can calculate their NSM, the “Percentage of MAU who read more than 10 articles per month”:
NSM = (Number of MAU who read more than 10 articles / Number of MAU) * 100
NSM = (20,000 / 50,000) * 100
NSM = 40%
Step 4: Setting Improvement Targets
NewsMania sets improvement targets to drive user engagement and increase the NSM. They aim to increase the percentage of MAU who read more than 10 articles to 50% within the next six months.
Step 5: Implementation and Monitoring
NewsMania implements strategies and features to improve user engagement and encourage users to read more articles. They introduce personalized recommendations, implement a seamless user interface, and offer exclusive content to subscribers.
NewsMania monitors the NSM and tracks its progress over time. Here are the monthly NSM numbers for the first three months after implementing the initiatives:
Month 1:
Number of MAU: 50,000
Number of MAU who read more than 10 articles: 21,000
NSM = (21,000 / 50,000) * 100 = 42%
Month 2:
Number of MAU: 52,000
Number of MAU who read more than 10 articles: 23,500
NSM = (23,500 / 52,000) * 100 = 45.2%
Month 3:
Number of MAU: 55,000
Number of MAU who read more than 10 articles: 27,000
NSM = (27,000 / 55,000) * 100 = 49.1%
Step 6: Evaluation and Iteration
Based on the NSM numbers, NewsMania observes a steady increase in user engagement. By the end of Month 3, they achieve an NSM of 49.1%, which is close to their target of 50%. NewsMania evaluates its strategies, identifies successful initiatives, and considers additional features or improvements to further enhance user engagement and exceed its target in the following months.
In this example, I explored how an app-based news and magazine platform, NewsMania, could implement a North Star Metric (NSM) to focus on user engagement and retention. By selecting a meaningful NSM, collecting relevant data, and monitoring progress, NewsMania can make informed decisions to drive growth and achieve its business objectives.