Ryan Milligan, VP of Sales and RevOps at QuotaPath, joins our host, Camela Thompson, Go-To-Market Thought Leader and B2B Insights Expert, in this episode of the Revenue Marketing Report. Ryan shares why a North Star Metric (NSM) isn’t what you think it is, how to socialize it with the rest of the business, and how to assign KPIs to marketers that ultimately point back to that North Star.
Hello and welcome to the Revenue Marketing Report, powered by CaliberMind. I'm your host, Camela Thompson, and today I'm joined by Ryan Milligan. Ryan, tell us a little bit about yourself.
“Hi there, Camela. Thanks for having me here. I’m Ryan Milligan, Vice President of Revenue Operations and Sales at QuotaPath. I’m super excited for today’s conversation. I started my career in data science, writing a lot of SQL and building models. I realized I wanted to be more on the operations side and found my way through marketing and eventually revenue operations. I started leading our sales team in Q4 of last year. It’s been a fun and unique challenge. I’m excited to be here and talk about this topic.”
That’s a big shift. I have a similar background, starting in analytics and moving into marketing. I’m really excited to talk about today’s topic – choosing a North Star Metric and aligning the entire business around it.
What are your thoughts on how to select a North Star Metric?
“I think of a North Star Metric as a metric that, if moved, shows the long-term viability of the business and specifically customer value. Many gravitate towards revenue growth or ARR growth. The challenge is how someone on the engineering, people, product, or marketing team can drive this metric. I prefer a North Star Metric to be more behavior-focused – what you want your customer to do. For example, at QuotaPath, we automate the process of calculating and paying commissions. The success metric for us is the percentage of our customers who have paid commissions in QuotaPath in the last 90 days. This metric is behavior-focused and something that all teams can contribute to, leading to renewals, expansion, and new business.”
That’s an interesting shift from where I thought you were going. Many business leaders choose metrics like NRR expansion rate.
How would this apply in other situations where you don't have such a rigorous cadence, like maybe time in the product or the number of active users?
“The board conversation and business viability conversation often focus on NRR, which is a great metric. But I prefer something more up-funnel that indicates customer happiness in your product, leading to revenue retention and expansion. Usage or adoption metrics can show the impact of new features or programs on customer success. If customers use your product frequently, there’s a correlation with good revenue retention and expansion. If not, you might have a pricing or value presentation problem. Usage or adoption metrics help identify these issues earlier.”
I like it when someone does something different and forces me to think about ways to apply it in various circumstances. Let’s talk about other metrics like NPS. Can we discuss alternatives that provide a clearer picture?
“NPS has major selection bias. People who fill out NPS surveys are typically either passionate advocates or frustrated customers. It’s not a required action, so the data isn’t always actionable. NPS is also a lagging indicator. By the time someone is frustrated enough to score low, you’ve likely lost them. Alternatives to NPS include usage metrics. If people frequently use your product, they’re likely happy. Usage data provides more up-funnel insights than NPS.”
We aren’t stopping other measurements. We’re choosing one thing the business can march to. NPS was useful when we didn’t have usage analytics, but reviews on platforms like G2, Capterra, and TrustRadius can be more valuable.
“Exactly. NPS is broad and doesn’t pinpoint where issues lie unless customers provide detailed feedback. In-app prompts focus on specific experiences and provide actionable insights. For example, asking about the experience of building a comp plan in QuotaPath can give immediate feedback. Happy users should be encouraged to leave reviews on platforms like G2, benefiting your product’s reputation.”
In-app prompts focus on experiences, unlike feedback about representatives, which can be problematic. Representatives may not be at fault, and you won’t get the feedback needed to improve the product.
“Right. Account managers can’t control feature releases. At QuotaPath, we track our North Star Metric weekly. We discuss progress, accounts that became NSM, accounts that fell out, and headwinds. Everyone in the company should understand how their work impacts the business and be able to explain it. We also tie compensation to the North Star Metric, aligning everyone’s efforts towards it.”
That's a perfect segue. What are some leading indicators we can give our teams that align with the North Star Metric without distracting them from the overall company goal?
“Leading indicators can include gross revenue retention, net revenue retention, and new logo acquisition. For marketers, focus on prospects most likely to achieve the North Star Metric. Identify characteristics of customers who expand significantly, like industry, CRM, size, or funding stage. Target these ideal customers to drive more valuable users to your product.”
In smaller organizations, feedback from the executive team is important, but data is crucial. Ensure you have the right data to identify your ideal customers. It’s a critical exercise for alignment.
“Alignment on ICP is essential. Your ICP should correlate with the North Star Metric and influence actions like discounting rules, event invitations, and marketing strategies. If sales and CS aren’t bought in, it can cause issues. Ensure your sales leader supports this alignment.”
Sales must be on board. If they aren't, it can create significant challenges. How do you handle discount discussions with the sales team to ensure alignment with the North Star Metric?
“I ask my sales team why a customer deserves a discount. If the customer is a great fit and has growth potential, I’m more willing to offer discounts. For customers with clunky data sources and low expansion potential, I’m less inclined. Effective product marketing and re-education can re-engage dormant customers. Our marketing team constantly works on re-educating customers to get them back to using our product, leading to higher retention and expansion rates.”
Marketing doesn’t just touch the top of the funnel. Giving marketing teams metrics that correlate with pipeline or bookings, rather than lead volume, drives better behavior. Marketing should also focus on down-funnel metrics and enablement.
“Marketing teams often focus on the top of the funnel because it’s quantifiable. However, marketing impacts the entire customer journey. By owning the North Star Metric together, you can identify and address issues with non-NSM customers. Campaigns and features can be tailored to get customers back on track.”
Getting executive buy-in is crucial. Sales often blames top-of-funnel issues when struggling. Who should spearhead the initiative to get buy-in for the North Star Metric?
“Work with the executive team to understand the financial plan and key drivers of success, like revenue growth, retention, and expansion. Identify what makes customers successful and create hypotheses around it. Use quantitative and qualitative data to support your case. Ensure the metric is something everyone can influence and understand.”
Communication is key. Remind people how their work impacts the North Star Metric and use it to prioritize actions. It’s an effective way to say no to misaligned ideas.
“Absolutely. Aligning your management team on the North Star Metric helps prioritize actions that drive value. It prevents shiny object syndrome and keeps everyone focused on what matters. Discuss the metric regularly and integrate it into company meetings to keep it top of mind.”
Let's discuss how to tie the North Star Metric to individual contributors, like those in paid advertising.
“For paid advertising, target customers that are likely to be valuable long-term. Use messaging that emphasizes the North Star Metric’s value. Bid on keywords that align with this value and use quotes from happy customers. Understand who your best customers are and use lookalike targeting to find more of them.”
“Organizations with robust tech can use anonymization software and Google BigQuery to see if the right accounts visit their site. If not, focus on new customers achieving the North Star Metric within a defined period. It’s about moving more customers towards success faster.
“Exactly. Pick a metric that makes sense from a customer standpoint and use it throughout your marketing strategy. Talk about the North Star Metric regularly in company meetings. Highlight success stories and discuss accounts that fell out. Segment by firmographics and ensure everyone is incentivized to get customers up and running.”
That’s a great strategy. Ensuring all customers, regardless of size, are treated equally helps avoid focusing only on large accounts. Smaller customers can grow into significant ones.
“Exactly. By treating all customers equally in the North Star Metric, you ensure everyone is incentivized to help every customer succeed. This approach prevents bias towards larger accounts and encourages a focus on long-term growth potential.”
Thank you so much for sharing your insights, Ryan. This has been incredibly valuable.
“Thank you, Camela. It’s been a pleasure discussing these strategies with you.”
For more content on B2B marketing trends, listen to the full Revenue Marketing Report episode at the top of the article or anywhere you podcast.
