Claire Cooper

Feb 21, 20246 min read

Go-to-market strategy series: Internal alignment

Internal alignment leads to revenue stability, and it is a growth strategy.

Develop a go-to-market squad specialising in establishing your revenue stability as the central data point for external and internal information. Authorise your in-house experts to run the program and workshop the best solutions for you.

Start small, test, record your findings, and use that data to see weaknesses.

Small businesses and start-ups are less likely to encounter as many internal alignment issues.

A team working together — Unite the team under one goal

Why the North Star Metric?

Sean Ellis in Hacking Growth gave an international voice to this metric. Sean writes extensively on how the growth hacking community use the North Star to guide, align and focus the entire team (also called the Big Hairy Audacious Goal (BHAG)).

Designed to capture the core customer value, this is often called the first of the Aha moments.

For all companies, the North Star may change over time, for example, if you encounter business or economic changes.

Sean's example is WhatsApp:

You can send borderless, unlimited messages to friends and family.

Their North Star was the number of messages sent, rather than daily active users, because they wanted to ensure they were the first choice for communication.

How do you define a North Star to get everyone moving towards that one goal?

Before the fun part, you need to do your homework!

What hypotheses do you have on the opportunities and threats?

Research, test, design, and prototype to understand why your business works, which includes meeting or interacting with customers.

How are you organising your data?

For example, how is it being stored, is your data interconnected, and do you have reports and dashboards set up?

Data can become noisy, so be selective in what makes an impact and try not to go off on tangents.

How are your customers behaving?

Towards the thought of your product: From your thought leadership posts, ads, website interactions, and early-stage conversations.

With your product: How are they in the demo, on trial or freemium? What levels of interaction and engagement are they giving?

As they choose to walk away or buy more, interview your customers. Ask what went wrong and what went right, and ask about the work that went into choosing you.

All this information will help to build a picture of what behaviours are positive indicators.

Which types of customers help make you more successful?

The four input metrics

What are the factors that affect the North Star Metric?

Amplitude describe the four metrics as covering:

Breadth: number of customers placing orders each month

Depth: number of items within an order

Frequency: number of orders completed per customer each month

Efficiency: Percentage of orders delivered on time

It is not a requirement you follow this, but it helps to give context.

Examples of different company stages:

Pre-seed: North Star Metric has several customers signed up for the pre-launch date. Inputs are the number of engagements and interactions on social media, the target number of impressions in advertising, and the number of website traffic with x bounce rate.

Later stage: The North Star is the growth revenue. Inputs are the number of downloads, number of monthly active users, number of product features used, and average add-on purchases.

Hash the definitions out

Clearly define each input.

What counts as an engagement or interaction on social media?

For example, do they need to be someone outside your network, a more thoughtful interaction, a curious or heart interaction? Do they have different values?

Your North star metric

The Rules:

Has value that matters to customers, and everyone on the team understands it.
Aligns to your business and product strategy and your vision.
A leading indicator, not a vanity metric.
You can influence the outcome through actions, and it is actionable.
Quantifiable and measurable.

What is a leading indicator?

It is a metric that predicts future success.

Lagging indicators are the opposite of leading indicators. Your annual recurring revenue or net revenue retention measures how successful you are, not why. They are both lagging indicators.

Go to your Aha moments. Even in Beta, there are indications of success. The number of times someone logs in? The time spent in your app? What steps do they take?

What is a vanity metric?

Something that is nice to have but doesn’t necessarily build into revenue. For example, the number of page views.

For some companies, the input metrics might be vanity on the surface, for example, page views. You can ensure they are clearly and well defined so they become an input that considers the time on the page and if you heatmap, where they navigate. Whatever you choose, you want metrics that lead you to the next step.

Mid/Long term goals

Your North Star must support the customer and business health/results in the mid/long term unless you are a pre-seed start-up. Even as an early-stage business, it is helpful to consider what would make sense as your future North Star.

Workshop

Pre-workshop

Re-read the 'homework' section above.

Agree on who owns responsibility for getting your data and information together.
Agree on who will bring what information to the table for the workshop.
Ensure information is shared before the meeting so there are no surprises.

Workshop your North Star together

Time	Topic
15 minutes	Discussion on the reasons for the North Star
15 minutes	Activity: Identify how you make money
15 minutes	Discussion and activity: What makes a good (and bad) North Star
15 minutes	Discussion: The structure of the north star and Inputs
15 minutes	Activity: Identify a North Star for another product
45 minutes	15 minutes work on your own North Star interpretation
	30 minutes break
30 minutes (depending on team size)	2 minutes pitch on your North Star 15 minutes converging on North Star

Use a template to capture your thinking. Tools like Miro and Figma are great.

Retrospective

You should agree on what looks good in the workshop.
One week later, meet for half an hour to check your definitions, nuances or new perspectives.
Whatever North Star is chosen from this point forward, you all commit to it.

How does this all come together?

Underneath the North Star are your decisions on what leadership looks like, how your teams will communicate, what level of information you share, how you align as teams, your KPIs and OKRs, and your roadmap. There are too many next steps to cover here! The North Star is the jump-off point.

Blue words (the caption) on a yellow background — Data, definitions, and silos

No data, no definitions.

As a start-up or a small business, you may have a Customer Relationship Management tool (CRM) or Excel or no central data storage. Even with a CRM, your pipeline might be unclear.

I would advise you to consider your revenue operations (RevOps) at a foundation level by finding a CRM and building basic connectivity and lead flows.

Following on from your North Star Metric, is the definition checklist:

Get agreement on which metrics are important and define them.
Who owns them (map in a RACI and support growth through financial incentives)
Define each stage from product through to customer success. Include what it takes for entry and exit from each stage in the commercial funnel.
Design the targets to build growth. For example, use Key Performance Indicators (KPIs) or Objectives and Key Results (OKRs). Ensure these all drive towards your business and go-to-market strategies.
Map your technology stack and the data flow.

When you do not have data, you can collate your invoices to understand the customer categories, average contract value (ACV), and buying cycles.

Consider interviewing the marketing and sales team, customers, and partners, and understand their journey. Discover who your customer base is and why they are interested in you.

Quick win! Take information on how those customers find you, and start asking on your forms or in meetings.

The team that works on these pieces is used to form your go-to-market squad. I will write more about the GTM squad separately.

Some data, but no one agrees on which data is correct. We all use different reporting and have silos.

Where to start?

It feels this scenario is the most common with scaling and enterprise businesses.

Marketing, Sales and Product teams can give a qualitative understanding of where the quantitative data points get shaky or fail.

The definition checklist applies.

Together, decide on a period to track the data and run a short sprint to gather that information. Understand what works and what does not (you might continue a focused sprint).

Map out the as-is and the ideal state, workshop the process and enablement changes to support the data needed, prioritise the order of tasks, and start.

As you start this task, several GTM strategy tasks will arise. To minimise distractions, use the ICE framework to optimise time.

The change management can involve:

Designing and testing enablement to improve data hygiene.
Selecting data champions to help in the field.
CRM operational guardrails to nudge that behaviour.
Design commission to include business health rewards.
Understanding team capacity.
Train on the business impact of giving information and how they will benefit.

You have the data, and you trust the data.

Your definitions work.

Your teams communicate.

It is rare, but there are always improvements:

Your knowledge hub, guardrails, lead flow, commission plans, data guardians and owners, data architecture, and team communication likely need work.