North star metric and AARRR: product metrics for PMs
North star metric explained with the AARRR funnel: Amplitude's 3 qualities of a good metric, input metrics, a hypothetical funnel table and pitfalls.
A north star metric is a single critical rate, count or ratio that represents a product's strategy and the value customers get from it. Amplitude's North Star Playbook says a good one expresses customer value, sits within product and marketing's influence and leads revenue. AARRR is a separate framework that tracks acquisition, activation, retention, referral and revenue as five stages of the customer funnel.
What is a north star metric?
A north star metric is the one number a product team agrees to move because it captures the value users receive. Amplitude's 2024 North Star Playbook defines it as a single critical rate, count or ratio that represents product strategy, and gives three qualities: it represents the value users get, it is within the influence of product and marketing, and it is a leading indicator of revenue.
Amplitude's examples show the pattern. The playbook says that in 2005, when Netflix was shipping DVDs, the product team chose the percentage of customers placing three or more DVDs in their queue during their first session, and judged that it captured the company's differentiation strategy and would lift retention and subscription revenue. That is Amplitude's account of Netflix's choice. Amplitude's blog of 15 July 2026 lists examples from its customers by industry, among them time spent listening to music for media and number of nights booked for hospitality and travel, without naming the companies.
The playbook adds a seven-question checklist: does the metric express customer value, represent vision and strategy, act as a leading indicator, stay actionable, remain understandable to non-technical partners, remain measurable, and avoid being a vanity metric.
What are input metrics, and how do they relate to the north star?
Input metrics are the small set of factors that teams can move directly and that together produce the north star. Amplitude calls inputs independent variables and the north star an outcome, a dependent variable, and says never to try to influence the north star directly. Its blog of 20 August 2024 says inputs are three to five factors and suggests a heuristic of breadth, depth, frequency and efficiency for finding them.
Amplitude's own example is a grocery delivery service whose north star is total monthly items received on time. The four inputs are customers placing lots of orders, orders with lots of items, lots of orders fulfilled, and orders delivered on time. Burger King's digital team is the playbook's other case, with a north star of digital transactions per user and three inputs: new user activation, registration and frequency.
The same pattern applied to a hypothetical learning app gives a north star of learners who finish three or more lessons in a week, with four inputs:
- breadth: the number of learners who start a lesson in the week
- depth: lessons finished per active learner
- frequency: days active per learner in the week
- efficiency: the share of started lessons that are finished
Each input can be owned by a team, and a change in one shows up in the north star.
What are AARRR pirate metrics?
AARRR is an acronym for acquisition, activation, retention, referral and revenue, and is also called pirate metrics because the acronym sounds like a pirate's cry. Amplitude credits Dave McClure with introducing the concept and describes it as a way to turn the funnel into an orderly, measurable sequence of stages. The table gives each stage a question, an example metric and a figure from a hypothetical month for an invented learning app.
| Stage | Question it answers | Example metric | Hypothetical value |
|---|---|---|---|
| Acquisition | Where do users come from? | Visit to sign-up rate; customer acquisition cost | 20,000 visits, 2,400 sign-ups: 12.0% |
| Activation | Do new users reach the first moment of value? | Share of sign-ups finishing a first lesson within seven days | 1,200 of 2,400: 50.0% |
| Retention | Do they come back? | Share of activated users still active in week 4 | 480 of 1,200: 40.0% |
| Referral | Do they bring others? | Share of activated users who invite a friend | 180 of 1,200: 15.0% |
| Revenue | Do they pay? | Paying users as a share of sign-ups | 120 of 2,400: 5.0% |
All five figures are invented for illustration and are not benchmarks. Amplitude gives metric examples in the same spirit: customer acquisition cost for acquisition, activation rate and time to activate for activation, and retention rate and churn rate for retention.
What is the difference between activation and retention?
Activation is whether a new user reaches the product's first moment of value, and retention is whether that user keeps coming back. Amplitude describes activation as users discovering the value of a product, the aha moment where exploration turns into engagement, measured by activation rate and time to activate. It describes retention as how many users return over a period, with churn rate as the inverse.
The two point to different fixes. Low activation suggests a problem in onboarding or in the first experience, and the fix is usually in the first session. Low retention among activated users suggests the product delivered value once and not repeatedly, and the fix sits in the ongoing experience. In the hypothetical month above, half of sign-ups activated and two in five activated users remained in week 4. If the team's target for week-4 retention were higher, retention would be the next focus.
A retention curve adds the shape. Take a hypothetical cohort of 1,000 sign-ups with 42.0% active in week 1, 25.0% in week 4 and 22.0% in week 8. Read as a share of the original cohort, the figures show where users drop away: 58 of every 100 sign-ups are gone by the end of week 1, and a further 20 by week 8.
How do you choose a north star metric?
Start from the kind of value the product delivers, then test candidates against the checklist. Amplitude sorts products into three games: attention, where the question is how much time customers spend in the product; transaction, where it is how many transactions a user makes; and productivity, where it is how effectively someone gets work done. Amplitude says focusing on one game is critical, and that companies playing the same game can have very different north stars because their strategies differ.
A workable sequence has five steps:
- Write down the customer value the product exists to deliver, in one sentence.
- List three or four candidate metrics that count that value being delivered.
- Run each through the seven-question checklist and drop vanity metrics and lagging ones.
- Define three to five inputs for the survivor and name an owner for each.
- Review whether a change in the inputs moves the north star, and revise if it does not.
The product metrics and experimentation skills guide covers the testing side of step 5.
Which metrics are vanity metrics?
Vanity metrics rise without showing that customers are getting value. Amplitude's playbook lists daily active users, registered users, ad impressions, story points delivered, number of downloads, time on page and page views, and says they should not be a north star. It also says monthly recurring revenue and average revenue per user are poor choices because they report what already happened instead of predicting what will.
The list needs a qualifier. Daily active users can be a sensible input for a product where daily use is the value, and the playbook's point is that such a metric is a weak summary of strategy, not that it is useless. A quick test is to ask what decision the number would change. If a rise in downloads would not change any decision, it is not a good headline metric.
What are the limits of a north star metric?
One number cannot describe a whole product. Amplitude recommends a single north star and its inputs per product, and accepts that a company with distinct lines of business may need more. The playbook also warns that if a team can move the north star directly, it is probably not a good one, which makes it hard to choose a metric that is both meaningful and responsive.
Other limits apply. AARRR was framed for startups, and Amplitude notes that startups benefit most, so the stage definitions need adapting to each product. The frameworks here also come from an analytics vendor, so they describe one practitioner view and not a standard.
Metrics show what users do and not why, which is where customer interviews help, as described in the guide to product discovery and customer interviews. Success metrics also belong inside each requirement, and the guide to user stories and acceptance criteria shows where they sit.
Where do product metrics fit in a product management programme?
Product Management with AI is an online certification from BITS School of Management (BITSoM), offered in partnership with Masai, taught in live online classes with an optional campus workshop. It covers product discovery, design and MVPs, building with agentic AI, Agile execution, go-to-market and product metrics, and includes a module titled Data, Metrics and Decision Making with topics such as product metrics, CLV and A/B testing.
Frequently asked questions
What is a north star metric?
A north star metric is a single critical rate, count or ratio that represents a product's strategy and the value customers receive. Amplitude's North Star Playbook says it should express customer value, sit within product and marketing's influence, and lead revenue. Teams move it indirectly, through input metrics.
What are AARRR pirate metrics?
AARRR stands for acquisition, activation, retention, referral and revenue. The framework treats each stage as a measurable step in the customer funnel, with a metric such as activation rate or churn rate at each. Amplitude credits Dave McClure with introducing it, and the name comes from the pirate-like sound of the acronym.
What is the difference between activation and retention?
Activation measures whether a new user reaches the product's first moment of value, such as finishing a first lesson. Retention measures whether users return over time, for example the share still active in week 4. Churn is the inverse of retention. Low activation points to onboarding, and low retention to ongoing value.
Can a product have more than one north star metric?
Amplitude recommends one north star metric, with its inputs, per product, because several compete for attention. It accepts exceptions where a company has distinct lines of business and different customer bases. Within one product, extra measures belong among the inputs or as guard rails instead of as rival north stars.
What are input metrics?
Input metrics are the three to five factors teams can influence directly through their daily work, and that together produce the north star. Amplitude suggests looking at breadth, depth, frequency and efficiency. In its grocery example the inputs are orders placed, items per order, orders fulfilled and orders delivered on time.
Next step
Metrics become useful once a team can define them, instrument them and read them against a goal. To practise on real product cases, including funnels, cohorts and experiments, see the Product Management with AI programme page.