How To Establish Your ISO’s North Star Metric

ISO North Star Metric

When measuring the success of your Independent Sales Organization (ISO), there are a few important metrics to consider. The metrics can include tangible ones like revenue and market share, to the more difficult to measure metrics including brand reputation and awareness.

Whether the success metrics are tangible or not, they are a strong way to measure the success of an external ISO. But it’s important to consider whether they are effective when measuring the success of your own ISO. 

While the tangible and intangible metrics are absolutely relevant when measuring the success of your ISO, they aren’t the most important. The most important metric to consider is your ISO’s North Star metric.

 

What is the North Star Metric?

Your ISO’s North Star metric is the metric that will drive growth and long-term success. The key is that each ISO will have their own North Star Metric, and it needs to be something your entire ISO can focus on to achieve long-term, sustainable growth.

Think Spotify and time spent listening, or Facebook and monthly active users. These companies measure themselves by every metric under the sun, but if these metrics aren’t increasing something isn’t working.

The concept is that your North Star metric is expressly tied to growth. Spotify needs time spent listening to go up over time, or they aren’t succeeding. If Facebook is losing monthly active users, something needs to change.

 

Tips for Finding Your ISO’s North Star Metric

Your North Star metric cannot be revenue growth

The first step to finding your North Star metric is not to just look at your revenue as the sole evidence of growth. A true North Star metric can’t be solely made up of revenue metrics. The North Star metric needs to be intrinsically tied to the value that your customers receive in exchange for the price they pay.

More revenue can be the result of improving your North Star metric. It just can’t be the North Star metric all on its own, as this will drive short-term goals and short-term results.

The North Star metric is all about sustainable, long-term growth for your ISO.

 

Your North Star metric is something everyone can contribute to

Another key aspect of your North Star metric is that your entire ISO should be able to contribute to its growth. Some possible North Star metrics such as Number of New Leads or Website Traffic may fall too high in the funnel, and so only marketing can really contribute to growth. These do not make great North Star metrics.

A stronger North Star metric for an ISO could be residual growth. Growing your residuals portfolio is intrinsically tied to revenue growth, but it actually extends beyond just the amount of money your organization is making. 

For residuals to grow at a high level, your ISO needs to be performing across the board. New merchants increase residuals, but consider your existing merchants. If your administrative team isn’t giving them the service they deserve, they’ll take their residuals elsewhere.

 If enough merchants make the same decision, your North Star metric of residual growth starts to dramatically slow down.

 

Your North Star metric needs to be time-bound

To expand on the previous example, residual growth by itself is not time-bound. Your North Star metric needs to be time-bound, otherwise it is difficult to measure growth consistently — and to take action on the insights provided by measuring your North Star metric.

To improve the residual growth metric, let’s add an element of time. While the actual percentages of growth will vary dramatically for every ISO, residual growth can be measured on a monthly basis. For example, an ISO may set their North Star metric as residual growth per month. So each month, that ISO would sit down and analyze how their residuals portfolio changed over time.

 

Your North Star metric should lead to actual growth

The final tip for developing your own North Star metric is simple, but likely the most important: no matter what your North Star metric is, it needs to lead to actual growth. Anything tied to vanity metrics is absolutely useless as a North Star metric. 

When Spotify sees an increase in time spent listening, that can be directly correlated with platform growth. When your ISO’s residual portfolio is steadily increasing, your revenue is growing. The metric is intrinsically tied to growth, like all great North Star metrics.

 

Key ISO Takeaways

You may be struggling to come up with your own ISO’s North Star metric right away. This is completely normal. Understanding the single most important metric for your business takes time. Depending on the size of your business, it could take months or even years to truly narrow down what matters to your ISO’s growth. 

Keep in mind the tips shared in this post, and start looking at your business as a whole. Which metrics are truly driving growth, not just short-term revenue? Which metrics can your entire team contribute to, not just your sales or marketing teams? Can you measure this metric by some unit of time, to show that your ISO is providing more valuable solutions to merchants?

You need to ask yourself these questions until you find your ISO’s true North Star metric — and then you can measure the success of your entire business, and show how each team is contributing to growing the business as a whole.

 

Need help tracking residuals growth, onboarding merchants, or ensuring leads are progressing down their buyer’s journey? Visit the IRIS CRM features page for a complete description of all the ways the platform can benefit your ISO or schedule a free guided demonstration of IRIS CRM today!

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