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Should my team focus on the NSM or the variables that come from Growth Equation? What is the objective of Growth Equation is the growth team is focused on the NSM? Do I use the Growth Equation to derivate the NSM?

  • AA

    Anuj Adhiya

    3 months ago #

    You should figure out your NSM first since that is a reflection of the value you provide your users/customers.
    Everything you do should be towards impacting that metric.

    Your growth equation (or model) will help you figure out the areas of highest opportunity to impact your NSM.
    This should then lead to creating objectives to help your team focus the ideas that you test.

    As a simplistic example:
    Let's say that analyzing your growth equation (or model) shows you that your sign up conversion rate is 2%. This means that you likely shouldn't focus on Acquisition but Activation. So your objective could be "Increase sign up conversion rate from 2% to 20%. All the ideas your team comes up with should be around that initial visitor/user experience to get them to sign up.

    As you run more tests, you will find some tests impacting that conversion rate in the right direction. This will show you areas where you can double down to increase sign-ups even more. As conversion rates for sign-ups increase, the odds of the user/customer coming back and experiencing ongoing value go up. This, in turn, impacts your NSM positively.

    So in terms of hierarchy: NSM>Growth Equation (Model) > Objectives > Ideas

    Does that help?

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