In general, we all understand NSM is one metric that the whole organization goes behind. However, when you try to identify such a metric, you will have a hard time. More the stakeholders you involve, more will be the number of goals they would want to achieve, and every such goal will have one or more metrics, considering each of those goals to be important, You will find it even more harded to select a NSM .
You can use the below tests to check if you metric can be a NSM
Can you control this metric?
Are there ways to influence a change in the metric, Do you have levers can you leverage and push the metrics up? In other words is there an action you can take and course correct?
Is there a strong correlation with revenue?
Any metric you choose as an NSM should have a strong correlation to the revenue you generate. If the metric increases in value, your revenue should also increase.
Is it a measure of value that a customer receives from your product/service?
You should have a metric which measures the value it provides, say for example you are providing a demo to a customer. Two metrics of interest would be the Number of Demos provided, and another would-be sales post demo. In this case, both metrics have a strong correlation with revenue. However having the organization go behind the number of sales post demo is a better indicator of your business health, thereby a better NSM.
Can you track this metric on a daily/weekly basis, and does it measure progress?
Ideally, you should be able to track/determine the metric in accordance with the cycle of business, it could be daily, weekly, or monthly. You should have the ability to track this regularly. Let’s take an example here, say metric is " the number of students clearing an exam". This metric can be determined only after the results are declared. It cannot be determined regularly, also you cannot change the outcome of the result. A better NSM would be something that helps you evaluate the learnings of the student at regular intervals.
Is it a simple and ubiquitous metric?
The metric you choose should be simple, everyone in your organization should know what it is, and how it is determined. And it should mean the same to everyone, it should not take different meanings based on whom you talk to. if the metric is complex to determine, it is going to be so much harder for you to communicate, because of the complexity different teams could perceive it in different ways, which defeats the purpose of having an NSM.
Does the metric cover the journey of the customer ?
Ideally, if you have a metric that tracks the entire journey, it is the best suited for NSM. however, you can choose a metric that covers only certain parts of the journey. This selection should be done based on your goal. If the goal is product sales, then the number of units sold will be your metric, in this case, NSM will not consider the number of units returned, this is perfectly fine, you can always track returns as a guideline metric.
There is no easy way to determine an NSM that works for you, it’s driven based on what is important for the organization, and it is tied very closely to the mission and vision of the organization.