How can you tell if your sales indicators are leading or lagging?

1 What are leading indicators?

Leading indicators are metrics that predict future outcomes and show the potential of your sales pipeline. They are often related to the activities and behaviors of your sales team, such as calls made, emails sent, appointments booked, proposals submitted, and so on. Leading indicators can help you assess the quality and quantity of your sales opportunities, forecast your revenue, and adjust your tactics accordingly.

2 What are lagging indicators?

Lagging indicators are metrics that reflect past results and show the impact of your sales actions. They are often related to the outcomes and achievements of your sales team, such as deals closed, revenue generated, customer satisfaction, retention rate, and so on. Lagging indicators can help you evaluate the effectiveness and efficiency of your sales process, measure your return on investment, and reward your top performers.

3 Why do you need both types of indicators?

Both leading and lagging indicators are essential for a balanced and comprehensive sales dashboard. They complement each other and provide different perspectives on your sales performance. Leading indicators can help you identify problems and opportunities early, before they affect your bottom line. Lagging indicators can help you validate your assumptions and confirm your success. By combining both types of indicators, you can align your sales activities with your sales goals, and optimize your sales cycle.

4 How can you choose the right indicators for your business?

When selecting the best sales indicators for your business, there is no one-size-fits-all formula. It depends on various factors, such as industry, market, product, target audience, sales model, and objectives. To narrow down your options and choose the most relevant and meaningful indicators for your situation, consider asking yourself some questions. What are your specific and measurable sales goals? What are the key drivers and influencers of your sales performance? What are the critical stages and milestones of your sales process? What are the best practices and standards for your sales team? What are the most common challenges and risks for your sales team? How do you collect, analyze, and report your sales data? Answering these questions can help you make an informed decision about the best sales indicators to use.

5 How can you balance your leading and lagging indicators?

Once you have selected your sales indicators, it is essential to strike a balance between leading and lagging indicators for complete insights. To do so, use leading indicators to monitor your sales pipeline and set realistic targets, while using lagging indicators to evaluate your sales results and track progress against goals. Moreover, you can use leading indicators to identify and prioritize sales opportunities, as well as coach and motivate your sales team. Meanwhile, use lagging indicators to measure and improve the conversion rate, as well as reward and recognize your sales team.

6 How can you improve your sales indicators over time?

Your sales indicators are not fixed, as they can change and evolve over time. Therefore, it's important to review and update them regularly to ensure they are still accurate. To improve your sales indicators, you should collect feedback from your sales team, customers, and stakeholders. Compare them with your competitors, industry benchmarks, and best practices. Test different indicators, methods, and tools to see their impact on your sales performance. Finally, refine and optimize your sales indicators based on your findings - eliminating those that are irrelevant or redundant and adding those that are valuable or missing.