Lagging indicator

A measure of an outcome after it has happened: revenue, churn, win rate, margin.

DefinitionA measure of an outcome after it has happened: revenue, churn, win rate, margin.

Lagging indicators are accurate and too late to change. They belong in monthly and quarterly reporting, paired with a tested leading indicator that is reviewed weekly. Reviewing a lagging indicator more often does not make it actionable.

How it is used

A measure of an outcome that has already happened. It is reported monthly or quarterly and paired with a leading indicator that has been shown, on the company's own history, to move first.

Example

Revenue from existing accounts fell 6 percent in the quarter. The paired leading indicator, value coverage at cadence, had fallen two quarters earlier.

Where it goes wrong

Reviewed weekly in the hope that attention will change it. It cannot be changed; only what leads it can.

Articles that use this term

Board and management reporting · Finance and FP&A teams

KPI vs metric vs measure: what is the difference, and why most dashboards have too many of the first

Measure, metric and KPI are used as synonyms and are three levels of the same thing. A measure is a number computed from data, such as revenue or a count of accounts. A metric is a measure given a definition and a context, such as revenue per active account over a trailing twelve months. A KPI is a metric that someone owns, that has a target, and that a decision depends on. This page sets out the three, gives the test that separates a KPI from a metric, and shows how to cut a forty-tile dashboard to the five that matter.

17 Sept 20264 min read Board and management reporting · Sales teams

Leading vs lagging indicators in sales: what is the difference, and how to test that a leading one leads

Lagging indicators in sales report results after they have happened: revenue, churn, win rate. Leading indicators move earlier and can still be acted on: coverage at cadence, dormancy, pipeline created, utilisation before renewal. This page sets out the difference, lists common pairs, and gives the test most teams skip: checking on the business's own history that the supposed leading indicator actually moved before the lagging one, by how long, and how reliably.

17 Sept 20264 min read Board and management reporting · Sales teams

Sales KPIs for B2B sales teams: ten measures that matter, each with its formula and the export it comes from

The ten sales KPIs a B2B sales team should run on, whatever it sells, each with its formula, the export it comes from and what it tells you: value coverage at cadence, dormant accounts by prior value, share of wallet against similar customers, win rate from a stated stage, pipeline coverage against required, forecast bias per rep, time to first touch on new accounts, rep load against capacity, meeting to opportunity conversion, and customer concentration. Also the three measures most teams miss, the figures to drop, the identities, and who owns what.

17 Sept 20264 min read How-to guides

The difference pages: twenty pairs of sales terms that get swapped, and the line between each

A hub for the comparison pages on this site: churn and dormancy, win rate and close rate, pipeline coverage and weighted pipeline, OTIF and fill rate, gross margin and contribution, KPI and metric, leading and lagging indicators, concentration ratio and Herfindahl index, share of wallet and market share, renewal and retention, and more. Each page gives both definitions, computes both on the same rows, and says which to use when. This page lists them with the one-line difference for each.

17 Sept 20264 min read