Leading and Lagging IndicatorsJohn Golden2021-04-09T08:12:15+00:00
Leading and Lagging Indicators
Lagging indicators shine a light on the past but leading indicators predict the future!
Every sales team uses KPIs (Key Performance Indicators) to measure a sales team’s performance such as…
As important as they are these particular KPIs are actually lagging indicators and while they provide good information, it is too late to impact them. Even more important are the frequently overlooked leading indicators of success and we will focus on both here. For an in-depth look at sales metrics, download the eBook “Metrics In Sales Management – Leading & Lagging Indicators” and/or review the information provided on this page.
Lagging Indicators are important because they provide a clear analysis of what has happened thus far. They can help you compare data points like the volume of sales vs gross margin – you may be selling a lot but reps are discounting heavily and eroding margin. Or through analysis, you can see the win ratios for certain salespeople lag behind others which provides good information for targeted coaching.
Lead Scoring: Assigning a score to a lead in your CRM makes it very easy for salespeople to prioritize which leads to immediately focus on. Identify what the most important characteristics of any opportunity are needed in order to make it the right fit for your business.
The industries or verticals you focus on.
Size of company
What company segments you sell into such as small, medium, or enterprise.
Key pain points that your solution solves
Based on the issues your product or service would solve.
For example: paid lead versus word of mouth, which would be far more valuable.
Intended purchase date
A more accelerated timeframe might score higher.
This company is selling Air Conditioner units to commercial real estate builders. Each different criteria is awarded a score of 1-10 depending on how close it is to the ideal profile.
As you can see when you click the example – Lead A scored 36 out of 50, which makes it a very good lead whereas Lead B scored 20 out of 50, which makes it a poor fit.
Once leads convert to opportunities, then it is a matter of figuring out how many winning deals it takes to profitably sustain the company’s pipeline, and monitoring that. You’ll now need to know your Win Rate for opportunities— basically the opportunity-to-close conversation rate, the number of deals that actually turn to wins.
In Pipeliner, the most important lagging indicator is something not available in any other CRM: the Archive. The Pipeliner CRM Archive is arranged exactly the same as the active pipeline view. Leads and opportunities contain all information present when they were archived—including Documents, Emails, Notes, Social Media interactions, Tasks, and Activities.
As you can see, it’s not just the indicators, but how they are displayed and used. And with Pipeliner, that view has now gained another major improvement with its all-new feature called Sales Performance Insights. With Sales Performance Insights a sales leader or sales representative can see, at a glance, how various leading and lagging indicators have been combined so far for a sales unit, for reps as compared with other reps, and for territories as compared with others.
Not only can reps be compared, but so can various indicators for those reps.