Leading and Lagging Indicators
Lagging indicators shine a light on the past but leading indicators predict the future!
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.
Examples of Lagging Indicators include:
# of units sold
# of different products sold
# of deals won
# of deals lost
You should quickly define which lagging indicators are important to your business and set up a schedule of autogenerated reports to review on a weekly or monthly basis as necessary.
Leading Indicators › LEADS
Word of mouth
Cold prospecting (phone, text, email, LinkedIn networking, etc.)
Leading Indicators › LEADS (continued)
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.
Size of company
Key pain points that your solution solves
Intended purchase date
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.
Key Lead & Opportunity Formulas
You’ll need to know the overall qualification rate of leads to opportunities. Here is a good formula for figuring that out:
You’ll need to know the size of your average opportunity. A good formula for figuring that out is:
You also have the issue of the number of leads your sales team can handle. Here is the first formula for figuring this out for the team:
The formula for figuring out what lead volume an individual sales rep can handle is:
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.
Here is a great formula for that:
Tracking Leading & Lagging Indicators
in Pipeliner CRM
In the main Pipeline view, you can see how many leads are available, how many opportunities are in each stage of the pipeline, and how many are overdue (per the average length of time for each stage).
Your primary leading indicators are right here:
On the right-hand side, the target is always visible, showing your primary lagging indicators, and how they are affected by all the leading indicators as they now stand.
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.