November 15, 2018

The Importance of Leading & Lagging Metrics in Marketing

Jeff Marcoux | Vice President of Product Strategy & Marketing, TTEC, GreenFig Instructor
Written by:

Jeff Marcoux | Vice President of Product Strategy & Marketing, TTEC, GreenFig Instructor

Goals. Metrics. SQL. AQL. MQL. KPI.  

We as marketers all have metrics that we are measured by. That we live and die by.  However, is there a way to have an early warning system that can help you see what is coming up ahead and adapt to ensure you’re on target?  

This is where the concept of leading and lagging indicators comes into play.  

Lagging Indicators

Lagging indicators are usually focused on results and are the output of your marketing department and your company. This makes them relatively easy to measure but you cannot influence or improve them once they have happened, although, they will fuel your strategy going forward. (eg: last quarter’s results may impact what you do this quarter, but you can’t change last quarter).  

Some examples of critical lagging metrics for marketing to be tracking are:

•    ROI of your marketing efforts

•    Brand Recognition

•    Churn Rate

•    SQL or MQL

•    Product bookings or revenue

•    ARR/MRR

•    EBITDA

So why aren’t lagging indicators enough?  The difficulty comes when you want to improve your output proactively.  How can you impact the results when if by the time you get the results the effort or marketing activity has already been done?

This is where leading indicators come in.

Leading Indicators

By their name, leading, these can be tracked and influenced actively to improve your outcomes. If you select the right ones for your KPIs, then you will have your early warning system.  When I was at Microsoft, we tracked these regularly so that we could course correct, try new things, and adapt to ensure we hit our targets.


Some examples of leading indicators could be

•    Daily or monthly active users: perhaps you know how much revenue an average user brings you or how long they have to be engaged to reduce their risk of churn.  Daily Active User (DAU) or Monthly Active User (MAU) can be a great leading indicator to the health of your app, product, or business

•    Unique Visitors: How many new people are finding your company or product?

•    Clicks to opens to forms to MQLs: Tracking this backward and knowing your conversion rates stage to stage can let you know how many MQLs or other leading activity you need to get to your target number of SQL or SALs. For example, I need to get 100 SALs to hit my target for this quarter, and my conversion rate from MQL to SAL is 10%, that means I need 1000 MQLs to hit my SAL target.  I can then reverse even farther back to say what my conversion rates that lead to MQLs are? Working back like this enables you to see if you’re likely to come up short so you can adjust your activity or change your approach before finding out you missed your quarter.

•    # of thought leadership articles published

•    # of speaking engagements

•    # of new newsletter subscribers

The key to leading indicators is to ensure that you identify the right ones for your product(s) and KPIs.  I like to start with what are the key things I’m responsible for and accountable for, how is success measured for those?  Once I understand that, take a step back and look at what drives those metrics, what are the things that if you ensure you do or hit, you know you’ll hit your KPI, your lagging indicator.  Involve your team in this because they may have ideas you never even thought of.  See what leading indicators you can measure today and where you need to improve your tracking and measurement.

LATEST FROM BLOG

Related Posts.

Why GreenFig? The Value of a Microdegree in Applied Business Science

The World Economic Forum cites, “[the digital economy] is disrupting almost every industry in every country. And, these changes herald the transformation of entire systems of production, management, and governance.” Where land, oil, and capital drove the past three Industrial Ages, this new “4th Industrial Age” is powered by “digital oil” – data. Companies are building and deploying systems of intelligence to prospect, discover, and refine the digital oil of the digital economy. And, the miners of this digital oil are “business scientists”. Business scientists must understand how to capture, observe, and utilize customer, financial, market, and product data. They do not necessarily have to be technical – as in know how to code – instead, they must learn how to generate and review business data and use their creative skills to operate business application software. In the US, politicians, academia, and industry leaders are currently placing a tremendous focus on technical training, coding, and other STEM programs. However, the unspoken truth is that many of these positions will eventually be eliminated through advances in artificial intelligence and machine learning. Additionally, many people are simply not interested or well-suited for these technical programs, degrees, and jobs. However, people who are creative and critical thinkers – products of liberal arts programs – are ideally suited to fill the positions of the digital economy. All they need is some additional specialized training and knowledge. Micro Education companies and microdegrees are well-designed to provide such training.

Thursday, July 19, 2018

Contact us

Need a quote.