Leading and Lagging Indicators Help Your Business Grow

by | Aug 19, 2020 | Business | 0 comments

(Last Updated On: August 19, 2020)

If you’re working toward a goal, then you need to measure your progress. That’s true whether you’re a gym owner trying to grow your business or, say, a fitness client trying to lose weight.

And in both cases, it’s helpful to use KPIs (Key Performance Indicators) to see how you’re doing and make necessary adjustments.

Two KPIs are Leading and Lagging Indicators. What are they, and why are they important to your business?

Leading Indicators

  • You can think of leading indicators as inputs. These are the activities and actions you take to reach a desired outcome.
  • Your leading indicators influence and foretell your lagging indicators.
  • Leading indicators tend to be harder to measure but easy to influence.

Lagging Indicators

  • You can think of lagging indicators as outputs. These are the results or outcomes from your leading indicators.
  • A change made to your leading indicators will change your lagging indicators. 
  • Lagging indicators tend to be easy to measure but harder to influence, since they’ve already happened by the time you can measure them.

As an example, let’s consider that prototypical client who wants your help to lose weight – a certain number of pounds in a certain timeframe.

No problem. You know how to do the math. Let’s say he’ll need to train with you three times a week for three months while eating 1,800 calories per day. Those are your leading indicators – if he does these things, they will lead him to his goal.

You’ll be able to measure the lagging indicator, or how much weight he has lost, after it’s happened.

Make sense?

A Sales Example

So, how can you apply this principle to your business? Here’s a simple example.

Let’s say you currently follow up with clients three times once you have their information. You close about five clients a month, and you need to get to 10 closes a month.

You can start by doubling your follow-ups (leading indicator) to influence the likelihood of moving closer to your desired outcome (lagging indicator). 

Or, consider the four pillars: leads, front-end offers, core offers, and clients lost. Your leads could be a leading indicator for your new COs, for example. You can increase leads by some factor to move you closer to a new COs goal.

KPIs are just one of the important ways to measure your progress. Let’s talk about systems and procedures your gym needs to get you where you want to go. Our Success Coaches are expert at this, so schedule a free one-on-one call now.