Leading vs Lagging Indicators
Leading indicators predict the future. Lagging indicators report the past. Track both, optimize leading.
Your Progress
Section 4 of 5Predict, Don\'t React
Lagging indicators tell you what happened (revenue, churn, growth). Leading indicators predict what WILL happen (engagement patterns, activation rates, feature usage). Track both, but optimize leading indicators to change future lagging outcomes.
Leading vs Lagging Examples
❌ Lagging Indicator
Tells you what happened last month. Too late to act.
Delay: 30-60 days
✅ Leading Indicator
Predicts future revenue. Can fix NOW.
Action: Improve onboarding → see revenue impact in 30 days
How to Find Leading Indicators
Example: Revenue (lagging)
Example: Users who activate (leading) → convert to paid (lagging)
Example: Activation happens Day 1. Conversion happens Day 30. 30-day lag.
Improve activation rate → see revenue increase in 30 days
Common Patterns:
- Engagement (leading) → Retention (lagging)
- Activation (leading) → Conversion (lagging)
- Feature usage (leading) → Upsell (lagging)
- Support tickets up (leading) → Churn up (lagging)
You Can\'t Change the Past, But You Can Change the Future
Lagging metrics (revenue, churn) already happened-you can\'t change them. Leading metrics (engagement, activation) are happening NOW-you CAN change them. Improve leading indicators today, see lagging indicators improve tomorrow.
Key Takeaways
- •Leading indicators predict future, lagging indicators report past
- •Track both, but optimize leading to change lagging outcomes
- •Find leading indicators: ask \"What user behavior predicts this outcome?\"
- •Common pattern: Engagement (leading) → Retention (lagging)