In this video, we break down the difference between a leading and lagging metric and help you understand when it's best to use each. Getting the right metrics in front of the right people is an important part of telling an impactful story and giving people the ability to use data to guide their decision making. Collecting data is important, but making it useful is where the true value comes in.
Hello! Have you heard the terms leading and lagging metrics get thrown around in your office or maybe with your analytics team, but you’re not quite sure what they mean? Today, we’re going to go over what exactly they are, when to use them, and what each can kind of tell you. First, let’s start off with the lagging metric. For a lot of companies that have longer sales cycles, you are going to have one big goal, maybe two or three big goals. How you measure those goals, the leads that you’re driving, maybe if you’re a healthcare company, it’s the actual patients that are coming to you, sometimes it takes people a lot of research to make that commitment before they are considered a lead. That lead or that patient, that number, may be considered a lagging metric. For us, we have contact us form submissions. We have free consultations on our website and we understand that when a user first comes to our website it’s highly possible that they are not going to convert on that first visit. They may convert four or five or six visits later on down the road. So that lagging metric is really what we want to measure.That is really the needle that we are trying to push is getting leads through the door there. That can take awhile, so if our team that is actually implementing the different campaigns that we are running and things along those lines are looking at these lagging metrics, it is hard for them to know when things are going astray and maybe we aren’t on line to meet our goals. It is hard for them to know that looking at these lagging metrics before it is too late. By the time that they understand that are tactics aren’t working if they are just looking at lagging metrics, it’s going to be by the end of the quarter. By then we can’t go back and do anything to influence those leads’ decisions anymore. As far as a leading metric goes, it is a little bit of the opposite. That is taking a step back and looking at the actions that users are taking before they actually convert. They should have a pretty high correlation to conversions. For instance, if we know that a lot of our leads sign up for our newsletter before they actually reach out for a conversation with us, that newsletter engagement metric could be used as a leading metric. A lot of time in Google Analytics, we will actually set up the lagging metric as our goals, but then we will go in and create events in Google Analytics that align more with the leading metrics. For example the newsletter, if our team knows that we aren’t getting enough newsletter submissions, we can go in and kind of push the newsletter a little bit more. We can create content to push on social media or whatever the situation is to help drive those newsletters. That way we are staying top of mind for our users. We are getting in front of them on a weekly basis and we keep them coming back to our website. That is really what we want. I know whenever we set up our events, we use an event category that is client engagement, so any of the engagement metrics that we have on our site whether that be a newsletter or maybe it is a CTA click. Those things, like that, are what we are using as our leading metrics to gauge, what our results will be. Then we forecast our results for later on down the road. So really understanding when to use each one of these is super important. If you have any other questions, or just want to continue receiving tips, tricks, answers to some of the common questions that you may have about Google Analytics, Data Studio, Tag Manager, BigQuery, maybe it is conversion rate optimization that you are wondering about, we are going to continue posting videos like this throughout each week so make sure you stay tuned and go up and subscribe to our newsletter. That is where we will be letting you know what new content we are publishing each week. Stay tuned. There is more to come.