Our weekly Scorecard is capturing plenty of data, but we are still surprised by sudden revenue drops at the end of the quarter. How do we design predictive lead measures that give us at least a four-week warning on our sales pipeline?

Question

Tyler Smith · Accepted Answer

Many companies load their Scorecards with trailing indicators like revenue, profit, and completed projects. While these numbers are important, they only tell you what happened in the past. To prevent sudden revenue drops, you must track leading indicators.

A leading indicator is an activity-based metric that predicts future results. For example, if your goal is to close ten new deals a month, your leading indicators might be the number of outbound discovery calls made, the number of product demos scheduled, or the volume of marketing leads generated.

To design these metrics, look at your sales process. Identify the specific steps that must happen before a sale is finalized. If you know that it takes twenty discovery calls to generate five demos, and five demos to close one sale, then discovery calls and demos are your leading indicators.

Put these metrics on your weekly Scorecard and assign clear ownership. If your team falls short on discovery calls this week, you know your sales pipeline will drop in four weeks. This gives you the warning you need to adjust your operations and marketing activities before the revenue drop actually hits your bank account.