Bevelroom Consulting sales demand generation pipeline KPIs dashboard

Integrating Leading and Lagging Indicators (KPIs) for B2B Pipeline Success

The ability to make informed, strategic decisions quickly to fine tune sales pipelines can make the difference between healthy growth and disappointing results. At the heart of these decisions lies Key Performance Indicators (KPIs) that provide direct line of sight into the most important factors of performance.

The common misconception is that KPIs should just be outcome-based, lagging indicators. In reality, businesses should establish and measure leading indicators tailored to their operational needs and strategic goals. These often-overlooked signals that provide early warnings and insights into future performance.

In this guide for B2B leaders, we’ll cover how to integrate leading indicators into your client development pipeline and transform your sales strategy. Rather than just reacting to outcomes after the fact, progressive B2B leaders are using input KPIs to identify issues before they impact sales, allowing for quick adjustments that keep the sales pipeline flowing smoothly. Once established, they marry these predictive insights with strategic actions to optime their sales process.

What's Covered in This Guide

Benefits of a Healthy Demand Generation Pipeline

Wouldn’t it be great if your demand generation team operated like a well-oiled machine with flawless forecasting accuracy, all of your sales reps hitting their targets consistently and your pipeline was full of high-quality opportunities?  

This is basically what a healthy sales pipeline looks like. It is measurable and reliable, and comes with several operational benefits:

 

  • Predictable Revenue Forecasting: With better indicators, you can develop sound revenue projections. Pipeline predictability is essential for planning business investment strategies and managing cash flow effectively.

  • Effective Resource Allocation: Understanding the pipeline’s status at any given stage provides direct evidence for allocation of resources — time, budget personnel — to the highest quality leads and segments. Better allocation can lead to better returns on investment since you’re fueling more effective activities.

  • Enhanced Sales Effectiveness: Regular pipeline analysis helps to highlight the best sales plays and pinpoint bottlenecks and weak spots. This helps sales team refined their sales strategies and processes as well as more quickly adapt to competitive moves and market shifts. A well-managed pipeline also helps track performance and personalize sales coaching. 

 

But, how do you know how healthy your pipeline is? That’s where leading indicators come into play.

 

Lagging vs. Leading Indicators

Lagging Indicators: The Rearview Mirror

When we think of KPIs, lagging indicators are probably what comes to mind.

Lagging indicators are like your business’s rearview mirror. They provide a measure of outcomes based on past actions. Common examples include revenue, profit margins, and client satisfaction.

These metrics are straightforward to measure and understand because they reflect definitive outcomes. However, it is important to recognize an inherent limitation with all lagging indicators: they’re measuring what has already happened.

While this is necessary for tracking results, it doesn’t always help explain why those results occurred. Lagging metrics are also usually too general in nature to break down the root causes of undesirable outcomes.  

Focusing only on lagging indicators in your business is like trying to drive forward while looking in the rearview mirror—informative, yes, but not very helpful for steering.

Leading Indicators: The Road Ahead

Leading indicators, on the other hand, are forward-looking metrics that can predict future performance outcomes. 

They are like inputs into a process that help you to anticipate changes and adjust strategies accordingly, even in real-time.

Leading indicators are great because they can tell you what’s going on with a specific step in your pipeline and how it will impact future performance, while there is still time to do something about it.

To define leading indicators, start by looking at your customer journey and sales process. Look for logical points in the flow at which data can be generated for measurement.

Types of leading demand generation KPIs for B2B might include: brand awareness and search visibility (SEO) metrics, qualified lead volume, conversion rates, sales meeting performance, customer retention and attrition.

While leading indicators don’t always connect directly to business outcomes, they do provide early signals of outcome performance as long as they measure key steps in the flow toward desired outcomes.

Why You Need Both

Leading indicators, while predictive, are based on assumptions and models that can be influenced by a myriad of factors, making them inherently uncertain. Lagging indicators, though historical, offer concrete evidence of what’s been effective (or not).

Bringing together both leading (inputs) and lagging (outputs) indicators into your business strategy is akin to farming. To cultivate thriving crops, farmers don’t just focus on the harvest; they pay careful attention to the soil conditions, the watering schedule, and the sunlight exposure—the leading indicators of the crop outputs.

Just as a farmer must understand the relationship between the crop inputs and the harvest yield (outputs), a business decision maker should know how early actions and metrics (leading indicators) influence final outcomes (lagging indicators).

By monitoring and adjusting these inputs, you can influence the quality and quantity of your outputs. Similarly, by tracking leading indicators in your business, you can make proactive adjustments to improve your lagging indicators, ultimately enhancing overall performance.

The key to optimizing performance before it happens is to identify and then measure (ideally in real time) the inputs that are the most predictive signals of future outcomes. By doing so, you’re not just reacting to past performances but proactively shaping future success.

Customer-Centric Strategies Tailored for B2B Service Businesses

Get our step-by-step approach for developing a B2B demand generation strategy and system for growing service-based businesses that is customer-centric, insight-driven, digitally enabled and adaptable for future growth.

Combining Leading and Lagging KPIs to Improve Pipeline Health

In B2B services demand generation, grappling with declining sales in long, complex sales cycles can be a significant challenge. In most cases, the root causes of disappointing performance aren’t immediately apparent because there are so many different factors that influence pipeline growth.

Leading indicators serve as vital signs, offering real-time insights into the health and efficiency of each stage of the sales process. By closely monitoring these leading metrics, you can start to piece together a clearer picture of where bottlenecks or inefficiencies are occurring.

Imagine the sales pipeline as a river, with the current representing the customer’s journey from initial contact to closed deal. You can use leading indicators to assess the flow through your sales pipeline. For example, a sudden drop in website traffic or social media engagement might signal an upstream issue in lead generation, similar to a blockage or drought upriver. Similarly, a bottleneck in deal negotiations could indicate challenges in how proposals are perceived.

 

Is your demand generation system helping you find these bottlenecks?

By establishing and tracking leading indicators at each step of the sales pipeline, you can gain the real-time insights needed to diagnose and correct issues affecting sales performance. This proactive approach allows for quicker adjustments, ensuring the sales process is optimized and aligned with the company’s strategic goals, ultimately leading to improved sales outcomes and shorter sales cycles.

By observing and interpreting these leading indicators at each stage of the sales pipeline, you can more quickly diagnose and fix contributing issues.  For instance, extended durations in the negotiation stage may highlight a need for better needs discovery, communication of value or adjustments in pricing strategies.

 

CRM and pipeline analytics for real-time monitoring and response

This approach requires not just the identification and tracking of these leading indicators but also a system for real-time analysis and response. Modern CRM software and analytical tools can offer invaluable insights here, providing dashboards that visualize the data and facilitate swift decision-making. Regular review meetings become essential touchpoints for discussing these insights and debating strategic adjustments.

Each new metric and conversation with your team provides more evidence for where to focus efforts so they can have the most impact on outcomes.

A Step-by-Step Process to Implement Leading Indicators

By integrating leading indicators as real-time signals at each step of the sales pipeline, you can gain the clarity needed to diagnose issues and implement corrective actions. Here are the steps to get this done.

Step 1: Identify Leading Indicators for Each Stage of the Demand Generation Pipeline

The first step is to review your demand generation pipeline by each stage. For each of these stages, identify leading indicators that can provide early warnings about performance and potential issues. For a B2B services company, this could be as follows:

Pipeline Stage

Leading Indicators

Lead Generation & Nurturing: The initial stage where potential leads are identified and nurtured for sales readiness.

# new leads by source: marketing campaigns, search, social media engagement, events, sales outreach, word-of-mouth.

Sales Qualification: The process of assessing whether leads fit the ideal customer profile (ICP).

Conversion rate of leads to qualified sales meetings, # new opportunities, avg response times, # touchpoints to proposal/quote.

Proposal Submission: The stage where proposals are tailored and submitted to qualified leads.

# proposals presented, avg time from proposals to win/loss, # touchpoints proposal to win/loss, % proposals revised, % proposals accepted.

Negotiation: Discussions around pricing, terms, and conditions.

Avg time of negotiation phase, % of proposals entering negotiation.

Close: The final agreement and signing of the deal.

Win rate, avg time from proposal to close, loss reasons.

Relationship: This post-sale stage can last for months or years and encompass many deals and touchpoints with the client.

Satisfaction rate, referral rate, advocacy level.

 

Step 2: Implement Real-Time Tracking and Analysis

With leading indicators defined for each stage, the next step is to implement systems and processes for real-time tracking and analysis. This includes identifying where the necessary data will come from. Potential sources include marketing channel analytics, sales pipeline and deal transactions, delivery records and client feedback. It’s crucial to ensure these sources are reliable, accessible, and capable of providing data in a timely manner.

The most common data sources and tracking activities usually includes:

  • Utilizing CRM and marketing automation to track the progress of leads through the pipeline and measure the identified leading indicators.

  • Setting up dashboards that provide a visual representation of these metrics, enabling quick assessment and decision-making.
  • Establishing regular review meetings to discuss the data and its implications for sales strategy and operations.

 

Once data sources are identified, set up systems to measure these indicators consistently. Here are some things to consider as you proceed:

 

  • Choosing the right tools: Select software or platforms that can capture and store the data you need. This usually includes CRM software for sales and customer data, project management tools for operational metrics, and analytics platforms for website and social media engagement.

  • Integrating systems: Ensure that your tools can communicate with each other where necessary to provide a holistic view of performance indicators. Integration platforms such as Zapier and Integrately as a service (iPaaS) can be helpful in automating data flows between different systems.

  • Defining metrics clearly: Be clear about what each metric measures and ensure everyone involved understands these definitions. This clarity is critical for consistency in data collection and interpretation.

 

 

Step 3: Diagnose Issues Using Leading Indicators

By monitoring these leading indicators, you can start to diagnose where in the pipeline issues are occurring. For example:

  • A decline in qualified lead volume or content engagement indicates a need to improve marketing efforts.

  • Weak search visibility might indicate need for SEO and/or addition of paid media.

  • High cost-per-lead may indicate need to reallocate marketing spend.

  • A low conversion rate of leads to qualified opportunities might suggest problems with lead quality or the criteria used for qualification, requiring a review of target customer profiles and qualification processes.

  • A big drop off from marketing lead volume to sales qualified lead volume could reveal a mis-alignment between marketing and sales goals and lead criteria.

  • Extended negotiation phases could point to issues with pricing strategies or proposal content, suggesting a need for adjustments in how offers are structured or communicated.

  • Low CRM adoption, task completion can signal a need for sales training.

  • Negative client feedback might correlate with customers’ likelihood to not renew or expand.

 

As you begin to monitor indicators, the focus shifts to interpretation so that you can plan and prioritize how to respond in context. You’ll need to decide: “Are these red flag indicators telling us to stop what we’re doing and implement a fix immediately?” Or is it something to continue monitoring to see how bad it gets?

Here are suggestions to help your team calibrate responses:

 

  • Establish baselines and internal benchmarks: Determine average performance levels for each leading indicator to understand how far off performance is compared to previous levels and trends over time.

  • Look for patterns and correlations: Use statistical analysis to find relationships between leading indicators and lagging outcomes. This can help validate the predictive value of your chosen leading KPIs.

  • Create dashboards: Organize indicators into visual reporting for easier monitoring and trending over time. Your CRM and analytics tools will offer standard reports. In some cases, you may want to create more customized readouts.

  • Regular reviews: Incorporate indicator discussion into regular pipeline reviews to review the data, to monitor trends and make timely decisions.

 

Step 4: Implement Corrective Actions and Monitor Outcomes

Once issues have been diagnosed using leading indicators, it’s time to implement targeted corrective actions in the appropriate stages of the pipeline. The ultimate goal of tracking leading indicators is to inform strategic decisions in the right places at the right times.

 

Having good leading indicators will help to:

  • Set actionable targets: Based on your data and its analysis, set specific, measurable targets for improvement or maintenance.

  • Developing response plans: For each leading indicator, have a plan in place for potential actions if the data shows a significant trend or change. This could involve adjusting marketing strategies, enhancing customer service, or reallocating resources.

  • Communicate findings and plans: Ensure that insights and strategies are communicated effectively across the organization. This encourages alignment and collective action towards common goals.

 

Each action should be specifically designed to address each issue as evidenced by the indicator. These actions might include:

  • Enhancing marketing content and landing page design to improve lead conversion.

  • Refining the ICP (ideal client profile) for clarity on highest value target accounts to focus marketing and selling investments.

  • Adjusting proposal strategies and coaching sales staff to boost conversion from opportunity to close.
  • Putting more emphasis on referral strategies to monetize positive client relationships.

 

As these corrective actions are implemented, both the leading and lagging indicators should be continuously monitored to assess the impact of changes made. If you see improvements in leading indicators preceding positive shifts in lagging indicators, then you know you’ve selected good early indicators. The timing of improvements will depend on your sales cycle length and the time it takes to implement corrective actions.

These new leading KPIs not only validate the effectiveness of the actions taken, but also improve visibility into future performance.

Common Pitfalls to Avoid

Implementing leading indicators is not without challenges. Try to avoid the most common mistakes that can actually subtract value or even prevent the use of improved KPIs:

 

  • Overcomplicating the system: Avoid tracking too many indicators at once. Focus on those most predictive of your key outcomes to prevent data overload and analysis paralysis.

  • Ignoring context: Data needs context to be meaningful. Ensure you consider external factors that might influence your indicators, like market trends or economic shifts. Also, calibrate the degree of severity and level of response to fresh indicators.

  • Resistance to change: As with all change, there is usually some level of resistance, especially if KPIs lead to actions without proper empowerment and incentive. Engage the right people early and often in the design of the overall process and selection of KPIs. Ensure clear understanding of what each KPI measures and their implications for the team. Communicate the value of measurement in driving business success and cultivating a data informed culture.

  • Failing to act: Measurement without the right action won’t add much value. Ensure you are selecting the right indicators and interpreting them correctly for the most impactful actions.

 

Using Leading Indicators to Justify Investment

One of the best uses of leading indicators is to provide sound justification for new investments. They can strengthen the case for change and expanded budgets, ensuring that every dollar spent is a strategic step towards pipeline expansion and not just a shot in the dark.

Leading indicators help justify investments because they can provide early intelligence on market movements and customer behaviors that affect sales strategies. They allow you to anticipate trends, identify opportunities, and allocate resources where they can have the most significant impact.

 

Here are some examples of how they can do this:

  • New product development: Suppose your customer satisfaction surveys (a leading indicator) reveal a growing demand for a specific feature that your products currently lack. This insight justifies the investment in R&D to develop this new feature, potentially capturing a larger market share and satisfying customer needs before competitors catch on.

  • Shifts in market focus: If intent data shows that target companies in a particular industry are starting to seek solutions that align with your service offerings, it’s a reliable indicator that now is the time to invest in more marketing for that industry. Similarly, if the average deal size in your CRM starts increasing, it’s a cue that customers might be willing to buy more, or buy more premium services.

  • Increased marketing budget: Leading indicators such as in-market intent, qualified website traffic and content engagement, couple with source data, can be an early signal to justify more spend or reallocated spend, allowing you to better monetize demand.

  • Expanding the sales team: Having a robust pipeline with reliable sales forecasts provides a solid case for investing in more selling talent, especially when you know which segments to focus additional resources into.  

  • Mitigating risks and maximizing ROI: The use of leading indicators is not just about recognizing opportunities; it’s also about mitigating risks. By observing leading indicators, you can avoid over-investment in areas that do not show promise. If the leading indicators for a new market territory show low engagement despite initial marketing efforts, it may signal a need to pivot strategies or reallocate investment to more responsive markets.

 

Leading indicators offer a strategic advantage when it comes to justifying new investments in your pipeline. They provide the clarity needed to make informed, proactive decisions, ensuring that your investments are not just safe bets, but strategic ones that will yield substantial returns and sustainable growth.

Final Thoughts

By following this guide, B2B service businesses can effectively implement leading indicators, moving beyond traditional lagging metrics to drive proactive, informed decision-making. This strategic approach not only enhances operational performance but also positions companies for sustained success in a competitive landscape.

Start with evaluating your current use of KPIs and consider how incorporating leading indicators could enhance your strategic decision-making and operational performance. Form a cross-functional team to lead this initiative, ensuring a broad perspective and fostering a culture of data-driven excellence and strategic foresight.

Identifying the right leading KPIs requires a deep understanding of your business processes, customer behaviors, and market trends.

Progressive B2B organizations that embrace the use of leading indicators will be a step ahead of competitors in building more robust client pipelines. Perhaps an even more impactful benefit is the halo effect of improved performance measurement and management across the company.

Checklist: 10 Steps to Customer-Centric Demand Generation

Get the accompanying checklist for developing a modern demand generation strategy and system that is customer-centric, insight-driven and digitally enabled, so you can work smarter and build the business of your dreams more confidently.

Ready for Customer Driven Growth?

At Bevelroom Consulting, we believe in an approach that works for the business and the customer. Our approach to demand generation brings in a healthy dose of design thinking that optimizes for both the customer experience and business outcomes.

We help B2B businesses who:

  • Are unsure where to start in marketing their business
  • Don’t know how well their marketing is doing
  • Want to be more customer-centric and data-informed
  • Need to prioritize limited resources for the biggest return

 

If you’re looking to grow in a more customer-centric way, we’d love to speak with you.

 

 

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