After revenue teams implement a new account-based marketing or sales strategy, they usually ask the same question: How the heck do we know if this is working?
Knowing how your ABX campaigns and plays will perform is like predicting the weather: It’s impossible to say for certain if you’re going to have a sunny day or a storm (or in B2B parlance, successful campaign) until it’s already happened. But with a trustworthy forecast, you can plan your day (aka your ABX strategy) knowing you need sunglasses, or that you might need to change your plans and bring an umbrella.
In the world of ABX marketing and sales, certain performance indicators can serve either as historical precedent for guessing future results, or as indicators predicting future success. These are known as lagging metrics and leading metrics respectively, and they serve distinct purposes and insights at different stages.
Check out this video for a quick rundown about leading and lagging indicators.
Read on to learn how to use lagging and leading metrics to predict sunny or cloudy skies for your account-based strategies and campaigns.
Lagging Metrics
Lagging metrics — sometimes called outcome metrics — are indicators that reflect the results of marketing or sales actions that have already occurred.
In B2B sales, lagging metrics are crucial for understanding the effectiveness of marketing and sales strategies, but do not offer immediate feedback for adjustment. These retrospective metrics are akin to looking at historical weather data to understand what weather conditions occurred in the past and using it to guess future weather patterns.
You can determine your account-based efforts were successful if you see lifts in these metrics, such as higher closed rates and increased velocity through the pipeline for high-intent ICP accounts.
Here are some examples of lagging metrics in B2B sales:
Revenue
This fundamental lagging metric measures the total income generated from sales activities over a specific period, providing a clear indicator of past performance.
Pipeline
When analyzed historically, pipeline metrics show how effective past lead generation and qualification efforts have been over a specific period.
Average Sales Price (ASP)
ASP is often considered a lagging metric when evaluating the outcomes of completed sales, analyzing the effectiveness of pricing strategies, and understanding market trends after transactions have occurred.
Conversions
When looking back at a specific period, conversion rates serve as lagging metrics, assessing the effectiveness of past sales and marketing strategies.
Velocity
Velocity indicates how fast deals were closed in the past, which can inform process improvements and training needs.
Profit Margin
Calculated after all sales are made and costs are accounted for, profit margin helps in evaluating the financial success of sales strategies and operational decisions after they have been implemented.
Customer Churn Rate
Determined by analyzing past customer behavior after customers have left, this metric provides valuable insights into customer satisfaction, product or service quality, and loyalty, which are critical for assessing the long-term sustainability of the business.
Annual Contract Value (ACV)
ACV provides insights into the value of customer relationships and the effectiveness of sales strategies focused on acquiring and retaining customers.
Customer Lifetime Value (CLV)
Despite its forward-looking calculation, CLV is considered a lagging metric because it relies on historical data (such as past purchases, churn rates, and revenue patterns) to project future value.
Leading Metrics
Leading metrics are indicators that provide early signs of future performance and outcomes. They are predictive in nature, allowing businesses to pivot on strategies, plays, and campaigns in flight. Leading metrics in B2B sales are particularly valuable for identifying trends, forecasting outcomes, and implementing proactive measures.
Here are some examples:
Sales Pipeline Volume
This metric allows sales teams to assess whether they have enough potential business in the pipeline to meet future sales targets, guiding strategic decisions such as resource allocation, prioritization of opportunities, and identifying areas where additional lead generation efforts may be needed.
Lead Conversion Rate
Lead conversion rate is an early indicator of the effectiveness of sales and marketing efforts. A high or improving conversion rate suggests that sales and marketing strategies are effectively resonating with the target audience, leading to a higher proportion of leads becoming customers. Monitoring changes in this rate can help predict future sales success and signal when adjustments might be needed in targeting, messaging, or sales tactics to improve performance.
Average Deal Size
Average deal size indicates trends in customer spending behavior and the company’s success in selling higher-value solutions or bundles. An increasing average deal size is a positive leading indicator of potential revenue growth, suggesting that sales efforts are effectively targeting more lucrative opportunities or that the company is successful in upselling or cross-selling to existing customers.
Sales Cycle Length
The length of the sales cycle is a key predictor of sales efficiency and effectiveness. Shortening sales cycles can indicate improvements in sales processes, better customer fit, or more effective sales tactics, potentially leading to quicker revenue realization and increased capacity to handle more deals over time.
6sense Provides Even More Leading Metrics
6sense also gives you and your revenue team insight into the following leading metrics:
ICP Web Traffic and Engagement
Increased web traffic and engagement from your target audience suggests a growing interest in your products or services. It helps in assessing the effectiveness of marketing strategies aimed at attracting your ICP.
Contact Coverage
High contact coverage means you’re effectively engaging with a broad and relevant audience within your target market, and suggests that you have a strong foundation for building relationships and generating sales opportunities.
Reach
Reach indicates the potential size of your audience and the awareness of your brand among potential customers. Expanding reach is often the first step in funneling prospects into more engaged interactions.
Engaged Personas
This metric goes beyond basic reach to measure how actively different segments of your target audience interact with your brand, such as through content downloads, event participation, or social media engagement. High engagement from key personas is a positive leading indicator of interest and alignment with your offering.
View-Through Rates
View-through Rates show the indirect impact of visibility and brand awareness on consumer behavior. High view-through rates indicate that the content is making an impression on potential customers, potentially leading to future conversions.
6QAs
MQAs signal the accounts that are more likely to become customers, guiding sales teams on where to focus their efforts for the highest potential return. 6sense offers another indicator called 6sense Qualified Accounts, or 6QAs. These are accounts that meet your Ideal Customer Profile and have just reached a critical tipping point — moving from the consideration stage into the decision/purchase stage of the buying journey.
Hand-Raisers
Hand-raisers have explicitly shown interest in learning more about a product or service, such as by signing up for a webinar or requesting a demo. This metric directly indicates individuals or accounts with a higher likelihood of moving through the sales funnel, allowing sales and marketing teams to prioritize these leads.
Response Time
While this might seem like an operational metric, it’s a leading metric for customer satisfaction and conversion rates. Faster response times can lead to higher satisfaction and increased chances of converting leads into sales, as prompt responses are often correlated with better customer experiences and engagement.
Quality Activities
Quality activities refer to meaningful interactions and engagements with potential or existing customers, such as personalized follow-ups or consultative selling efforts that address specific customer needs. This metric tracks the effectiveness and impact of sales and marketing activities on moving prospects through the sales funnel, indicating the potential for future sales success.
Meetings Booked
Securing a meeting often precedes the closing of a deal. High numbers of meetings booked suggest a healthy pipeline of prospects interested in discussing the products or services further, potentially leading to more sales.
Look to Leading Over Lagging
Leading metrics are often more helpful for revenue teams than lagging metrics because they provide early indicators of future performance, allowing for proactive adjustments and strategic planning. This makes sense since lagging metrics offer insights based on past performance, which don’t allow for timely intervention to influence future results.
While lagging metrics are essential for understanding where a business has been, leading metrics are crucial for guiding where a business is going. Just as weather forecasting has become an indispensable tool for planning and preparedness, leading metrics are invaluable for enabling revenue teams to anticipate future trends and make informed decisions to drive growth and success.
