Leading Indicators vs Lagging Indicators

Leading and lagging indicators are extremely helpful in the pursuit of nearly any goal, whether personal or business.

And yet in a world that always talks about events and outcomes, it’s not uncommon for us to ignore the inputs required to get those end results.

Both indicators play an important role, but too often our conversations and observations focus on lagging indicators, when in many cases they’re not as ‘important’.

Most content you’ll read on this topic will focus on business indicators, like improving workplace safety, customer satisfaction or customer lifetime value.

While these indicators are very useful in business, I’ll also show you why these are just as useful in your personal life.

Developing an understanding of both leading and lagging indicators has helped me in building and achieving goals in my lifestyle businesses, like income generating websites (which become valuable, sellable assets) and my SEO service business.

But it’s also helped with hitting personal goals like cutting down to a 6-pack and improving the quality of my sleep.

In this post, you’ll learn why leading indicators should, in many situations, be your primary focus. I’ll later put an ‘SEO spin’ on this, specifically for those of you interested in online business and digital marketing.

A Personal Anecdote

In 2021, after the lockdowns had lifted and life almost looked normal again, I wanted a challenge that had nothing to do with business, money, or my family. I was long overdue for a physical challenge.

Where I’d previously used a sporting event as that challenge, this time I wanted to get shredded so I could see my abs. I’d never done it before, so it seemed as good of a time as any to rise to the challenge.

The process to achieve this goal was simple:

• Eat fewer calories than I burned
• Get enough protein
• Be active, and ideally lift heavy things

I tracked these metrics daily, but only paid attention to the weekly average.

Lifting a lot of heavy things in one day didn’t matter if I didn’t do anything for the rest of the week. Fasting for 24 hours would only make a tiny impact on my week’s caloric average.

My success (or lack of) was based on those leading indicators.

My coach promised me that, if I hit those metrics, the outcome I sought would ensue.

And it did. I’d been so focussed on ensuring those leading indicators were on track that it only took a few months to see the lagging indicator that I’d defined as ‘success’.

That is, by seeking every opportunity to reduce my caloric intake, while maximising my protein intake and exercise, I reached the lowest body fat percentage of my life.

It seems pretty obvious to say this, but had I done the inverse, and focused my attention on a body fat %, instead of the inputs, nothing would have changed.

Demoralising Your Potential

Conventional success is mostly focused on lagging indicators—results, events and outcomes. As examples, some people may think that they’ll be ‘successful’ with:

• a certain amount of money in the bank,
• a job that pays a certain amount per year,
• hitting certain KPIs at work,
• a website that earns a certain amount per month,
• a certain type of physique or appearance,
• to be happily married, or
• to own certain pair of shoes.

Let’s set aside judgement for a moment and not pick on these individual outcomes as good or bad. While we may try to be virtuous in our daily lives, we’re still part part of a social and economic system that values many ‘broken’ ideals.

These outcomes can be helpful in goal setting, but observing them as they are, only to stop there can manifest a flawed mindset:

• “Why don’t I have enough money in the bank yet?”
• “Why doesn’t my job pay more even though I want it to?”
• “If only my boss would recognise me as a great team member.”
• “I wish my website earned me more each month.”
• “Why don’t I look as good as I should?”
• “I’ll finally be happy when I find my perfect partner.”
• “If I could afford those new shoes, I’d definitely be popular”

Sitting around and asking these questions, or continually reciting these type of things aren’t going to help you. In fact, it’s very likely doing the opposite, sapping energy from your day to day.

I’m willing to argue, that there’s a much better way that can help all of us to realise more of our potential.

Pre-Success

Enormous goals can be motivating, but they can just as easily be overwhelming. Let’s assume that you truly believe a bank balance of $1M will allow you to be stress free and happy. Today however, you’re $128k in debt.

Your big $1M goal might be doing more harm than good. While it could be a perfectly useful ‘north star’, if you believe you aren’t successful until you get there, it’ll be a long and painful journey.

What I love about leading indicators, is that they’re a form of ‘pre-success’.

The amount you have in the bank is a lagging indicator of a whole lot of leading indicators, like:

• increasing your monthly income,
• reducing your monthly expenses,
• reducing your personal debt, and
• increasing the amount you save or invest.

By focusing on leading indicators—which are within your control—you can influence the lagging indicators that come down the line. But perhaps more importantly, you’re able to attain ‘success’ on a much shorter timeframe. This will give you the motivation to keep going.

Call it what you want. Mojo, good run, lucky break, or a winning streak—success breeds success as it removes doubt and helps you to gain momentum.

While a number in a bank account may be one person’s idea of success, I’d bet on the person that feels successful every day. They are focused on those all ‘hitting’ their all-important leading indicators, knowing that they are on the right path.

Leading Indicators of Online Assets

Leading indicators are metrics that predict future outcomes.

Lets once again assume that you’re building a simple online business, like a rank and rent or affiliate website.

These types of assets often rely on organic search traffic to perform. This organic search traffic is a lagging indicator of a successful SEO campaign, which is made up of different leading indicators.

In SEO, a lot of people seem to leave things up to chance, but leading indicators are awesome because they’re almost entirely in your control. By focusing on what leads, your business will have the greatest probability of success.

In an effort to make a point, I’m going to simplify SEO down to 3 key leading indicators:

1. Technical Health: A technically sound website is a crucial leading indicator. This can involve fixing broken links or images, reducing or eliminating redirects, and so on. With a high or perfect ‘health score’, your site has the highest probability of being crawled and indexed by search engines.
2. Content Volume: Everything that your site publishes is excellent. So really, the main lever you have to pull is one that involves publishing a high volume of new content.
3. Backlinks: With similar constraints to guarantee quality, volume of backlinks increase your site’s probability of better rankings, traffic, and revenue. This is the case for HARO backlinks, just as it is for other methods like guest posting and niche edits.

By focusing on these leading indicators, you are setting the stage for success, which lags behind.

You simply chop wood and carry water, day in, day out, ignoring all of the other noise around you.

Lagging Indicators: The Fruits of Your SEO Efforts

Lagging indicators measure the outcomes that follow your efforts.

These indicators are not fully within your control but are influenced by the leading indicators I listed above.

While lagging indicators may take time to kick-in, they’re ultimately what you’ll be using to evaluate the effectiveness of your strategy. Let’s consider 3 lagging indicators from your SEO campaign:

1. Better Indexation: Many websites have thousands of pages or blog posts, but not all of them are in Google’s index. A healthy website should have close to 100% of pages indexed. This might seem like an odd metric if you’re used to running small websites, but for very broken, very large websites with little link equity, this is an important metric.
2. Improved Rankings: When you’re building a website on a brand new domain this becomes clear. First, you’ll begin to rank in the top 100 for different keywords, then the top 50, top 20, and later page 1. From there progress slows down as you compete for the top 3 positions.
3. Increased Website Traffic and Conversions: As your search engine rankings improve, so too should the number of visitors to your site. This increased traffic can lead to more actions, such as newsletter sign-ups, sales enquiries, or purchases, ultimately driving conversions and your business goals.

Then What?

If you’re doing it right, most of your focus is on leading indicators for most of the time.

As you gain momentum however, this shifts. For tactical things in your career, business, or finance, a certain strategy may work well this year, but stop being effective in the future.

Or possibly once you reach a certain lagging indicator, you’re no longer focused on building, but instead maintaining the outcome at stake.

By doing this, your process will evolve over time, so you can be sure you’re on track for the final outcome you’re looking for.

Taking some time to step back and analyse your lagging indicators allows you to refine your strategy, continuously improve, or free up energy or resources to be spent elsewhere.