Glossary Lagging Indicator

What is a Lagging Indicator?

A lagging indicator is a metric whose measurement and thus impact takes a long time. Often, lagging indicators most accurately assess the business impact that your team should achieve. It measures output from a system you can’t exercise direct control over. Besides, due to the longer time frame, lagging indicators are not a viable choice for team feedback on the effectiveness of the ongoing project. For instance, if you want to improve customer retention, you must track Customer Churn Rate. As the churn rate is slow to change, you take longer to show results.

Business Benefits of a Lagging Indicator

  1. Acts as a clear indicator of your organizational success.
  2. Measures the results of your efforts to attain long-term business growth.
  3. Is easy for companies to measure.
  4. Helps to set future goals or targets.

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