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Using lead indicators to amplify sales

We're seeing a sustained pick-up in the housing markets in Sydney, Melbourne and now in TAS, of which, according to current census, is expected to continue into 2020. Or it won’t. 

The elephant in the room continues to be how macro environmental, legislative and economic influences will impact consumer sentiment and corresponding appetite for purchasing property. 

Trying to pick indicators in a relatively turbulent market is challenging at best. The traditional model of forecasting is to gauge the past as a means to pre-empt the future. However, a more progressive approach that’s starting to emerge, and gain traction, is the notion of using leading indicators to drive results.

Leading and lagging indicators are alternative performance measures that challenge the customary approach of evaluating an organisation’s achievements.

Broadly defined, a lead indicator is a predictive measure that can be implemented to contribute to future success, whereas a lag indicator is reliant on past performance and only measures what has occurred.  


Historically, companies concentrate on outputs (i.e. volume of sales for the month, number of new leads, etc). These after-the-event lag indicators are essential for charting progress but have limited value when attempting to calculate the future. Why? Because the only constant is change. Markets will evolve, client expectations will shift, regulatory and legislative disruptions occur and macro-economic factors are always fluid.

For retrospective lag indicators to provide insight variables need to remain stable, which is rarely the case. Conversely, lead indicators focus on influencing the future through predictive, proactive and controllable actions.

A business that is driven by lead indicators is constantly embracing and responding to variables by scaling activity to create an infrastructure that promotes success. That’s not to say that lag indicators be ignored.

There is a cause and effect chain between lead and lag indicators: lag indicators are useful in tracking the effectiveness of lead indicator initiatives and ensuring the desired business outcomes are being achieved. As such, both should be considered as part of a broader performance management strategy.   

As it relates to the mortgage industry, typical lag indicators include assessing auction clearance rates for the previous month or credit growth for the last quarter (i.e. passive (what’s happened)).

By comparison, lead indicators would include how many calls have been made to your existing database to check in on your client’s general financial well-being, change of circumstance or to discuss a product/ service that may be particularly relevant at this time of year (i.e. active (what can be done to accelerate uptick)).  

Other common examples include, how do you improve your return on investment (ROI) or revenue growth? The lag indicators would be to review your ROI and revenue growth incrementally (i.e. monthly, quarterly or annually).

The lead indicators would be to make the decision to strategically add three more products to your portfolio to actively increase ROI and growth. Equally, from a customer perspective, how can you increase customer satisfaction, company awareness and decrease attrition?

The lag indicators are to review a customer satisfaction score (i.e. NPS, Trustpilot or Google reviews), the volume of customer calls and the overall number of customers in your database (i.e. whether they’ve decreased, remained stable or grown).

The lead indicator would be to implement more proactive customer account management, dedicate a resource to marketing to build brand awareness/ credibility and determine measures to improve customer service.  

Here are some areas to consider to amplify sales in the remainder of 2019:

  • Set up strong lead indicators: Look at what the market is telling you and set specific actions to help accelerate sales, for instance increasing the number of calls by X number to see if a refinance is appropriate or if a diversified offering (i.e. asset finance) could assist with your client’s requirements.
  • Respond and scale: Monitor and assess results regularly, and scale activity to boost sales (i.e. increasing your presence by attending X events, hosting information sessions monthly or placing X social posts each week).
  • Make some noise: Prioritise communications and actively promote how you’ve helped clients achieve their goals, how you’re engaged in the community, industry wins/ achievements, etc.

Reference: https://www.intrafocus.com/lead-and-lag-indicators


Nick Young is a results-driven specialist who has more than 20 years’ experience in the mortgage broking industry, and now heads Trail Homes: Australia’s most established and longest serving trail book purchaser.

Using lead indicators to amplify sales

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