Lagging vs. leading metrics – The importance of a fine balance
So, you want to lose 10 lbs?
Not the opening line you were expecting, right? Stick with me here. I promise it will soon make sense. But for now, back to weight loss.
You step on your bathroom scale and discover you’ve met your goal. This backward-looking (lagging) indicator gives you something to celebrate. However, it sheds no light on how you got there. This may not matter to you now, but if you want to lose another 10 lbs at some point in the future, you’ll wish you’d made the effort to gather forward-looking (leading) indicators, for example, the calorie input and output it took to lose that weight.
All of this to say, lagging metrics are important; they tell you where you were at any given time, but if you actually want to affect future performance, you need leading metrics, too.
So, how can you apply leading metrics to your practice? I won’t lie. It’s going to take effort. One of the reasons so many practices rely on lagging metrics is because, quite frankly, they’re far easier to measure. But remember, hard work builds character – and in this case, it builds a stronger practice – so let’s take a look at some examples.
Clinic XYZ has email addresses for one thousand clients. Last year, the clinic sent them all appointment reminders. 300 of the 1000 replied and booked appointments. The number of email addresses on file, as well as the 3% positive response rate, are leading indicators.
What might Clinic XYZ do to generate a greater response? Add more email addresses to its database and/or improve the positive response rate by sending out better and/or more frequent reminders.
The owner of Clinic XYZ has decided to follow his dentist’s lead. Before clients leave her practice, she encourages some of her long-standing clients to schedule their next wellness appointments. The number of future appointments scheduled is a leading indicator.
What might the owner of clinic XYZ do to schedule more future appointments? Encourage each and every client to rebook before leaving the clinic.
Clinic XYZ offers wellness plans that allow clients to pay 12 affordable monthly instalments towards a year’s worth of wellness visits. The percentage of clients participating in a wellness plan is a leading indicator.
What might clinic XYZ do to increase revenue? Increase the level of wellness plan participation.
Clinic XYZ offers a loyalty program. Among other benefits, participating clients get discounted veterinary services in exchange for an annual fee. To reap value from their participation, program members can be expected to make more frequent trips to their clinic.
What might clinic XYZ do to increase the number of expected visits? Encourage more clients to join its loyalty program.
Given I live and breathe metrics, implementing lagging and leading indicators comes naturally to me, but that doesn’t mean you can’t try this at home. Why not give one of the examples above a try? All you really need on your side is time and commitment. And of course, I’m so passionate about this topic, I’d be delighted to hear from you if you’d like to run a question by me, raise a concern, or share a positive experience you’ve already had with a leading indicator.
In closing, I’ll simply say this: while your rear-view mirror is a must for safe driving, I wouldn’t suggest relying on it alone. Remember, keep your eyes on the road ahead.