Leading Indicators
Leading indicators measure specific changes in behavior that predict future business results. Unlike lagging indicators that tell you what already happened, leading indicators show you what's happening now and give you time to adjust course.
For product teams, leading indicators typically measure customer behaviors within the product—like engagement, feature adoption, or usage patterns—that the team suspects or knows will drive business outcomes like revenue or retention.
Why do leading indicators matter?
Leading indicators are essential because they're actionable. By the time you see a lagging indicator like revenue (or lack of it) in a dashboard, it's too late to take corrective action. Your team already made the choices that led to that result.
Leading indicators, on the other hand, give you real-time signals about whether you're on the right track. They allow teams to course-correct before it's too late.
How do leading indicators relate to product outcomes?
Product outcomes should be leading indicators of lagging business outcomes. For example, engagement is a common product outcome because for most companies, engagement is a good predictor of retention.
The challenge for product teams is translating business outcomes—which are typically lagging indicators—into product outcomes that measure leading indicators of customer behavior within their span of control.
If company leaders aren't sure which behaviors drive business results, the product team has to do the discovery work to identify the most likely behavior changes that will positively impact the lagging business indicators.
Learn more:
- Empower Product Teams with Product Outcomes, Not Business Outcomes
- Shifting from Outputs to Outcomes: Why It Matters and How to Get Started
Related terms:
- Product Outcome
- Lagging Indicators
- Metrics
- Customer Behavior
Last Updated: October 25, 2025