Leading indicator
A metric that predicts future performance before it appears in financial results. Unlike lagging indicators — revenue, net profit — leading indicators allow a business to anticipate and act before problems show up in the accounts.
In practice
In SaaS, the new-user activation rate within the first seven days is a leading indicator of 90-day retention: users who fail to engage with core features in the first week churn at 80 percent within three months. In franchising, the revenue of a new outlet in its opening month is a leading indicator of 24-month profitability. Identifying and monitoring leading indicators — typically harder than tracking lagging ones — is a mark of organisational maturity.