Why Industry Benchmarks Are Useless: Focus on Unit Economics Instead

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Yesterday, I had a call with a prospect that really got me thinking about lifecycle stages and how we measure success in marketing and sales. The conversation revolved around their lifecycle marketing program and conversion rates—from lead to MQL (Marketing Qualified Lead) to SQL (Sales Qualified Lead). Their core question? How can we improve these rates?

But as we dove deeper, it became clear that their focus on improving conversion rates wasn’t rooted in a clear strategy. The leader they referenced had simply decided the current rates weren’t “good enough.” When I asked what “good enough” actually meant, the prospect admitted they didn’t know. They were just hoping to “get the rates higher.”

And this brings up a big problem in how many businesses approach performance improvement: focusing on industry benchmarks instead of their own unit economics.

Why Comparing Conversion Rates Across Industries Doesn’t Matter

It’s natural to ask, What are other companies in our industry doing? But in reality, industry benchmarks often don’t mean much—especially post-COVID. Between 2020 and 2023, sales cycles got longer, funding dried up, and startups had to get real about their business models. Conversion rates that might have been acceptable when money was free-flowing no longer cut it today.

Even if your conversion rates match or exceed “industry standards,” they could still lead to terrible business outcomes. Why? Because those benchmarks don’t take your specific business’s unit economics into account.

The Real Question: Are Your Conversion Rates Profitable?

The better question to ask is: What are the unit economics behind your conversion rates?

Unit economics boils down to this: If your current conversion rates stay the same, are you making money?

• If you’re losing money, you’re in trouble.
• If you’re breaking even, you’re in survival mode.
• If you’re profitable but not hitting your goals, it’s time to map out a plan to improve your numbers.

This approach forces you to focus on your own business’s sustainability and growth, rather than chasing arbitrary benchmarks that might not even be relevant anymore.

Forget Benchmarks—Reverse Engineer Success

Here’s the path forward: Stop obsessing over industry benchmarks, and instead, reverse-engineer your goals. Start by asking:

1. What financial metrics do you need to hit?
2. What conversion rates are required to get there?
3. What steps do you need to take to close the gap?

This customer-focused, data-driven approach aligns your marketing and sales efforts with your business goals. Instead of shooting for “better than average” or “higher than before,” you’re working toward outcomes that matter: profitability, scalability, and sustainability.

Final Thoughts

At the end of the day, benchmarks are a distraction. They’re not customer-focused, and they’re definitely not business-focused. What matters is your unit economics.

If your conversion rates aren’t profitable, you need to fix that. If they are, but you’re aiming for greater profitability—say, to hit a KPI or position your company for an exit—then you need to map out the exact changes needed to hit those goals. That’s the real path forward.

As I told the prospect, this isn’t just about improving for the sake of improvement. It’s about understanding where you want to go and creating a clear plan to get there.

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