Don’t get confused by averages.

Instead, just measure a core funnel metric, keep the funnel relatively constant — and then drive the metric up.

Why? You can stuff any funnel with mediocre leads and low-quality sign-ups. Top the funnel will then be huge, but conversion rates will be low. You can also tighten the sign-up and registration process so tightly that the conversion rate will be very high. But then you may be excluding folks from the funnel you may later wish had been in there.

In my own inner circle of SaaS companies, I see conversion rates from 1% — 20%. The latter is from highly qualified leads coming from a rigorous “Contact Me” process. The former is from a wide-open free product with limited incentives to convert.

Yes, it is important to compare yourself to others. But be careful about absolutes in other metrics. Instead, focus on what metrics will make you successful. Measure them, and make improving them each quarter a Top 5 goal.

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