One of the biggest questions we wanted to tackle with Lean Analytics is “what’s normal?” It’s something we get asked all the time: “How do I know what’s a normal or ideal value for the metrics I’m tracking? How do I know if it’s going well or not? Should I keep optimizing this metric, or move on to something else?”
At the outset, many people cautioned us against trying to find a typical value for a particular metric. After all, startups are, by definition, trying to break the rules, which means the rules are being rewritten all the time. But we think it’s important to try to define “normal” for two big reasons.
First, you need to know if you’re in the ballpark. If your current behavior is outrageously far from that of everyone else, you should be aware of it. If, on the other hand, you’re already as good as you’re going to get—move on. You’ve already optimized a key metric, and you’ll get diminishing returns trying to improve it further.
Second, you need to know what sport you’re playing. Online metrics are in flux, which makes it hard to find a realistic baseline. Only a few years ago, for example, typical e-commerce conversion rates were in the 1–3% range. The best-in-class online retailers got a 7–15% conversion rate, because they had offline mindshare or had worked hard to become the “default” tool for purchase. These numbers have changed in recent years, though, because people now consider the Web the “default” storefront for many purchases. Today, ...