Klaviyo Isn’t Lying to You. But Your Benchmarks Probably Are.
TL;DR: Klaviyo benchmarks are giving you flawed data and causing you to increase your spending on issues that don’t exist or are over-inflated. Here’s how to solve it, bring your Klaviyo costs down and improve your retention efforts with real data and predictions.
Stop Looking At Your Benchmarks. They’re Broken.
Most ecommerce brands are making retention decisions using distorted comparison data.
Not because they’re incompetent.
Not because Klaviyo is evil.
And not because dashboards are intentionally deceptive.
The problem is simpler—and more dangerous.
Most brands are benchmarking themselves against the wrong businesses.
That single issue quietly cascades into inflated send volumes, bloated SMS costs, unnecessary campaign pressure, and reactive lifecycle strategy.
And almost nobody talks about it.
The Hidden Problem Inside Most Klaviyo Accounts
Inside Klaviyo, there’s a setting most brands never revisit:
Settings → Organization → Industry
At first glance, it feels administrative.
Harmless.
But that field determines who your brand is benchmarked against.
That means it influences:
- Open rate expectations
- Click rate expectations
- Revenue benchmarks
- Deliverability comparisons
- Campaign performance framing
- Peer percentile dashboards
The issue?
Most ecommerce brands selected this years ago.
Then the business evolved.
The catalog changed.
The offer changed.
The positioning changed.
The customer changed.
But the comparison model didn’t.
So now you have:
- A premium apparel brand compared against mass retail
- A niche supplement company benchmarked against all ecommerce
- A specialized office supply brand compared against generic consumer products
- A wellness company grouped into oversized categories with completely different economics
The data becomes directionally misleading.
And operators start solving problems that don’t actually exist.
Why This Creates Expensive Decisions
Most founders don’t realize dashboards shape behavior.
If your dashboard tells you:
“You are below peer benchmarks.”
You react emotionally.
You start “fixing.”
More campaigns.
More SMS.
More automations.
More creative testing.
More aggressive promotions.
More frequency.
But here’s the systems-level issue:
Platforms like Klaviyo financially benefit from increased usage volume.
More sends.
More profiles.
More SMS usage.
That doesn’t make the platform malicious.
But it does create a structural incentive toward increased activity.
Which means operators need independent judgment.
This is the difference between tactical operators and strategic operators.
Tactical operators optimize what the dashboard says.
Strategic operators audit the incentives behind the dashboard first.
The Dangerous Psychology of Benchmarking
Benchmarking feels objective.
That’s why it’s powerful.
Humans naturally compare performance against peer groups.
The problem is that poor comparison groups create false urgency.
Imagine a boutique fitness apparel brand comparing itself against giant retail catalogs with entirely different customer behavior patterns.
The benchmarks become impossible to interpret.
So teams begin optimizing toward averages that were never relevant to begin with.
This creates what I call:
“Synthetic Underperformance”
The brand isn’t actually underperforming.
The comparison framework is broken.
But once leadership believes there’s a performance gap, they start introducing operational complexity to “fix” it.
And complexity is expensive.
Why More Sending Usually Makes the Problem Worse
When operators think performance is weak, the default response is volume.
Send more campaigns.
Increase SMS frequency.
Add images to texts.
Increase automation density.
But retention rarely improves through indiscriminate frequency expansion.
In fact, most mature brands experience the opposite:
- Higher unsubscribe rates
- Lower engagement concentration
- Audience fatigue
- Increased spam complaints
- Reduced deliverability quality
- Higher platform costs
- Lower marginal revenue per send
The issue isn’t usually “not enough sends.”
The issue is low signal quality.
Billion-dollar brands understand something smaller brands miss:
Incremental sends matter more than total sends.
Every additional message must justify itself economically.
If the first three campaigns failed to create meaningful movement, the fourth campaign often compounds fatigue instead of creating leverage.
Strong retention systems prioritize:
- Precision
- Timing
- Relevance
- Segmentation quality
- Audience intent
- Lifecycle positioning
Not brute-force frequency.
Why SMS Recommendations Are Often Misunderstood
One of the most common examples is MMS usage.
Many platforms encourage image-based SMS because richer media appears more engaging.
But in practice, text-only SMS frequently outperforms image-heavy messaging.
Why?
Because SMS is an interruption channel.
Consumers value immediacy and clarity.
Image-heavy texts often:
- Slow loading
- Distract from the offer
- Increase costs
- Reduce conversational feel
- Create visual fatigue
Yet brands continue adopting them because platform recommendations imply sophistication.
This is another example of operators confusing platform capability with strategic necessity.
Just because a feature exists doesn’t mean it improves economics.
The Operator Mental Model Most Brands Need
The best ecommerce operators think in layers.
Layer 1: Platform Metrics
What the dashboard says.
Layer 2: Benchmark Quality
Who the comparison group actually is.
Layer 3: Incentive Structure
Who financially benefits from increased activity.
Layer 4: Marginal Economics
Whether incremental actions improve profitability.
Layer 5: Customer Fatigue
How behavior changes under increased communication pressure.
Most brands stop at Layer 1.
Elite operators work through all five.
What Billion-Dollar Brands Actually Do Differently
Large operators rarely trust broad benchmarks blindly.
Instead, they focus on:
1. Internal Trendlines
Performance against their own historical baselines.
2. Cohort Behavior
How customer segments evolve over time.
3. Revenue Efficiency
Revenue per recipient.
Revenue per send.
Revenue per SMS delivered.
4. Incremental Lift
Whether additional messaging truly creates net-new revenue.
5. Audience Quality
Not list size.
Not send volume.
Actual customer intent.
This creates calmer decision-making.
Less reactive optimization.
Less unnecessary complexity.
The Execution Levers Most Brands Should Audit Immediately
1. Audit Your Industry Classification
Go to:
Settings → Organization → Industry
Make sure the category reflects your CURRENT business.
Not the business from three years ago.
2. Push for Deeper Sub-Vertical Benchmarking
Broad categories are operationally useless.
“Retail” means nothing.
“Ecommerce” means nothing.
A niche wellness brand should not benchmark against giant generalist stores.
3. Measure Revenue Efficiency
Stop focusing exclusively on opens and clicks.
Track:
- Revenue per send
- Revenue per SMS
- Incremental revenue lift
- Marginal unsubscribe cost
4. Reduce Benchmark Dependency
Benchmarks should inform judgment—not replace it.
Internal customer behavior matters more than external averages.
5. Audit Frequency Rationally
Every additional send should answer one question:
“What incremental outcome justifies this communication?”
If the answer is unclear, don’t send it.
The Real Lesson Here
The biggest retention mistakes usually aren’t tactical mistakes.
They’re systems mistakes.
Bad comparison groups.
Misaligned incentives.
Distorted dashboards.
Reactive decision-making.
Most brands don’t need more activity.
They need cleaner thinking.
Because once you understand how the system shapes behavior, you stop reacting emotionally to dashboards.
And that’s when retention strategy becomes profitable again.
If you want to see how your email program stacks up and what it would take to improve it, you can start with a free audit:
Book a Free Email & SMS Audit & Discover The True Revenue Potential of Your List >
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