2026 Benchmarks Updated Quarterly

SaaS Churn Rate Benchmarks

How does your churn rate compare? Filter by industry, company size, and pricing model to find your benchmark.

Overall SaaS Median

4.7%

monthly / 36% annual

B2B Median

3.9%

monthly churn

B2C Median

6.7%

monthly churn

Enterprise

1.5%

monthly churn

Find Your Benchmark

Select your filters to see the benchmark range for your specific situation.

Your Benchmark Range

3 – 7%

monthly churn for All Industries, All Sizes

Compare Your Churn Rate

%

Churn Rate Benchmarks by Industry

Industry is one of the biggest determinants of churn rate. Highly regulated industries like cybersecurity and fintech tend to have lower churn because switching costs are high and compliance requirements create lock-in. Consumer-facing sectors like edtech and media see higher churn because individual users are more fickle and price-sensitive. The table below reflects median churn rates observed across SaaS companies in each vertical during 2025-2026.

Industry Monthly Churn Annual Churn Typical Range
B2B SaaS (Overall) 3.9% 37% 2 – 7% monthly
B2C SaaS (Overall) 6.7% 56% 4 – 9% monthly
Fintech / Banking 3.2% 32% 2 – 5% monthly
Healthcare / Healthtech 4.1% 40% 3 – 6% monthly
Edtech 7.8% 62% 5 – 10% monthly
E-commerce / Retail SaaS 5.6% 50% 4 – 8% monthly
Marketing / Adtech 5.2% 47% 3 – 7% monthly
HR / People Tech 4.5% 42% 3 – 6% monthly
Developer Tools 3.8% 37% 2 – 5% monthly
Cybersecurity 2.9% 30% 2 – 4% monthly
Logistics / Supply Chain 4.0% 39% 3 – 5% monthly
Media / Entertainment 7.2% 58% 5 – 10% monthly
Real Estate Tech 5.0% 45% 3 – 7% monthly

Note: Annual churn is not simply monthly churn multiplied by 12. It's calculated as 1 - (1 - monthly rate)^12, which accounts for compounding.

Churn Rate Benchmarks by Company Size

Your customers' size and your average contract value (ACV) are among the strongest predictors of churn. Enterprise customers with large contracts rarely churn on a whim - the decision involves multiple stakeholders, there are dedicated customer success managers, and switching costs are enormous. At the other end of the spectrum, micro-SaaS products charging under $500/year see the highest churn because a single user can cancel with zero friction.

The implication is clear: if you serve SMBs, a 5% monthly churn rate might be perfectly normal. But if you sell enterprise contracts and you're seeing 5%, something is seriously wrong. Context matters.

Segment Monthly Churn Notes
Enterprise ($50k+ ACV) 0.5 – 1.5% Multi-year contracts, dedicated CS teams, high switching costs, executive relationships
Mid-Market ($5k-50k ACV) 2 – 5% Moderate switching costs, some CS coverage, mix of annual and monthly billing
SMB ($500-5k ACV) 3 – 7% Mostly self-serve, low switching costs, price-sensitive, single decision-maker
Micro / Prosumer (<$500 ACV) 6 – 12% Highest churn, lowest commitment, impulse purchases, many free alternatives

Churn Rate Benchmarks by Pricing Model

How you charge has a direct impact on how long customers stay. Annual contracts create commitment and inertia that dramatically reduce churn. Usage-based pricing tends to correlate retention with actual value delivery - customers who use more, pay more, and stay longer. Monthly billing offers the most flexibility to customers, which is great for acquisition but terrible for retention. Freemium models sit at the high end because users who converted from a free tier often have low perceived switching costs and may revert if they don't see immediate value.

Model Monthly Churn Why
Annual Contracts 1 – 3% Upfront commitment creates inertia. Customers mentally write off the cost for 12 months. Fewer decision points to cancel.
Monthly Billing 4 – 8% Every month is a new decision point. Low switching cost. Easy to cancel on a bad day.
Usage-Based 3 – 6% Cost scales with value received. Users self-select out when they stop getting value, but active users stick.
Freemium (Paid Tier) 5 – 9% Low perceived switching cost. Free tier is always available as a fallback. Users may downgrade rather than cancel entirely.

Revenue Churn vs. Logo Churn: Which Matters More?

There are two ways to measure churn, and they tell very different stories. Logo churn (also called customer churn) counts the percentage of customers who leave. Revenue churn (also called MRR churn) measures the percentage of recurring revenue lost. These numbers almost always diverge, and understanding why is critical.

Consider this scenario: you have 100 customers and lose 5 in a month. That's 5% logo churn. But if those 5 customers were all on your $29/month plan while your remaining customers average $200/month, you only lost $145 out of $19,855 in MRR - that's 0.7% revenue churn. The story is completely different.

Most investors and experienced operators focus on net revenue retention (NRR), which factors in expansion revenue from existing customers. A company with 5% logo churn but strong upselling can actually have negative net revenue churn - meaning existing customers generate more revenue over time even after accounting for losses. This is the holy grail of SaaS economics.

Logo Churn

  • • Counts customers lost, not revenue
  • • Good for understanding product-market fit
  • • Treats a $29/mo customer the same as $29,000/mo
  • • Best for early-stage companies with uniform pricing

Revenue Churn

  • • Measures actual MRR impact
  • • Accounts for contract value differences
  • • Net version includes expansion revenue
  • • Best for growth-stage and enterprise companies

Use our MRR Churn Impact Simulator to see how your churn rate compounds against your actual revenue over 12 months.

What's a Good Churn Rate for SaaS?

This is the most common question in SaaS retention, and the honest answer is: it depends. Your benchmark should be calibrated to your industry, customer segment, and pricing model (use the interactive tool above for that). But here's a general framework that most SaaS operators use as a starting point for monthly churn rate:

Under 3%

Excellent

You're in the top tier of SaaS companies. Your product has strong product-market fit, your customers are getting clear value, and your retention mechanics are working. At this level, focus on maintaining what you have and expanding revenue from existing customers. Companies like Slack and Zoom operated in this range during their hypergrowth phases. Explore sticky feature adoption strategies to stay here.

3 – 5%

Good

Solid performance for most SaaS companies, especially those serving SMBs with monthly billing. You have a healthy business, but there's meaningful upside in reducing churn further. Every percentage point you shave off here translates directly to faster growth. Start with onboarding activation milestones and health score monitoring to identify at-risk customers earlier.

5 – 7%

Average

You're in the middle of the pack. This is typical for B2C SaaS and SMB-focused products. While not alarming, churn at this level makes it hard to grow efficiently - you need to acquire a lot of new customers just to replace the ones leaving. Prioritize understanding why customers leave. Take the Churn Risk Quiz to identify your biggest levers, or build a cancellation save flow to rescue churning customers at the door.

7 – 10%

Needs Work

Churn is actively limiting your growth. At 8% monthly churn, you're replacing nearly two-thirds of your customer base every year. This often signals a product-market fit issue, onboarding problem, or pricing misalignment. Before investing in acquisition, invest in retention. Use the Churn Priority Finder to figure out where to start, and consider implementing smart dunning to recover involuntary churn immediately.

10%+

Critical

This is a leaky bucket that needs immediate attention. At 10%+ monthly churn, you're losing your entire customer base in under a year. This almost always points to a fundamental problem: you may be attracting the wrong customers, your product may not deliver enough value, or your pricing may be misaligned with perceived value. Start with the Retention Leverage Audit to identify the single highest-impact action you can take right now.

How to Reduce Your Churn Rate

Knowing your benchmark is step one. Actually improving your churn rate is where the real work begins. The most effective approach depends on where your churn is coming from. Here are the most common churn types and the experiments proven to address them:

Payment Failures (Involuntary Churn)

Up to 40% of all churn is involuntary - customers whose payments fail without them even knowing. This is the lowest-hanging fruit in retention because these customers want to stay.

Smart Dunning Playbook →

Poor Onboarding

If customers don't reach their "aha moment" within the first 7-14 days, they're dramatically more likely to churn. Activation milestones are the fix.

Activation Milestones Playbook →

Low Engagement / Feature Adoption

Customers who only use one or two features are sitting ducks for churn. The more deeply embedded your product is in their workflow, the stickier it becomes.

Sticky Features Playbook →

No Save Flow at Cancellation

If your cancel button goes straight to "are you sure?" and then "goodbye," you're leaving 10-15% of salvageable customers on the table. A well-designed save flow can rescue them.

Cancellation Save Flow Playbook →

Not sure where to start? We've built several free tools to help you prioritize. The Churn Risk Quiz takes 2 minutes and tells you your biggest risk area. The Churn Priority Finder helps you rank your retention initiatives by impact. And the MRR Simulator shows you exactly how much revenue you'd save by reducing churn by even 1%.

Ready to start reducing churn?

Browse our library of proven retention experiments, each with step-by-step implementation guides.

Explore Experiment Library

Frequently Asked Questions