The Reality Check
Most SaaS companies dramatically underestimate their churn rates. The difference between "acceptable" churn and "industry average" can be the difference between profitability and failure. Here's what the data actually shows.
What Founders Think
What Data Shows
The takeaway: If your churn feels "acceptable," you're probably underperforming. Benchmarking against real data is the first step to improvement.
Monthly Churn by Company Size
Company size has a massive impact on churn rates. Larger companies with more resources and established processes typically retain customers better.
Average Monthly Churn Rates (2024)
B2B SaaS
Consumer SaaS
Data sources: 2024 surveys of 2,500+ SaaS companies, adjusted for self-reporting bias. Top quartile represents the best 25% of performers in each category.
Churn by Industry
Different industries have fundamentally different churn dynamics. Understanding your industry's baseline is crucial for realistic goal-setting.
Monthly Churn by Industry (2024)
Industry variance: Churn can vary 3x between industries due to switching costs, competitive dynamics, and customer sophistication. Your industry's average should be your floor, not ceiling.
Revenue Churn vs Logo Churn
Most companies track "customer churn" but miss "revenue churn." The difference can be significant, especially with tiered pricing or expansion opportunities.
The Churn Gap
Logo Churn (Customer Count)
Percentage of customers who cancel
What most companies track. Simple but incomplete.
Revenue Churn (Dollar Impact)
Revenue lost from churn + downgrades
The real economic impact. Always higher than logo churn.
Why Revenue Churn Matters More
- • Accounts for downgrades and reduced usage
- • Includes expansion revenue lost
- • Better predictor of cash flow impact
- • More relevant for unit economics
Industry Revenue Churn Benchmarks
Churn by Pricing Tier
Higher-priced tiers typically have lower churn rates, but the relationship isn't linear. Understanding tier-specific churn is crucial for pricing strategy.
Monthly Churn by Price Point (2024)
Pricing strategy insight: Each $10 increase in monthly price reduces churn by ~1-2%. However, the churn reduction benefit diminishes above $200/month.
What to Do with This Data
Benchmarks are useless without action. Here's how to use this data to improve your churn rates.
Immediate Actions
- 1Calculate your current churn rate across all metrics (logo, revenue, by tier)
- 2Compare against industry and size benchmarks
- 3Identify which customer segments have the highest churn
- 4Set realistic improvement targets (10-20% reduction)
Strategic Improvements
- 1Implement win-back campaigns for at-risk customers
- 2Improve onboarding to increase product adoption
- 3Add usage-based triggers for customer success outreach
- 4Consider pricing adjustments based on tier performance
Model Your Churn Scenarios
Use our churn impact calculator to model different retention strategies and see how they affect your growth trajectory.