Churn Rate Benchmarks by Industry
Churn Rate Benchmarks 2026
What Is a Good Churn Rate?
A good monthly churn rate for B2B SaaS is below 1%. But the right benchmark depends on your segment - enterprise, SMB, consumer, and eCommerce have very different baselines. Here is how yours compares.
Churn Rate Ranges Explained
Monthly churn compounds fast. A 5% monthly churn rate means you lose nearly half your customer base each year - even if you never notice it month to month.
Monthly
Annual equiv.
Rating
<1%
<12%
Excellent
1–2%
12–22%
Good
2–5%
22–46%
Average
5–10%
46–72%
Concerning
>10%
>72%
Critical
Compounding math: A 2% monthly churn rate feels manageable. Over 12 months it means you have replaced 21% of your customer base just to stay flat. At 5% monthly you need to replace 46% of customers annually. This is why monthly churn above 2% makes sustainable growth very difficult without exceptional acquisition.
Churn Rate Benchmarks by Industry 2026
Churn rate norms vary dramatically by customer segment and contract structure. Comparing your rate to the right industry average matters more than chasing an arbitrary number.
Industry
Monthly
Annual
Good rate
B2B Enterprise SaaS
0.3–0.6%
5–8%
<5%
B2B Mid-Market SaaS
0.6–1%
8–12%
<8%
B2B SMB SaaS
1.5–2.5%
15–25%
<12%
Consumer SaaS
2–4%
22–40%
<15%
Subscription eCommerce
5–10%
30–45%
<20%
FinTech / Financial SaaS
0.5–1.5%
6–18%
<8%
Healthcare SaaS
0.5–1%
6–12%
<6%
Marketing & Agency Tools
2–4%
22–40%
<15%
Benchmarks reflect aggregated industry data. Your actual benchmark should be against direct competitors in your market segment and price tier.
B2B SaaS Churn Rate Benchmarks
B2B SaaS churn benchmarks split sharply by contract size. Enterprise contracts (over $10k ARR) churn far less than SMB contracts - both because of switching costs and because enterprise CSM coverage catches problems before they become cancellations.
<5%
Enterprise SaaS
>$10k ARR per account
Long contracts, dedicated CSMs, and deep workflow integration make switching painful. Churn spikes at renewal if value is not clearly demonstrated 60 days before the date.
8–12%
Mid-Market SaaS
$2k–$10k ARR per account
Adoption depth at 90 days is the single strongest predictor of renewal. Accounts that use 3+ core features churn at half the rate of shallow adopters.
15–25%
SMB SaaS
<$2k ARR per account
Small businesses close, get acquired, or cut software budgets in downturns more often. Churn at this segment is partly structural, not product failure.
Why your overall churn rate hides the real problem
A B2B SaaS company with a blended annual churn of 12% might look manageable. But segment by contract tier:
4%
Enterprise accounts
75% of ARR
11%
Mid-market accounts
20% of ARR
38%
SMB accounts
5% of ARR
Enterprise accounts - 75% of ARR - are churning at only 4%. SMB is churning at 38% but represents just 5% of ARR. A blended churn metric masks this. Segment your churn by ARR tier before deciding where to invest in retention.
eCommerce Churn Rate Benchmarks
eCommerce churn benchmarks vary by subscription model. Subscription boxes have the highest churn - often 35–50% annually - while SaaS-style eCommerce tools look more like SMB software.
eCommerce segment
Monthly churn
Good annual rate
Subscription boxes
8–12%
<25%
Replenishment subscriptions
3–6%
<20%
Membership programs
2–4%
<15%
SaaS-style eCommerce tools
1.5–3%
<12%
Repeat purchase rate vs churn rate
For non-subscription eCommerce, churn is measured differently. Track repeat purchase rate within 90 and 365 days. A 30-40% repeat rate within 12 months is considered good. Below 20% means customers are not becoming habitual buyers.
Why eCommerce churn is so high
Subscription eCommerce competes with convenience. When the subscription becomes friction - too much product, wrong curation, hard to pause - customers cancel. The best eCommerce retention programs give subscribers control: easy pausing, skipping, and swapping without a full cancel.
SaaS Renewal Rate Benchmarks
Renewal rate is the inverse of annual churn - and it is often what investors and boards track. But renewal rate alone misses expansion. Net Revenue Retention (NRR) is the more complete metric.
95%+
Enterprise SaaS
NRR target: 120%+
High-touch CSM coverage, ROI review calls, and multi-year contracts drive renewal above 95%. Expansion from upsells pushes NRR above 120%.
85–90%
Mid-Market SaaS
NRR target: 110%+
Adoption reviews at 60 days pre-renewal and health scoring catch at-risk accounts in time to intervene. NRR above 110% signals strong expansion motion.
75–85%
SMB SaaS
NRR target: 100%+
SMB renewal is harder to defend with high-touch CS. Self-serve health nudges, in-app training, and easy billing management are the retention levers.
NRR above 100% means you grow even when you churn. If enterprise accounts renew and expand (seats, usage, add-ons) at a rate that exceeds revenue lost from churned accounts, your net revenue goes up without any new customer acquisition. Best-in-class B2B SaaS companies target NRR of 120-130%.
What Drives Churn
Failure to reach first success milestone
CriticalUsers who do not achieve a concrete outcome in the first 30 days churn at 3-5x the rate of those who do. Define your first success milestone and measure time-to-reach it.
Low feature adoption depth
CriticalUsers who only use one or two features churn at significantly higher rates. The more of your core product a user has integrated into their workflow, the harder it is to leave.
Poor onboarding experience
HighA user who gets stuck in the first session and never returns is a churned user within 30 days. Most churn decisions are made in the first two weeks.
Price vs. perceived value mismatch
HighUsers rarely cancel solely for price. They cancel when the price no longer feels worth it - which is a value problem, not a price problem.
Contract renewal friction
MediumContracts that auto-renew with no pre-renewal engagement give the customer a chance to ask "do I still need this?" at billing time. Pre-renewal surveys and success reviews prevent this.
Competitive displacement
MediumIf a competitor builds a feature your most common churn reason demands, you will see spikes in churn 3-6 months after the competitor launches. Monitor exit survey responses for product gaps.
How to Measure and Reduce Churn
Reducing churn is not about retention discounts. It is about finding the signal before a customer has already decided to leave.
01
Run a churn survey on every cancellation
Ask one question the moment a customer cancels: "What is the main reason you are leaving?" Categorise responses into product, price, support, lifecycle change, and competitor. After 50 responses you will have a pattern that tells you exactly where to invest in retention.
02
Run a pre-churn health survey 60 days before renewal
Customers who are about to churn rarely say so until it is too late. A survey 60-90 days before renewal asking about goal achievement and renewal intent surfaces at-risk accounts when you still have time to intervene.
03
Segment churn by cohort, not just overall rate
Calculate churn for each acquisition cohort, plan tier, and customer segment separately. A 15% overall churn rate might hide a 40% churn rate in one specific acquisition channel or customer segment that is dragging the average up.
04
Measure time-to-first-value, not just activation
Activation (completed setup) is a lagging indicator of retention. Time-to-first-value (days until the user achieved an outcome they cared about) is a leading indicator. Users who reach first value within 7 days churn at a fraction of the rate of those who take 30+ days.
05
Build a churn prediction model from survey + product signals
Combine survey data (health check scores, renewal intent) with product data (login frequency, feature adoption depth, support ticket volume). Users who score low on both dimensions are at immediate churn risk. Prioritise these accounts for CS outreach before they cancel.
Find out why customers are churning
Run churn surveys and retention health checks inside your product. Every response is linked to the account that gave it - so your CS team can act before the cancel request comes in.
Launch Churn Survey FreeFree plan · No credit card · Churn survey template included
Frequently Asked Questions
What is a good churn rate for SaaS?+
A good annual churn rate for B2B SaaS is below 5-7%. Enterprise-focused SaaS should target below 5% annually. SMB-focused SaaS typically sees 10-15% annually and considers below 8% good. Consumer SaaS churn runs much higher - 20-30% annually is common, with below 15% considered good. Monthly churn below 1% is excellent for any SaaS company.
What is the average churn rate for B2B SaaS?+
The average annual churn rate for B2B SaaS is 5-15%, depending on the customer segment. Enterprise B2B SaaS averages 5-8% annual churn. Mid-market B2B SaaS averages 8-12% annually. SMB-focused B2B SaaS sees 15-25% annual churn because smaller companies close, get acquired, or switch tools more frequently.
What is a good eCommerce churn rate?+
For subscription eCommerce, a good annual churn rate is below 20%. The industry average is 25-40% annually. Subscription boxes churn the fastest (8-12% monthly). SaaS-style eCommerce tools look more like SMB software at 1.5-3% monthly. For non-subscription eCommerce, measure repeat purchase rate instead - a 30-40% repeat rate within 12 months is considered good.
What is a good monthly churn rate for SaaS?+
A monthly churn rate below 1% is considered excellent for SaaS. 1-2% monthly is good for SMB-focused products. 2-5% monthly is average and warrants attention. Above 5% monthly is a serious problem - at 5% monthly churn you lose 46% of your customer base annually. Most healthy SaaS businesses target below 2% monthly as a minimum standard.
What is a good SaaS renewal rate?+
A good annual renewal rate for enterprise SaaS is 90-95% or above. Mid-market SaaS targets 85-90% renewal. SMB SaaS considers 75-85% renewal healthy. Net Revenue Retention (NRR) is a better metric than renewal rate alone - an NRR above 100% means expansion revenue from existing customers exceeds revenue lost to churn.
How is churn rate different from retention rate?+
Churn rate and retention rate are the inverse of each other. If your annual churn is 10%, your annual retention is 90%. If your monthly churn is 2%, your monthly retention is 98%. Both describe the same reality from opposite directions. Retention rate is often used in reporting because it sounds better - 90% retention vs. 10% churn - even though the numbers are identical.
Related resources
Survey
Churn Survey
Find out why customers cancel - with every response linked to the account.
Survey
Customer Retention Survey
Health checks and at-risk signals before customers decide to leave.
Survey
Customer Success Survey
Measure goal achievement and renewal intent by account tier.
Tool
Churn Rate Calculator
Calculate your monthly and annual churn rate with compounding math.