What is a good SaaS churn rate?

Good monthly SaaS churn is roughly 1% or lower for established companies; SMB tools run higher than enterprise. See benchmarks by segment and calculate your impact.

Churn is the rate at which customers (logo churn) or revenue (revenue churn) leave over a period. It is the single biggest lever on lifetime value — a few points of monthly churn can halve LTV.

Benchmarks by segment

SegmentTypical monthly churnAnnual
Enterprise SaaS~0.5–1%~5–10%
Mid-market~1–2%~10–20%
SMB / self-serve~3–5%+~30–50%+
Broadly, monthly revenue churn around 1% or below is considered good for an established B2B SaaS company. Early-stage and SMB products almost always churn faster.

Gross vs net revenue churn

Gross revenue churn only counts lost revenue. Net revenue churn subtracts expansion (upsells, seat growth) from churn — best-in-class companies achieve negative net churn, meaning existing customers grow faster than others leave. See our guide on net revenue retention.

Why churn matters so much

Average customer lifetime ≈ 1 ÷ monthly churn. At 5% monthly churn the average customer stays ~20 months; at 2% they stay ~50 months. That difference flows straight into LTV and how much you can afford to spend on acquisition.

How to reduce churn

  • Improve onboarding and time-to-value.
  • Identify at-risk accounts with usage signals.
  • Offer annual plans to reduce monthly cancel decisions.
  • Fix the top 3 reasons customers cite when they leave.

Quick LTV:CAC & payback check

$
%
%
$
LTV
LTV : CAC
CAC payback

Run the numbers on your own startup

Use the free SaaS Metrics calculator — no signup, instant results.

Open the SaaS Metrics Calculator
Advertisement

Frequently asked questions

What counts as a good monthly churn rate?

For established B2B SaaS, monthly revenue churn of roughly 1% or lower is considered healthy. SMB and self-serve products often run 3–5% or higher and are judged on different benchmarks.

How do I convert monthly churn to annual?

Annual churn = 1 − (1 − monthly churn)^12. It is not simply 12× monthly because retained customers compound. Our SaaS metrics calculator does this automatically.

What is negative churn?

Negative net revenue churn means expansion revenue from existing customers exceeds the revenue lost to churn, so your existing base grows even with no new customers.

Disclaimer: Benchmarks are general industry rules of thumb compiled from widely cited sources and vary by stage, segment and business model. This is educational information, not financial, investment or legal advice.

Related guides & tools