For software, annual churn above roughly 6 percent is the point where people start calling it high, and monthly churn benchmarks vary hugely by who you sell to. SMB churns far more than enterprise for reasons that have nothing to do with your product, since small customers go out of business. So compare yourself to your own segment, not to a headline number. Two things matter more than the benchmark: whether your churn is trending down, and how much of it is involuntary payment failure, which is often 20 to 40 percent of the total and is fixable without touching the product.
4 hand-picked resources, 4 link-checked. Pick how you want to dig in.
Why we picked it Gives per-industry churn thresholds so you can answer 'is my churn bad' with a number instead of a feeling. Software sits around 6 percent, which surprises a lot of first-time founders.
From Chargebee by Shaoli Paul 8 min read
Open chargebee.com →Why we picked it The benchmark study everyone quotes: good and great net revenue retention by business type, built from 20 growth experts plus real public company numbers. It stops the 'is 105 percent good' argument in one page.
From Lenny's Newsletter by Lenny Rachitsky 15 min read
Open lennysnewsletter.com →Why we picked it Involuntary churn is 20 to 40 percent of total churn for most subscription businesses and nobody owns it. This is the most concrete tactical list we found, organised by where in the payment lifecycle you intervene.
From Chargebee by Zaid Assadi 15 min read
Open chargebee.com →Why we picked it Unfashionable and effective: name an owner per customer, segment CS by customer size, do not close deals you cannot support, make it easy to leave well. Also the clearest statement of when churn starts capping growth.
From SaaStr by Jason Lemkin 8 min read
Open saastr.com →How expansion, upsell and churn reads from a different seat.
The same ground, over in Grow & market, our Starting Up track.
The same ground, over in Grow organically & retain, our D2C track.
