Startups live and die by their churn rate. It’s the clearest sign of whether your product is working, whether customers are staying, and if you’re growing the right way. But what exactly is a “good” churn rate? The answer depends on your stage, your market, and how you’re selling. Below, we’ll walk through 30 benchmark stats and explain each one in detail—so you know where you stand, and more importantly, what to do next.
1. The average monthly churn rate for SaaS startups is 4.91%
What this means for your startup
If you’re running a SaaS company, and you’re seeing a churn rate around 5% per month, you’re not alone. That’s the industry average for early-stage companies. It means that out of every 100 customers, you lose nearly 5 each month.
Now, that might not sound disastrous. But if you project that over a full year, it’s equivalent to losing more than half of your customers. That can make it almost impossible to grow unless your new customer acquisition is exceptionally strong.
Why the average is important
Knowing the average helps you set a baseline. If you’re above it, there’s urgent work to do. If you’re below it, great—but don’t relax. Churn has a habit of creeping back up unless you actively manage it.
What you should do next
- Break down your churn into cohorts: look at when users leave and why.
- Map churn by plan type, tenure, and user activity.
- Conduct exit surveys that ask one question: “What made you cancel today?”
This number—4.91%—is not where great SaaS companies stay. It’s where many start. You should aim to move down from here as quickly as possible.
2. A “good” annual churn rate for B2B SaaS is typically below 10%
Why B2B churn is different
B2B customers tend to be stickier. They take longer to onboard, sign longer contracts, and involve more decision-makers. That’s why the benchmark here is lower.
If you’re running a B2B SaaS and you’re churning more than 10% of your customers every year, it’s a red flag. Investors know this too. A startup with 20% annual churn will need to double its customer base every two years just to stay flat.
What “below 10%” really means
This stat doesn’t just reflect how good your product is. It tells you if you’re building a habit-forming tool that solves a real business problem. If you’re retaining customers year over year, you’re offering something vital to them.
Actionable moves to reduce churn
- Offer quarterly business reviews for high-value accounts.
- Provide account health dashboards to flag risk early.
- Train your support and customer success teams on identifying silent churners (those who stop using but don’t cancel immediately).
Hitting sub-10% annual churn isn’t easy, but once you do, growth gets a lot easier.
3. Top-performing SaaS companies have churn rates as low as 1%–2% monthly
How the best of the best operate
These are elite metrics. If you’re at 1–2% churn monthly, you’re keeping 98–99 out of every 100 customers. That builds long-term revenue compounding and makes every dollar spent on acquisition more valuable.
Top-performing startups often pair great products with obsessive customer success. They know that product-market fit isn’t a one-time event—it needs constant refinement.
Why this is rare
Hitting churn this low requires years of iteration, segmentation, and feedback loops. It also usually means you’ve matured past the early-stage flakiness and built something sticky.
How to follow in their footsteps
- Set a customer success playbook with steps triggered by user behavior.
- Assign CSMs (customer success managers) to high-value accounts early—even if you’re still small.
- Start every roadmap planning session with churn data.
You don’t have to be at 1–2% today, but the goal should be to drive there steadily quarter after quarter.
4. B2C startups often face churn rates above 7% monthly
Why B2C is tougher
Consumer startups live in a world of shorter attention spans and fewer switching costs. If you’re running a B2C SaaS, a 7%+ monthly churn isn’t unusual—it’s expected in many categories.
This doesn’t mean you can’t grow. But it means you need volume, virality, and pricing that accounts for high drop-off.
Where the churn comes from
B2C customers may cancel after one bad experience. They might forget they even signed up. There’s also more seasonal behavior, especially for lifestyle or fitness products.
What to do to control it
- Use push notifications and email nudges to bring back idle users.
- Consider retention incentives: discounts, upgrades, or reactivation rewards.
- Invest in user education flows (onboarding isn’t just for the first day).
If you’re B2C, think of churn reduction as an ongoing experiment, not a one-time fix.
5. The median churn rate for early-stage startups is 5.6% per month
The challenge at the beginning
When you’re just getting started, everything is more volatile. Product bugs, unclear value, weak onboarding—all of these hit hardest in the early stages. That’s why the median churn rate is relatively high.
But it’s also a gift. Every churned customer gives you feedback. Every exit is a lesson.
Why this is the time to fix things
Early churn is the best churn—because it tells you what’s broken. You’re still small, so you can reach out personally, change things fast, and learn.
Tactical steps to reduce it
- Personally call churned customers (they’ll be surprised and honest).
- Watch user sessions via tools like FullStory or Hotjar.
- Create onboarding milestones and track drop-off points.
Don’t beat yourself up if you’re at 5.6%. But don’t accept it either. Every percentage point saved now pays off double later.
6. Startups with <$1M ARR have churn rates closer to 12–20% annually
Why early-stage churn hits harder
If your startup is pulling in under $1M in annual recurring revenue, you’re still trying to prove repeatability. At this stage, you’re often refining product-market fit, reworking pricing, or dealing with inconsistent users. That’s why churn can be significantly higher—sometimes even closer to 20% annually.
These customers are testing the waters. If they don’t instantly see value, they’re gone. Worse, you might not even have a solid process to win them back yet.
How to handle it
This range doesn’t have to scare you. It simply reflects the learning curve every early startup goes through. Still, you must treat churn like a fire drill—because every customer counts when you’re small.
What to do next
- Segment customers by behavior, not just by plan.
- Focus on those who log in within the first 3 days after signup—this group is more likely to stay.
- Start tracking “activation moments”—those key actions that make users stick.
The goal here isn’t to eliminate churn entirely. It’s to build systems that reduce it while you grow to your first million.
7. B2B SaaS with enterprise customers typically target less than 5% annual churn
The stability of enterprise accounts
B2B SaaS companies serving enterprise customers usually see lower churn—sometimes dramatically so. These clients are slower to onboard but more committed once live. If you’re targeting this group, anything above 5% annual churn is a signal that something in the onboarding, support, or product execution is going wrong.
That said, churn in this segment can be lumpy. You might lose one large account and it skews your numbers. So don’t just measure in percentages—also look at gross churn in dollar value.
Keys to holding enterprise customers
Enterprise clients expect more than just a working product. They want dedicated support, clear SLAs, integration help, and fast answers.
Strategic ways to reduce enterprise churn
- Assign an account manager from day one.
- Host quarterly business reviews, even if informal.
- Build out custom dashboards or reports that reinforce ROI.
If you serve enterprise clients, low churn is possible—but only if you actively partner with them, not just sell to them.
8. The churn rate for mobile app-based startups averages 3–5% weekly
The pain of mobile churn
If you’re running a mobile-first startup, the math is brutal. Mobile app users are often impulsive. They download, poke around, then never return. That’s why mobile startups face weekly churn rates of 3–5%.
Think about it: losing 5% per week means you’re churning more than 20% of users per month. It’s not a bug. It’s the environment.
Why this happens
Mobile users try lots of apps. There’s no cost to switch, and they don’t feel a relationship with your brand the way a desktop SaaS customer might.
How to fight weekly churn
- Focus intensely on day-one engagement.
- Set up push notifications that trigger based on inactivity windows.
- Use onboarding checklists or “starter goals” that reward fast usage.
Don’t expect users to stick around just because they installed. You have to earn their loyalty every time they open the app.
9. Companies with <6 months runway experience churn over 7% monthly
The link between financial health and churn
If you’re a startup that’s low on cash—less than 6 months of runway—you’re probably seeing churn climb. The connection isn’t random. Financial pressure often leads to desperate acquisition pushes, rushed onboarding, or ignored support—all of which drive up churn.
You also might cut team members or stop investing in customer success, which only compounds the problem.
Churn as a warning sign
When churn rises alongside falling runway, it signals something deeper than user dissatisfaction. It could be a symptom of operational chaos.
What you can do even with limited runway
- Pause aggressive acquisition and double down on existing users.
- Ask every customer what would make your product un-cancelable.
- Focus on high-LTV segments—even if they’re small.
Churn is hard enough on its own. But when combined with financial strain, it becomes a death spiral unless you catch it fast.
10. Startups with strong onboarding reduce churn by up to 30%
The onboarding-churn connection
Great onboarding isn’t a nice-to-have. It’s the biggest driver of retention in the first 30 days. If your startup nails onboarding, you can cut churn by as much as 30%—sometimes more.
Users who understand how to get value early are more likely to build habits around your product. They’re also more likely to forgive the small issues along the way.
What strong onboarding looks like
It doesn’t have to be fancy. But it needs to:
- Get the user to value quickly.
- Be interactive, not just educational.
- Show proof that the product is working for them.
Easy tactics that drive onboarding wins
- Replace long tours with tooltips triggered by behavior.
- Send personalized onboarding emails based on what they did (or didn’t) do.
- Include real-life examples or templates that help them start fast.
If you’re seeing early drop-off, your first fix isn’t more features. It’s better onboarding.
11. Churn rates above 15% annually are considered red flags by VCs
Why investors watch churn like hawks
If your startup is churning more than 15% of customers each year, most investors will pause. To them, that number says two things: you’re not solving a painful enough problem, or customers aren’t getting lasting value. In both cases, your long-term revenue is at risk.
When VCs evaluate you, churn is more than just a metric. It tells them whether the money they pour in will compound—or leak.
Why this benchmark matters
At 15% annual churn, your startup loses nearly one out of every seven customers each year. That creates a constant uphill climb. You need to acquire faster, sell harder, and spend more—just to maintain the same baseline.
What to fix before pitching investors
- Track and categorize churn reasons—group them into themes like “pricing,” “product gaps,” or “lack of support.”
- Create a churn dashboard in your pitch deck, and show how you’re addressing each issue.
- Don’t hide churn—own it, and outline what you’re doing about it.
Investors don’t expect perfection. But they want to see that you know your weak spots and have a plan to improve them.
12. Freemium models average churn rates of 10%–15% monthly
The double-edged sword of freemium
Freemium can be powerful for acquisition—but brutal for retention. When users pay nothing, they also commit nothing. That’s why monthly churn can soar to 10%–15% or even higher in freemium models.
Many startups mistake free signups for traction. But what you really want is activation and retention. Otherwise, you’re burning server costs on users who will never return.
Why freemium churn is high
- No friction to leave.
- Users often “try and forget.”
- No investment means no urgency.
What to do if you run a freemium model
- Add “aha moments” fast: show value in 60 seconds or less.
- Cap free tiers by usage, not time—so value triggers the upgrade.
- Use lifecycle emails to reactivate dormant users quickly.
Freemium only works if the free users convert or refer others. If they just leave, you’re carrying dead weight.
13. Startups with NPS scores above 50 typically have under 3% churn
The power of Net Promoter Score
NPS—Net Promoter Score—isn’t just a vanity metric. It’s tightly linked to churn. When your NPS is 50 or higher, it means users would actually recommend your product to others. That level of satisfaction usually leads to much lower churn, often under 3% monthly.
Why this correlation matters
Happy users stay. They don’t just keep paying—they forgive bugs, advocate for your brand, and resist switching. NPS is an early warning system for loyalty.
How to use NPS to reduce churn
- Survey users 30 days after signup and every 6 months after.
- Segment by promoter, passive, and detractor—and follow up with each differently.
- Track NPS alongside churn by cohort to uncover retention risks.
Startups with high NPS don’t just survive longer—they grow more easily. Build delight into the product and watch churn drop.
14. The average churn rate in MarTech SaaS is 5.5% monthly
Why marketing software churns faster
MarTech—marketing technology—is a crowded space. Customers are constantly testing tools, switching platforms, or consolidating software. That’s why SaaS companies in this category often face monthly churn around 5.5%.
Many marketers also run experiments with tools, use them for a campaign, then cancel. You’re not just competing with other tools—you’re fighting internal budget reshuffles too.
How to win in this vertical
- Build features that tie your product into workflows—so you become harder to replace.
- Focus onboarding on speed-to-value (marketers are impatient).
- Create integrations with platforms your users already love (like HubSpot, Mailchimp, or Google Ads).
Churn in MarTech isn’t always your fault. But unless you embed deeply in their stack, you’ll get cut at the first budget review.
15. Churn for high-ticket SaaS (>$1000 MRR) averages 1–2% monthly
Why premium pricing leads to lower churn
If you sell high-ticket SaaS—products with monthly contracts over $1,000—you usually see better retention. These customers are more invested. They took time to evaluate the purchase, got internal buy-in, and likely went through a custom onboarding process.
That leads to churn rates around 1–2% monthly—a strong benchmark for startups in the enterprise or mid-market space.
What this tells us
Churn isn’t just about product—it’s about commitment. The more involved the buyer, the more likely they are to stick.
How to keep high-value clients happy
- Offer white-glove support or onboarding.
- Include quarterly reviews to show value and reinforce results.
- Proactively flag risks through account health scores.
Every high-ticket customer you retain saves you from spending thousands on acquisition. Make them feel like partners, not buyers.
16. Usage-based pricing startups see 35% lower churn than fixed plans
Why pricing strategy shapes retention
Usage-based pricing aligns cost with value. The more someone uses your product, the more they pay—but also, the more they benefit. That dynamic creates a natural incentive to stay. Startups using this model often see churn rates 35% lower than those with fixed pricing.
It’s not about nickel-and-diming the user. It’s about growing with them, and letting pricing reflect usage, success, or scale.
What this tells us
Fixed plans can create a mismatch. A customer might feel overcharged if they don’t use the product heavily that month. With usage-based pricing, they feel in control—and that drives longer relationships.
How to test usage-based pricing
- Identify your core value metric: emails sent, API calls, storage used, etc.
- Start with a hybrid model: base fee + variable usage.
- Monitor usage trends closely to prevent surprise bills.
Usage-based pricing isn’t for everyone. But when done well, it turns churn into expansion.
17. B2C subscription boxes have annual churn exceeding 60%
The churn reality for physical products
Subscription boxes—especially B2C ones like beauty kits, snacks, or grooming sets—often lose over 60% of subscribers annually. That means more than half your customers vanish each year, even if the product is solid.
Why? Because most of these boxes solve wants, not needs. And consumer excitement fades fast.
What makes churn this high
- Gifting cycles end.
- Customers cancel after promotions.
- The novelty wears off after a few months.
How to fight back
- Offer more personalization to increase perceived value.
- Build seasonal surprise elements that feel fresh each cycle.
- Create flexible skip/pause options rather than making cancel the only escape.
If you’re running a physical box business, plan for this churn in your model. Retention helps—but aggressive acquisition is still your lifeline.
18. Product-led growth companies often see churn around 2–3% monthly
What product-led growth (PLG) means for churn
In PLG startups, the product drives acquisition, activation, and expansion. There’s less sales involvement, and users adopt bottom-up. When it works, it’s powerful—and it tends to lead to lower churn, often in the 2–3% monthly range.
That’s because users don’t just buy—they use. And using means staying.
Why PLG supports better retention
When users find your product, try it, and instantly get value without handholding, they build trust. That trust lowers the chance of sudden drop-offs.
How to go product-led
- Remove friction: no demo calls, no gated trials.
- Guide users through an intuitive onboarding experience.
- Use in-app nudges and tooltips based on behavior.
The less you rely on a sales rep and the more you invest in self-serve product journeys, the stronger your churn defense becomes.
19. Churn is highest in the first 90 days—up to 60% of lifetime churn happens here
The danger zone: the first three months
The majority of your churn happens early. In fact, up to 60% of all customer losses occur within the first 90 days. That window is when users form habits—or decide the product isn’t worth it.
If you ignore early churn, you’re wasting your acquisition spend. It’s like pouring water into a bucket with holes at the bottom.
Why this period matters
- Expectations haven’t been met.
- Users hit friction and don’t know how to proceed.
- Value hasn’t been made obvious.
Fixing the first 90 days
- Build welcome sequences tied to user actions, not just time.
- Use check-ins at day 7, 21, and 60 to reinforce progress.
- Offer optional concierge onboarding to make setup feel effortless.
The goal: make users feel like they’re improving their life or work—within the first week.
20. Companies offering annual plans have 30–50% lower churn than monthly plans
The retention power of commitment
When customers pay for a year upfront, they’re signaling serious intent. That’s why annual plans reduce churn by 30–50% compared to monthly ones.
It’s not just about locking people in. It’s about creating a mindset shift. Yearly customers tend to give your product more time, more patience, and more engagement.
What this means for your pricing strategy
Monthly plans feel low-risk. But they also make it easier to cancel after a bad week. Annual plans reduce that knee-jerk reaction. They also stabilize your revenue and improve cash flow.
How to drive annual upgrades
- Offer clear savings (e.g. 20% off yearly).
- Promote annual billing right after onboarding success.
- Highlight testimonials from long-term users.
If you’re worried about churn, shifting more users to annual plans is one of the fastest, most reliable fixes you can make.
21. Startups with live customer support reduce churn by 22%
Why real-time help drives retention
Startups that offer live chat or instant support channels often see churn drop by 22% or more. That’s because customers don’t want to wait. When they get stuck or confused, they want answers right away—not an email thread that stretches for days.
Live support isn’t just about solving tickets—it’s about saving relationships.
Why it works
Live support gives users confidence that they’re not alone. When someone knows they can reach a human and get help in under five minutes, they’re more likely to stay through friction.
It also stops silent churn—those users who get frustrated and quit without ever telling you why.
How to add live support without burning out
- Start with business-hours chat via tools like Intercom or Crisp.
- Use bots to handle basic questions and route urgent issues to a human.
- Document every issue to improve onboarding and UX over time.
You don’t need a huge team. Even one responsive support person can cut churn significantly.
23. Startups that offer personalized onboarding see up to 50% less churn
Why “one-size-fits-all” onboarding fails
Personalized onboarding—where the experience adapts to the user’s goals, role, or use case—can cut churn by up to 50%. That’s a huge improvement, and it works across industries.
Why? Because users don’t care about all your features. They care about the one outcome they signed up for.
What personalized onboarding looks like
- Ask about goals or roles during signup.
- Tailor the interface to surface relevant features first.
- Use in-app guides that adapt based on the user’s journey.
How to implement this without code
- Use no-code tools like Appcues, Userflow, or Chameleon.
- Create segmented welcome emails for different customer types.
- Track what users click early on—and personalize follow-ups accordingly.
When you guide each user based on what they care about, you help them succeed faster. And customers who succeed don’t churn.
24. A churn rate below 3% monthly is often considered healthy across industries
The magic number for stability
While benchmarks vary, a monthly churn below 3% is broadly seen as healthy for SaaS and subscription startups. That means you’re keeping 97 out of every 100 customers each month—enough to build reliable compounding growth.
It’s not elite performance, but it’s solid. If you’re hitting this mark, you’ve likely nailed the basics: your onboarding works, your support team is responsive, and your product delivers ongoing value.
What a healthy churn rate enables
- Lower pressure on acquisition.
- Better LTV:CAC ratio.
- Easier forecasting and investor confidence.
How to stay under 3%
- Regularly refresh your activation funnel and fix points of friction.
- Check-in with dormant accounts before they churn.
- Launch retention campaigns that reward long-time users.
3% isn’t a ceiling—it’s a milestone. Once you hit it, aim to go lower. But if you’re above it, make reducing churn your top priority before scaling acquisition.
25. Mobile gaming startups experience churn of 15–20% in the first week
The harsh reality of gaming churn
In mobile gaming, attention spans are short and competition is everywhere. That’s why it’s common for startups in this space to lose 15–20% of their users in just the first 7 days.
That doesn’t mean your game is bad. It means the bar for engagement is incredibly high—and rising.
Why early churn is so severe
- Users try multiple games at once.
- If the first session doesn’t hook them, they move on.
- Games that feel “too hard” or “too easy” are abandoned quickly.
How to improve first-week retention
- Start with a simple, rewarding tutorial that gets to gameplay fast.
- Reward users early—daily bonuses, level-ups, or unlocks.
- Use push notifications sparingly to re-engage drop-offs with value, not just noise.
In mobile gaming, the first five minutes decide your churn rate. Focus there before adding more levels, features, or monetization layers.
26. Startups with <3 customer success reps per 1000 users have 15% higher churn
The role of customer success in retention
If you’re serving more than 1,000 users and you have fewer than three customer success reps, your churn risk rises. In fact, startups in this situation often see 15% more churn compared to those with stronger customer support coverage.
It’s not about staffing big teams—it’s about covering needs. Without enough human touchpoints, even a great product can lose customers to frustration or neglect.
Why this ratio matters
- Customers need follow-ups after onboarding.
- Renewals require proactive engagement.
- High-value users often expect relationship-building, not just reactive help.
How to solve this without breaking the bank
- Automate playbooks for low-touch users with lifecycle emails and help center flows.
- Create office hours or webinars to support a broader user base efficiently.
- Hire part-time or fractional customer success help to bridge the gap.
As your user base grows, scale your support in lockstep. The cost of churn is higher than the cost of a success hire.
27. Annual churn above 20% can stall startup growth completely
Why high churn cancels out progress
When your annual churn exceeds 20%, your startup enters dangerous territory. Even if you’re signing new customers every week, the growth will flatten—or worse, reverse.
It’s not just a growth issue. It’s a signal to investors, employees, and your market that something foundational isn’t working. Either the value isn’t clear, or the execution is falling short.
What this looks like in practice
Imagine adding 100 new customers each year. If you’re losing 20 or more, that’s a 1-in-5 leak rate. And each one takes revenue, referrals, and credibility with them.
How to course-correct
- Audit your churned customers—call at least 10 personally.
- Flag risky behaviors (inactivity, missed onboarding steps) and set alerts.
- Focus your roadmap on features that increase retention, not just acquisition.
You can’t outgrow churn forever. Fixing it early makes every future dollar more powerful.
28. Freemium-to-paid conversion rates above 5% tend to correlate with lower churn
Why conversion rate reveals product strength
If you offer a freemium product and more than 5% of users upgrade to paid, chances are you’re doing something right. Not only are you converting at a healthy rate—you’re likely seeing lower churn among those paid users too.
Why? Because they’ve gone through a real decision-making process. They’ve experienced value and chosen to invest.
Why this matters
Freemium models often get flooded with unqualified users. But when your free tier is thoughtfully designed to lead into your core value, you attract and convert the right people.
How to drive higher conversion (and lower churn)
- Make the premium value obvious—don’t hide it.
- Use in-app upgrade prompts based on feature usage.
- Offer a “trial of premium” instead of just staying in free mode forever.
A 5%+ upgrade rate is a great indicator that your freemium funnel is healthy—and that your churn is likely headed in the right direction.
29. Average churn for edtech startups is around 4.2% monthly
Why education tools face unique churn challenges
Edtech startups see average monthly churn around 4.2%. That’s moderate, but higher than enterprise SaaS. It reflects a few common issues in the education space:
- Usage is tied to school cycles or semesters.
- Many users are students who churn after exams or graduation.
- If engagement drops, there’s little reason to stay subscribed.
What to do about it
- Design your product around recurring, long-term learning—not just cramming.
- Offer rolling content or certifications that keep users engaged post-course.
- Target institutional sales (schools, bootcamps) to stabilize revenue.
Edtech success depends on creating a sense of long-term journey, not short-term utility. The more progress users feel, the more likely they are to stay.
30. Startups that conduct churn exit interviews reduce churn by 12–15% on average
Why listening is your best retention tool
When users leave, most startups just let them go. But those that actively run exit interviews—calls or surveys asking why a user churned—often reduce future churn by 12–15%.
Why? Because the feedback is direct, raw, and actionable. You get clarity you can’t find in dashboards or usage data alone.
How to do exit interviews right
- Keep it short. Ask: “What made you cancel today?” and “What would’ve made you stay?”
- Offer an incentive like a gift card or discount to participate.
- Don’t defend—just listen and document.
Then, act. Fix the real issues, close the gaps, and update your roadmap accordingly.
The best retention strategies don’t guess. They ask.
Conclusion
Churn is not just a number. It’s a signal. A reflection of how well your product fits into someone’s life or workflow. A guide to what needs fixing. And sometimes, a mirror to the parts of your company you’re avoiding.
