Lenny’s Newsletter · Subscriber post · Growth & retention · Metrics, data & experimentation

What is good monthly churn

Benchmarks for good and great monthly churn, broken down by segment and price point

Lenny RachitskyFeb 8, 202210 min♥ 86
SourceLenny’s Newsletter
KindSubscriber post
PublishedFeb 8, 2022
Readers♥ 86
Originallennysnewsletter.com ↗
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Lenny Rachitsky benchmarks what counts as good and great monthly SaaS churn, drawing on growth leaders and ProfitWell data across B2C, SMB/mid-market, and enterprise segments. He argues churn should be read by price point, component type, and cohort, and that acceptable levels vary when acquisition costs or company ambitions differ. He also adds benchmarks for cohort and net revenue retention.

Subscriber post — summary only

01Key takeaways

  • Monthly churn benchmarks differ sharply by segment: B2C is roughly 3-5% good and under 2% great, while enterprise B2B is 1-2% good and under 0.5% great.
  • Higher price points should target lower churn, since expensive customers carry greater acquisition costs and larger-business stability.
  • Early-tenure churn often reflects onboarding or activation failures, and paid acquisition can bring in the wrong customers.
  • Split churn into intentional versus involuntary, and soft versus hard, since payment failures and zombie subscriptions hide real losses.
  • Higher churn can be acceptable with very cheap acquisition or when building a non-venture-scale business, so benchmarks should guide priorities rather than dictate them.

02Frameworks mentioned

Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.