What is good retention?

Lenny Rachitsky and Casey Winters surveyed 20 experienced growth practitioners to define what good and great retention looks like across business types. They asked for benchmarks on user retention at six months and net revenue retention at twelve months. The resulting ranges vary by model, such as consumer social, transactional, consumer SaaS, and SMB, mid-market, or enterprise SaaS. The authors pair these expert views with public company data to ground the numbers. They also argue that low retention can be acceptable in some situations, such as low acquisition costs or non-venture-scale goals. The piece matters because retention is widely seen as the key signal of product-market fit and long-term business health, yet it is often poorly understood and benchmarked.

01Key takeaways

• Treat retention as the clearest signal of whether a business will thrive, and measure it per cohort.
• Benchmark user retention against your business model, since consumer social, transactional, and enterprise SaaS differ widely.
• Use net revenue retention for subscription businesses, because expansion revenue can make up for user churn.
• Balance retention against customer acquisition cost and unit economics; cheap acquisition can tolerate lower retention.
• Expect early-stage startups to struggle to move retention much, so use benchmarks to decide between investing in retention or acquisition.
• Aim for a flat retention curve that supports a scalable acquisition strategy, rather than chasing top-tier numbers alone.

02Key sections

Why retention matters

The post opens with expert views that retention is the scalable growth engine and the strongest signal of product-market fit. It frames retention as the most important but least understood metric for builders and investors.

Defining good and great user retention

Benchmarks are given for consumer social, consumer transactional, consumer SaaS, SMB/mid-market SaaS, and enterprise SaaS, measured as the share of users still active at six months. Each category includes expert ranges and public company comparisons.

Defining good and great net revenue retention

Net revenue retention compares a cohort's current recurring revenue to its revenue a year earlier. Benchmarks differ by go-to-market motion, including bottom-up SaaS and land-and-expand models, because expansion revenue can offset user churn.

When low retention can be acceptable

The authors note that early-stage startups, businesses with cheap acquisition, and non-venture-scale companies can survive with lower retention. The key is that retention supports sustained growth.

03From the post

“Hello, and welcome to the free monthly editionof my weekly newsletter. I’m Lenny, and each week I tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out at the office. Q: What do you consider GOOD and GREAT retention? “Great retention is the scalable way to grow a product. It’s the best indicator of product-market fit, it is the most important factor in a user’s lifetime value, and high retention drives all of the best acquisition strategies. It’s growth’s equivalent of the triple word score.” —Casey Winters Although retention is widely considered to be the most important metric to get right when building (and investing in) a business, it’s also one of the least understood. Why? Because unless you’re a growth expert or an experienced investor, you’re often relying on anecdotes, dated blog posts, and misguided benchmarks. I ran into this problem myself many times when working with startups. So when Casey Winters (former head of growth at Pinterest and Grubhub, and now CPO at Eventbrite) brought up this question in a conversation we…”

04Frameworks mentioned

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