What is a good retention rate?

A good retention rate depends on the business model and the measurement window. Operator surveys collected by Lenny Rachitsky put good six-month user retention for consumer social products around 25 percent, good annual logo retention for SMB SaaS around 60 percent, and good annual logo retention for enterprise SaaS around 70 percent, with great roughly 20 points above each. There is no universal number, and anyone quoting one without a model and a window is quoting noise.

The benchmark table

Figures below are directional reference points from Lenny Rachitsky’s surveys of growth operators. They vary by category and era; their correct use is locating your weakest area, not setting targets.

Model	Metric and window	Good	Great
Consumer social	User retention, 6 months	~25%	~45%
Consumer transactional	User retention, 6 months	~30%	~50%
SMB SaaS	Logo retention, annual	~60%	~80%
Enterprise SaaS	Logo retention, annual	~70%	~90%
SMB SaaS	Net revenue retention, annual	~100%	110%+
Enterprise SaaS	Net revenue retention, annual	~110%	120%+

How to measure it so the number means something

Three rules keep retention data honest. Measure at the product’s natural frequency; a tax product measured weekly looks dead and is fine. Measure in cohorts, not blended averages, because blended retention mixes this month’s signups with three-year veterans and hides everything. And segment: by acquisition channel (paid cohorts routinely retain worse than organic), by persona, and by activation status, because the average of two different businesses describes neither.

Why a few points matter this much

Retention compounds against everything else. Two companies with identical acquisition and a few points of difference in monthly retention end up in different industries within three years; that is arithmetic, not rhetoric. The economics were quantified early: Frederick Reichheld and W. Earl Sasser’s research (Harvard Business Review, 1990) reported that a five percent improvement in customer retention raised profits 25 to 95 percent depending on the industry. It is why the discipline treats retention as the foundation every other metric multiplies against.

Frequently asked questions

What is a good monthly churn rate for SaaS?

Annual logo retention of 60 to 80 percent for SMB SaaS implies monthly logo churn in the rough band of 2 to 4 percent; enterprise products run materially lower. Convert your annual benchmark to monthly rather than borrowing a monthly number without its model.

Is high retention enough for growth?

It is the precondition, not the engine. Retention determines whether acquisition compounds or leaks; a company still needs an acquisition loop to compound. Strong retention with weak acquisition grows slowly; the reverse shrinks expensively.

What does a healthy retention curve look like?

It flattens. A cohort curve that levels at a stable plateau marks product-market fit with the segment the plateau represents. Declining toward zero marks its absence, and bending upward over time marks an unusually strong product.

Retention is where growth either compounds or dies, which is why it anchors the heaviest-weighted dimension in the audit at every early stage.