Average SaaS churn rate: benchmarks by segment
What churn rate is normal, what's good, and how the answer changes with deal size — customer and revenue churn benchmarks for SaaS.
Monthly logo churn by ACV segment
What is the average churn rate for SaaS?
For customer (logo) churn, the commonly cited averages run 3–7% monthly for SMB-focused products and under 1–2% monthly for mid-market and enterprise. On the revenue side, gross revenue churn of 2–4% a month is typical for SMB and well under 1% for enterprise. Annualised, healthy SaaS businesses cluster around 5–10% yearly revenue churn; SMB products routinely live with 30–50% yearly logo churn and survive on volume and expansion.
Treat every published average with suspicion, including these: churn benchmarks blend companies that define churn differently, and the spread within any segment dwarfs the difference between segments' averages. The benchmark's real use is orientation — telling you whether you are roughly in range or clearly leaking.
What is a good churn rate?
Good is defined by your deal size and motion, not by a universal number. Selling $50-a-month self-serve subscriptions, 5% monthly logo churn can be a working business — customers are cheap to replace and expansion covers the gap. Selling $50k annual contracts, 5% monthly churn is an extinction event. The rule of thumb: the bigger the contract, the closer to zero churn must be, because replacement cost scales with ACV.
Always compound before judging: 5% monthly churn is not 'about 5%' — it is 0.95¹² ≈ 46% of customers gone in a year. Monthly numbers anesthetize; annual numbers tell the truth. And watch the logo-versus-dollar gap: losing 5% of customers but only 2% of revenue means you shed small accounts — arguably healthy; the reverse means your biggest customers are the ones leaving.
What monthly churn compounds to in a year
How to compare your churn honestly?
Fix your definitions before comparing anything: whether downgrades count (revenue churn: yes; logo churn: no), whether the denominator is start-of-period customers only, and whether pauses and failed payments count as churn or as their own state. A definition change can move reported churn by half — which is how two companies with identical retention report very different numbers.
Then compare like with like: your ACV band, your billing period (annual contracts mechanically suppress monthly churn), your customer age mix — young cohorts churn several times faster than tenured ones, so a fast-growing company's blended churn always looks worse than its steady-state. The most honest comparison is you against you: cohort curves quarter over quarter, not your blended rate against a stranger's average.