Cohort Retention Benchmarks 2025: Industry ...

Knowing whether your retention is "good" requires context—and that context comes from industry benchmarks. A 90% annual retention rate might be excellent for a consumer subscription app but concerning for enterprise B2B SaaS. Benchmarks from sources like OpenView, SaaS Capital, KeyBanc, and ProfitWell reveal that retention varies dramatically by industry vertical, customer segment, pricing model, and company stage. B2B SaaS companies targeting enterprises typically achieve 90-95% gross retention and 110-130% net retention, while consumer subscriptions see 60-80% annual retention depending on category. Vertical SaaS often outperforms horizontal solutions by 5-10 percentage points due to higher switching costs and deeper workflow integration. Understanding these benchmarks enables you to set realistic targets, identify where you're underperforming, and contextualize your metrics for investors and boards who evaluate you against peers. This comprehensive guide provides current retention benchmarks across industries, segments, and company stages, along with frameworks for appropriate benchmark comparison and strategies for improving retention toward best-in-class standards. Whether you're evaluating your current performance or setting targets for the coming year, these benchmarks provide the context needed for informed decision-making.

Understanding Retention Metrics for Benchmarking

Before comparing to benchmarks, ensure you're measuring retention the same way benchmark sources do—methodology differences can create misleading comparisons.

Gross Revenue Retention (GRR)

Gross revenue retention measures the percentage of revenue retained from existing customers, excluding any expansion. It can only decline or stay flat—never exceed 100%. Calculation: (Starting MRR − Churned MRR − Contracted MRR) / Starting MRR. Example: $100K starting MRR, $5K churned, $3K contracted = ($100K - $5K - $3K) / $100K = 92% GRR. GRR reveals your baseline retention problem without the masking effect of expansion. A company with 85% GRR must replace 15% of revenue annually just to stay flat before any growth. Most benchmarks report annual GRR. Monthly GRR compounds—95% monthly GRR becomes ~54% annual GRR (0.95^12), which is why annual comparisons matter.

Net Revenue Retention (NRR)

Net revenue retention includes expansion revenue from upsells, cross-sells, and price increases, allowing it to exceed 100%. Calculation: (Starting MRR − Churned − Contracted + Expanded) / Starting MRR. Example: $100K starting MRR, $5K churned, $3K contracted, $15K expanded = ($100K - $5K - $3K + $15K) / $100K = 107% NRR. NRR above 100% indicates that existing customers generate more revenue over time than they started with—the holy grail of SaaS economics. Many top-performing companies achieve 110-130%+ NRR, meaning they can grow revenue significantly even without new customer acquisition. Benchmark sources typically report annual NRR.

Logo (Customer) Retention

Logo retention measures what percentage of customer accounts remain active, treating each customer equally regardless of revenue contribution. Calculation: (Starting customers − Churned customers) / Starting customers. Example: 1,000 starting customers, 100 churned = 900/1,000 = 90% logo retention. Logo retention often differs significantly from revenue retention. A company might have 95% revenue retention but only 80% logo retention if it loses many small customers while retaining large ones. This difference reveals concentration risk—if most revenue comes from few customers, losing those customers creates existential risk. Benchmarks typically report annual logo retention.

Benchmark Methodology Considerations

When comparing to benchmarks, verify methodology alignment. Common differences: Time horizon: Annual vs. monthly (don't compare monthly to annual benchmarks). Cohort definition: Calendar-based vs. tenure-based (12-month retention from signup vs. calendar year). Inclusion criteria: Some benchmarks exclude first-month churn, others include it. Calculation basis: Revenue-weighted vs. logo-weighted. Expansion definition: Some include price increases, others exclude. Request methodology details from benchmark sources when available. When in doubt, calculate your metrics multiple ways and compare to the closest methodology. A 5-10% difference might come from methodology rather than actual performance.

Methodology Match

Before concluding your retention is above or below benchmark, verify you're using the same calculation method. A 10% apparent gap might be a 2% real gap after methodology alignment.

B2B SaaS Retention Benchmarks

B2B SaaS shows the strongest retention among software categories, with significant variation by customer segment and company stage.

Enterprise B2B SaaS (ACV >$100K)

Enterprise SaaS targeting large companies with high-touch sales shows the strongest retention metrics. Gross Revenue Retention benchmarks: Bottom quartile: <85%. Median: 90%. Top quartile: >95%. Best-in-class: 97%+. Net Revenue Retention benchmarks: Bottom quartile: <100%. Median: 110%. Top quartile: >120%. Best-in-class: 130%+. Logo Retention benchmarks: Median: 90-95%. Best-in-class: 97%+. Enterprise retention benefits from: Long contract terms (often annual or multi-year), high switching costs, dedicated customer success, and deep integration into customer workflows. Enterprise customers represent significant revenue, justifying high-touch retention efforts.

Mid-Market B2B SaaS (ACV $10K-$100K)

Mid-market SaaS shows strong but slightly lower retention than enterprise due to less stickiness and smaller dedicated success investment. Gross Revenue Retention benchmarks: Bottom quartile: <80%. Median: 87%. Top quartile: >92%. Best-in-class: 95%+. Net Revenue Retention benchmarks: Bottom quartile: <95%. Median: 105%. Top quartile: >115%. Best-in-class: 125%+. Logo Retention benchmarks: Median: 85-90%. Best-in-class: 93%+. Mid-market companies often balance high-touch and low-touch approaches. They're large enough to justify some dedicated attention but not the full enterprise treatment. Retention strategies must be efficient—tech-touch and scaled CS programs matter here.

SMB B2B SaaS (ACV <$10K)

SMB-focused SaaS shows lower retention due to higher customer turnover, less stickiness, and economically limited ability to provide high-touch service. Gross Revenue Retention benchmarks: Bottom quartile: <75%. Median: 82%. Top quartile: >88%. Best-in-class: 92%+. Net Revenue Retention benchmarks: Bottom quartile: <90%. Median: 100%. Top quartile: >108%. Best-in-class: 115%+. Logo Retention benchmarks: Median: 75-82%. Best-in-class: 88%+. SMB retention requires different strategies: product-led retention through sticky features, automated onboarding and success, community building, and efficient intervention for at-risk accounts. High churn is offset by efficient acquisition in successful SMB models.

B2B SaaS by Company Stage

Retention varies significantly by company maturity. Early-stage (Seed/Series A): GRR median 80%, NRR median 95%. Early companies are still finding product-market fit, and retention suffers from product gaps and targeting issues. Acceptable to be below benchmarks while learning. Growth-stage (Series B/C): GRR median 88%, NRR median 108%. Growth companies should approach benchmark standards. Significant gap indicates problems that will limit scaling. Late-stage (Series D+/Public): GRR median 92%, NRR median 115%. Mature companies should meet or exceed benchmarks. Underperformance signals structural issues requiring attention. Stage-appropriate expectations matter—don't compare early-stage metrics to mature company benchmarks. Investors understand retention improves with maturity when product and processes strengthen.

B2B Target

For venture-scale B2B SaaS, target GRR >90% and NRR >110%. Below these thresholds, the business struggles to achieve efficient growth. Above them, the business becomes highly capital-efficient.

B2C and Consumer Subscription Benchmarks

Consumer subscriptions show dramatically different retention patterns than B2B, with higher churn rates considered normal and acceptable.

Consumer Subscription Apps

Consumer subscription apps (fitness, meditation, productivity, entertainment) face high churn rates due to discretionary nature and low switching costs. Annual Retention benchmarks: Bottom quartile: <50%. Median: 60-70%. Top quartile: >75%. Best-in-class: 85%+. Monthly Churn benchmarks: Average: 6-10% monthly (50-70% annual retention). Best-in-class: 3-5% monthly (70-85% annual retention). Consumer subscriptions succeed through: High acquisition efficiency (CAC must accommodate high churn), habit formation features, community and social elements, and continuous content/feature releases that maintain engagement. Annual billing significantly improves retention—monthly subscribers churn at 2-3x annual subscriber rates.

Streaming and Media Subscriptions

Streaming services show retention heavily influenced by content library and exclusive releases. Annual Retention benchmarks: Median: 65-75%. Best-in-class (Netflix, Spotify): 80-85%+. Annual churn rates: Typical range: 25-35% annually. Major services: 15-25% annually. Streaming retention strategies include: Exclusive content that can't be accessed elsewhere, algorithm-driven personalization, family plans that increase stickiness, and bundling (Disney+/Hulu/ESPN). Content release timing significantly impacts retention—services with regular exclusive releases retain better than those with static libraries.

Gaming Subscriptions

Gaming subscriptions (Xbox Game Pass, PlayStation Plus, subscription-based games) show moderate retention with high engagement variance. Annual Retention benchmarks: Console subscriptions: 70-80%. PC gaming subscriptions: 60-70%. Mobile gaming subscriptions: 50-65%. Gaming retention depends heavily on: Game release cadence and quality, social features (playing with friends), platform lock-in (achievements, saves, friends lists), and promotional pricing strategies. Free-to-play with in-app purchases shows different patterns than subscription models—engagement and retention mechanics differ fundamentally.

Consumer Health and Fitness

Health and fitness apps face particularly challenging retention due to motivation decay and competitive alternatives. Annual Retention benchmarks: Fitness apps (Peloton, Strava): 65-75%. Meditation apps (Calm, Headspace): 55-65%. Diet/nutrition apps: 50-60%. Consumer health retention strategies: Habit formation through streaks and gamification, social accountability (community, friends, challenges), hardware integration that increases switching costs (Peloton bike, Apple Watch), and outcome tracking that demonstrates value. January cohorts typically show 10-20% lower retention than other months due to New Year's resolution effect—people who sign up with aspirational intent but without sustained commitment.

B2C Reality

Consumer subscription churn rates that would be disastrous in B2B SaaS are normal in B2C. The business model works when acquisition efficiency is high enough to sustain the replacement rate.

Vertical SaaS Benchmarks

Vertical SaaS serving specific industries typically outperforms horizontal SaaS due to deeper integration, higher switching costs, and less competition.

Healthcare SaaS

Healthcare SaaS (EHR, practice management, patient engagement) benefits from regulatory requirements and high switching costs. Gross Revenue Retention benchmarks: Median: 92-95%. Best-in-class: 97%+. Net Revenue Retention benchmarks: Median: 108-115%. Best-in-class: 125%+. Healthcare retention advantages: HIPAA compliance requirements create switching costs. Integration with billing, scheduling, and clinical workflows creates deep dependency. Regulatory change creates expansion opportunities. Limited competition in specific verticals. Healthcare retention challenges include: Long implementation cycles, budget constraints in healthcare settings, and M&A among provider organizations causing consolidation.

Financial Services SaaS

Financial services SaaS (banking software, investment platforms, insurance tech) shows strong retention from regulatory requirements and operational criticality. Gross Revenue Retention benchmarks: Median: 93-96%. Best-in-class: 98%+. Net Revenue Retention benchmarks: Median: 110-118%. Best-in-class: 130%+. Financial services retention advantages: Regulatory compliance requirements (SOC 2, SEC, FINRA) create high switching barriers. Integration with trading systems, custodians, and reporting creates dependency. Financial services firms are conservative about vendor changes. Premium pricing supports strong customer success investment.

Real Estate and Property Tech

Property tech (property management, real estate CRM, mortgage tech) shows strong retention from operational integration. Gross Revenue Retention benchmarks: Median: 88-92%. Best-in-class: 95%+. Net Revenue Retention benchmarks: Median: 105-112%. Best-in-class: 120%+. Property tech retention advantages: Property management systems become deeply integrated into operations. Switching disrupts tenant communications, payment processing, and accounting. Portfolio growth creates natural expansion opportunities. Property tech retention challenges include: Real estate market cycles affecting customer health and budget constraints in property management with thin margins.

Legal and Professional Services SaaS

Legal tech and professional services software shows strong retention from workflow integration and conservative switching behavior. Gross Revenue Retention benchmarks: Median: 90-94%. Best-in-class: 96%+. Net Revenue Retention benchmarks: Median: 106-113%. Best-in-class: 122%+. Legal/professional services retention advantages: Practice management systems contain critical client data and workflows. Firms are risk-averse about technology changes. Regulatory requirements (client confidentiality, records retention) create compliance dependencies. Firm growth drives seat-based expansion.

Vertical Advantage

Vertical SaaS typically retains 5-10 percentage points better than horizontal alternatives serving the same customer segment. The specialization creates switching costs that horizontal products can't match.

Retention by Pricing Model

Pricing model significantly impacts retention patterns, with some models naturally producing higher retention than others.

Seat-Based Pricing

Seat-based pricing shows moderate retention with strong expansion potential. Gross Revenue Retention: Median 85-90%. Vulnerable to seat reduction during layoffs or budget cuts. Net Revenue Retention: Median 105-115%. Seat expansion as customers grow creates strong NRR. Logo Retention: Median 85-90%. Seat-based retention strategies: Encourage broad team adoption to create stickiness. Monitor active seat usage to identify at-risk accounts (paying for unused seats). Design features that encourage cross-team collaboration. Seat reduction warning: Track seats actively used vs. seats paid for—large gaps predict future contraction.

Usage-Based Pricing

Usage-based pricing shows variable retention that correlates with customer success—usage grows when customers find value. Gross Revenue Retention: Highly variable, 75-95% depending on usage patterns. Usage decline directly reduces revenue before explicit churn. Net Revenue Retention: Often very high (115-140%) when customers scale usage. Can be negative if usage declines across the base. Logo Retention: Often higher than revenue retention—customers stay but may use less. Usage-based retention characteristics: Revenue is a leading indicator of engagement (declining usage = declining revenue). Strong NRR when customer success drives adoption growth. Volatility makes forecasting challenging. Usage-based models require close monitoring of usage trends by cohort to predict revenue impact.

Freemium and Free Trial Models

Freemium and free trial models show retention metrics primarily among paid customers, but free-to-paid conversion affects overall cohort health. Paid Customer Gross Revenue Retention: Median 82-88%. Customers who converted from free have proven engagement. Paid Customer Net Revenue Retention: Median 100-110%. Expansion often comes from team expansion post-conversion. Free-to-Paid Conversion: Strong indicator of cohort quality. Benchmarks: 2-5% freemium conversion, 15-25% free trial conversion. Freemium retention insight: The quality of paid retention depends heavily on conversion criteria. Strict conversion criteria (high value delivered before conversion) produces better paid retention than loose criteria.

Annual vs. Monthly Contracts

Contract term dramatically impacts retention metrics. Annual contract retention is significantly higher than monthly. Annual Contract Benchmarks: GRR: 88-93% (customers committed for full year). NRR: 105-118% (expansion captured at renewal). Logo Retention: 85-92%. Monthly Contract Benchmarks: GRR: 78-85% (easier to cancel anytime). NRR: 95-108% (expansion happens more gradually). Logo Retention: 75-85%. The retention difference justifies annual discount incentives. Many of the companies we work with offer 15-20% annual discounts because the retention improvement more than compensates for the discount. Track annual vs. monthly retention separately and set different benchmarks.

Contract Strategy

Annual contracts typically show 10-15 percentage points better retention than monthly. The retention improvement usually justifies significant discounts to encourage annual commitment.

Using Benchmarks Effectively

Benchmarks are most valuable when used appropriately—as context for evaluation and target-setting, not as absolute standards.

Selecting Appropriate Comparison Groups

Compare yourself to companies that are actually comparable. Match on: Customer segment (enterprise, mid-market, SMB). Industry vertical or horizontal focus. Pricing model (seat-based, usage-based, etc.). Company stage (early, growth, mature). Go-to-market motion (sales-led, product-led). A PLG SMB SaaS shouldn't benchmark against enterprise sales-led metrics. Find benchmarks from companies with similar characteristics, or adjust expectations based on known differences. When in doubt, use ranges rather than single numbers. "Our target is 85-92% GRR based on mid-market B2B benchmarks" is more honest than claiming a precise target from potentially mismatched data.

Setting Improvement Targets

Use benchmarks to set realistic improvement targets, not to achieve benchmark performance overnight. If you're at 80% GRR and benchmark median is 90%: Year 1 target: 83-85% (close the gap by 30-50%). Year 2 target: 86-88% (continue improvement). Year 3 target: 88-91% (reach benchmark range). Aggressive targets that demand jumping from 80% to 90% in one year typically fail. Retention improvement requires product changes, process improvements, and cultural shifts that take time. Incremental improvement toward benchmarks is more sustainable than dramatic unrealistic targets. Track progress against your own historical performance alongside benchmark comparison.

Communicating Benchmarks to Stakeholders

Boards and investors expect benchmark context for retention metrics. When presenting retention: Show your metrics alongside relevant benchmarks. Explain why you selected those benchmarks (customer segment, stage, etc.). Highlight where you're above, at, or below benchmark. If below benchmark, explain the gap and your improvement plan. Avoid cherry-picking favorable benchmarks—sophisticated stakeholders notice. Present the most relevant comparison honestly, acknowledge gaps, and demonstrate a plan to improve. Credibility comes from honest assessment, not from finding benchmarks that make you look good.

When to Ignore Benchmarks

Benchmarks have limitations. Ignore or discount benchmarks when: You're in a genuinely novel market without comparable companies. Your business model differs fundamentally from benchmark sources. Benchmark methodology doesn't match your metrics. You're intentionally pursuing a strategy that trades retention for other goals (e.g., aggressive pricing). Internal trending matters more than external benchmarks in many cases. Improving from 75% to 82% GRR represents genuine progress regardless of whether benchmark is 85% or 90%. Don't let benchmark comparison paralyze action when your own improvement trajectory is positive.

Benchmark Wisdom

Benchmarks tell you where you stand relative to peers, but your own trajectory tells you where you're heading. A company improving 3 points per year will eventually beat the benchmark; one stuck at benchmark will eventually fall behind improving competitors.

Frequently Asked Questions

Where can I find reliable retention benchmarks?

Reputable sources include: OpenView Partners annual SaaS benchmarks survey, SaaS Capital research and publications, KeyBanc annual SaaS survey, ProfitWell/Paddle benchmarking data, Bessemer Venture Partners cloud index, and industry-specific reports from vertical analysts. Cross-reference multiple sources when possible, as methodologies vary. Be cautious of benchmarks from vendors who benefit from certain conclusions.

Should I compare to median or top quartile benchmarks?

It depends on your goals and stage. Early-stage companies should aim to reach median—being average means you've achieved baseline product-market fit. Growth-stage companies targeting venture outcomes should aim for top quartile—exceptional retention drives exceptional valuations. Mature companies should maintain top quartile or best-in-class to sustain competitive advantage. Set targets that stretch but don't demoralize—if you're at bottom quartile, reaching median is an excellent intermediate goal.

How do I handle benchmarks that seem unrealistic for my business?

First, verify you're comparing to appropriate peer groups—mismatched benchmarks often seem unrealistic. If appropriately matched benchmarks still seem unrealistic, investigate why: Do you have a structural issue that can be fixed? Is your market genuinely different? Are you targeting customers that churn more but are easier to acquire? Document why benchmarks may not apply and set internal targets based on your specific situation. Your investors and board will appreciate honest analysis over forcing fit to inappropriate benchmarks.

How often are retention benchmarks updated?

Major benchmark surveys are typically published annually (OpenView, KeyBanc) or semi-annually. Benchmarks don't change dramatically year-over-year, so a benchmark from 1-2 years ago is still relevant. However, market conditions can shift benchmarks—economic downturns often increase churn across categories, and new competitive entrants can disrupt vertical benchmarks. Check publication dates and consider market context when using benchmarks.

Do retention benchmarks differ by geographic market?

Yes, though data is less available. North American and European markets generally show similar B2B SaaS benchmarks. Emerging markets may show higher churn due to economic volatility, currency fluctuation, and less mature customer bases. Asia-Pacific markets vary significantly by country. When expanding internationally, expect retention to initially lag your home market until you understand local dynamics. Few benchmark sources provide geographic segmentation—use home market benchmarks cautiously for international operations.

How do I benchmark if I'm in a niche without published data?

For niche markets, use proxy approaches: Find the closest adjacent vertical with published benchmarks and adjust based on known differences. Survey peer companies directly (founder networks, industry associations). Use broader category benchmarks (e.g., "B2B SaaS mid-market") as directional guidance. Focus more heavily on internal trending than external benchmarks. Build your own dataset over time by tracking retention as you grow. Even imperfect benchmarks provide useful context when acknowledged as approximations.

Disclaimer

This content is for informational purposes only and does not constitute financial, accounting, or legal advice. Consult with qualified professionals before making business decisions. Metrics and benchmarks may vary by industry and company size.

Key Takeaways

Retention benchmarks provide essential context for evaluating your company's performance, setting appropriate targets, and communicating with stakeholders. B2B SaaS benchmarks range from 82-95% GRR and 100-130% NRR depending on customer segment and company stage. Consumer subscriptions operate in a fundamentally different range, with 60-80% annual retention considered healthy. Vertical SaaS typically outperforms horizontal alternatives by 5-10 percentage points due to higher switching costs and deeper integration. Pricing model and contract terms significantly impact retention metrics, with annual contracts showing 10-15 points better retention than monthly. Use benchmarks wisely: select appropriate comparison groups, set incremental improvement targets, communicate honestly with stakeholders, and recognize when benchmarks may not apply to your specific situation. Most importantly, remember that benchmarks are snapshots of current performance across companies—your trajectory matters more than any single benchmark comparison. A company improving steadily will eventually outperform one stuck at benchmark levels. Use benchmarks as context and motivation, but focus your energy on the retention improvements that drive your specific business forward.

Tom Brennan