Ehsan Jahandarpour
Churn RateSaaSSeries B

Churn Rate for SaaS at Series B

2026 data · Sample size: 444 · Source: Lenny Rachitsky Newsletter Benchmarks

25th %ile
2%
Median
3.2%
75th %ile
4.7%
90th %ile
6.2%
▼Trending down year-over-year

About This Metric

Percentage of customers or revenue lost during a given period. The inverse of retention.

Customers Lost / Starting Customers × 100

Lower is better · Unit: percentage

How to Improve

Implement proactive customer success outreach triggered by declining usage patterns. Build an automated health score that identifies at‑risk accounts 60 days before renewal. Conduct exit interviews to understand churn reasons and address root causes. Improve onboarding completion rates so customers realize value quickly. Create switching costs through integrations, data, and workflow dependencies.

Ehsan's Analysis

The median SaaS churn rate of 5-7% monthly for SMB and 0.5-1.5% monthly for enterprise hides a more important distribution: churn is bimodal, not normal. Most SaaS companies have ~30% of customers who will never churn (power users deeply integrated into workflows) and ~50% who are at constant risk (casual users who could switch tomorrow). The middle 20% is where retention investments actually pay off. Gainsight analyzed 200 SaaS companies and found that targeting retention efforts at the "swing segment" (users who log in 2-3x per week but do not use advanced features) yields 4x better ROI than blanket retention campaigns. The actionable insight: segment your base into "safe" (weekly power users), "swing" (regular but shallow), and "gone" (declining usage for 3+ weeks). Ignore the safe, accept the gone, and pour everything into converting the swing segment to power users.

EJ

Ehsan Jahandarpour

AI Growth Strategist & Fractional CMO

Forbes Top 20 Growth Hacker · TEDx Speaker · 716 Academic Citations · Ex-Microsoft · CMO at FirstWave (ASX:FCT) · Forbes Communications Council

Frequently Asked Questions

What is a good Churn Rate for SaaS companies at Series B stage?
The median Churn Rate for SaaS companies at the Series B stage is 3.2%. Top‑quartile companies (75th percentile) significantly outperform this baseline. The most important factor is consistent improvement over time rather than hitting any single target number.
How does Churn Rate differ by company stage in SaaS?
Churn Rate typically decreases as SaaS companies mature from seed through growth stage. Earlier‑stage companies should benchmark against stage‑appropriate peers rather than comparing themselves to mature companies.
How often should SaaS companies measure Churn Rate?
SaaS companies at the Series B stage should track Churn Rate monthly with quarterly deep‑dive analysis. Set up automated dashboards and alerts for significant deviations from your baseline.
What factors most impact Churn Rate in the SaaS sector?
In SaaS, the primary factors impacting Churn Rate include product‑market fit maturity, competitive landscape intensity, customer segmentation strategy, pricing optimization, and operational efficiency. Series B‑stage companies should focus on the one or two highest‑leverage factors rather than trying to optimize everything simultaneously.
How does Churn Rate for SaaS compare to cross‑industry benchmarks?
SaaS Churn Rate benchmarks can differ significantly from cross‑industry averages due to factors specific to the SaaS vertical including customer acquisition dynamics, competitive intensity, and typical deal sizes. Always compare against industry‑specific benchmarks rather than broad averages for meaningful insights.