What is a good churn rate?
Churn benchmarks swing dramatically by segment, so a single target is misleading. Enterprise churn and SMB churn live in different worlds because of price, switching cost, and customer sophistication.
Rather than chase a universal number, judge churn against your segment and against NRR. If expansion keeps NRR above 100 percent, moderate churn is survivable; if it does not, even low churn hurts.
Short answer
A good churn rate depends on segment. Enterprise B2B SaaS should keep annual logo churn under 5 to 7 percent (well under 1 percent monthly). SMB and self-serve often run 3 to 5 percent monthly, which is 30 to 45 percent annually. The real test is whether net revenue retention stays above 100 percent.
Key takeaways
- Enterprise: under 5 to 7 percent annual logo churn is strong.
- SMB and self-serve: 3 to 5 percent monthly is common.
- Revenue churn matters more than logo churn for the P and L.
- The ultimate test is NRR staying above 100 percent.
Churn benchmarks by segment
Enterprise SaaS often achieves annual gross revenue churn under 5 percent because contracts are sticky and switching is expensive. Mid-market lands higher. SMB and self-serve products routinely see 3 to 5 percent monthly churn, since small businesses fail and switch more often.
Negative revenue churn, where expansion from retained customers more than offsets losses, is the gold standard. It means your revenue base grows even if you stop selling to new customers.
How Ardovo handles it
Ardovo shows churn against your own segment history and against NRR, so you judge it in context. Rook predicts which accounts are likely to churn from engagement and support signals, turning a lagging metric into an early warning.
Frequently asked questions
What is a good annual churn rate for SaaS?
For enterprise, under 5 to 7 percent annual logo churn is strong. SMB runs much higher, often 30 percent or more annually. Compare within your segment and watch revenue churn, not just logos.
What is a good monthly churn rate?
Enterprise should be well under 1 percent monthly. SMB and self-serve commonly see 3 to 5 percent. Because churn compounds, even small monthly rates become large annual losses.
What is negative churn?
Negative churn (negative revenue churn) is when expansion from existing customers exceeds the revenue lost to cancellations and downgrades, so the base grows on its own. It corresponds to net revenue retention above 100 percent.