Churn is the silent killer of SaaS businesses. You can have great acquisition, strong MRR growth, and a beautiful product — and still die slowly because too many customers leave every month. So the question every founder asks: what is a good churn rate? The honest answer: it depends on who you sell to.
Logo Churn vs Revenue Churn
Logo churn counts customers lost: if you start the month with 100 customers and lose 4, your logo churn is 4%. Revenue churn counts money lost, including downgrades. If the 4 customers who left were on your cheapest plan, your revenue churn might only be 2%. Track both — revenue churn tells you whether you are losing the customers who actually matter.
Realistic Benchmarks
- SMB SaaS (self-serve, low price): 3–7% monthly logo churn is common. Painful, but normal.
- Mid-market SaaS: 1–3% monthly.
- Enterprise SaaS: under 1% monthly, often measured annually.
These are industry rules of thumb, not laws. The cheaper and more self-serve your product, the higher your churn will naturally be — and that is fine as long as your acquisition cost and LTV math still works.
Why Churn Compounds (The Scary Math)
5% monthly churn sounds small. But it compounds: after 12 months, only about 54% of those customers remain. That is 46% annual churn — you must replace nearly half your customer base every year just to stand still. This is why small churn improvements feel so powerful: dropping from 5% to 3% monthly roughly doubles customer lifespan.
The Formula
Monthly logo churn = Customers lost during month ÷ Customers at start of month
Monthly revenue churn = MRR lost (churn + downgrades) ÷ MRR at start of month
4 Ways to Reduce Churn
- Fix onboarding first. Most churn is decided in the first week. Get users to their first "aha" moment faster.
- Watch engagement, not logins. Track the action that predicts retention (e.g., reports created) and intervene when it drops.
- Talk to every cancel. Exit surveys give you a ranked list of what to fix next.
- Price honestly. A lot of "churn" is actually mis-pricing — customers who never fit your plan to begin with.
Know your real number.
Plug in your customer counts and see your churn, retained customers, and projected MRR impact.
Open SaaS Churn Calculator →Churn feeds directly into runway and MRR health. Check your cash runway and track your MRR to see the full effect of retention on your business.