2025-2026 SaaS benchmarks, supplemented by clearly labeled historical, cross-industry, and adjacent-market research on pricing, engagement, billing, and customer outcomes
The SaaS industry faces a persistent challenge: keeping customers and recurring revenue. SaaS Capital's 2026 benchmark for bootstrapped B2B SaaS companies with $3M to $20M ARR reports 91% median GRR and 103% median NRR. A historical 2018 CallMiner study estimated that customer switching cost U.S. businesses at least $136 billion annually across multiple sectors. Pricing design can also be associated with retention outcomes. High Alpha's 2025 SaaS benchmark reports hybrid pricing with 105% NRR, compared with 102% for subscription pricing, 100% for outcome-based pricing, and 99% for consumption-based pricing. These are benchmark associations, not proof that pricing model alone causes retention differences. Orb's usage-based billing engine supports usage-based and hybrid pricing and customer-specific price changes. Orb extends that foundation with Experience Kit for customer-facing usage visibility and spend controls for alerts and spend-management workflows.
Key takeaways
- Retention remains a core SaaS benchmark: SaaS Capital reports 103% median NRR and 91% median GRR for bootstrapped B2B SaaS companies with $3M to $20M ARR in 2026
- Pricing model and retention are associated: High Alpha reports 105% NRR for hybrid pricing, compared with 102% for subscription, 100% for outcome-based, and 99% for consumption-based pricing
- Retention improvements can compound materially: Bain's classic cross-industry research found that a 5% increase in customer retention can increase profits by 25% to 95%
- Expansion becomes more important at scale: High Alpha reports that SaaS companies above $50M ARR generate roughly 60% of new ARR from existing customers
- Early engagement matters for users: Pendo's user-retention benchmark, published in 2025, says software products retain about 30% of users after three months, a user-retention metric rather than subscription or customer churn
- Payment credential maintenance matters: Visa reports that, on average, 30% of Visa Account Updater card accounts in an issuer's portfolio experience an account-number change, expiration-date change, or closure each year
What is churn rate in SaaS?
Churn rate measures the percentage of customers or revenue lost over a specific period. For SaaS companies, this metric serves as a critical health indicator because it shows whether recurring customer and revenue relationships are being retained over time.
Defining customer churn in the SaaS context
Customer churn occurs when subscribers cancel their subscriptions, fail to renew, or otherwise stop paying for a service. Understanding customer attrition patterns helps companies identify which segments are at risk and where retention interventions may have the greatest impact.
1. Bootstrapped B2B SaaS companies with $3M to $20M ARR show 103% median NRR in SaaS Capital's 2026 benchmark
SaaS Capital's 2026 benchmark reports 103% median NRR for bootstrapped B2B SaaS companies with $3M to $20M ARR. The benchmark is based on SaaS Capital's annual survey of more than 1,000 private B2B SaaS companies.
2. The same 2026 cohort shows 91% median GRR
SaaS Capital reports 91% median GRR for bootstrapped B2B SaaS companies with $3M to $20M ARR, providing a revenue-retention benchmark before expansion revenue is included.
3. The 90th percentile NRR reaches 117.9% in SaaS Capital's 2026 benchmark
SaaS Capital reports 117.9% NRR at the 90th percentile for bootstrapped B2B SaaS companies with $3M to $20M ARR.
4. The 90th percentile GRR reaches 100% in the same benchmark
SaaS Capital reports 100% GRR at the 90th percentile for the same bootstrapped B2B SaaS cohort.
The churn rate formula: calculating customer attrition accurately
Accurate churn measurement requires consistent methodology. Orb's customer churn rate formula divides the number of customers lost during a period by the total customers at the beginning of that period, then multiplies by 100.
Step-by-step calculation of customer churn rate
To calculate monthly customer churn:
- Count customers at the start of the month
- Count customers lost during the month, including cancellations and non-renewals
- Divide lost customers by starting customers
- Multiply by 100 for percentage
5. The 25th percentile of customer churn was 9.35% in Lighter Capital's 2025 benchmark
Lighter Capital's 2025 B2B SaaS startup benchmark reports 9.35% customer churn at the 25th percentile, compared with 9.07% in its 2024 benchmark.
6. Mean customer churn reached 20.46% in Lighter Capital's 2025 benchmark
Lighter Capital reports 20.46% mean customer churn in its 2025 B2B SaaS startup benchmark, compared with 20.32% in its 2024 benchmark.
7. The 75th percentile of customer churn reached 27.25% in the 2025 benchmark
Lighter Capital reports 27.25% customer churn at the 75th percentile in its 2025 benchmark, compared with 27.00% in its 2024 benchmark.
8. The 25th percentile of revenue churn was 5.48% in the 2025 benchmark
Lighter Capital reports 5.48% revenue churn at the 25th percentile in its 2025 B2B SaaS startup benchmark, down from 6.07% in its 2024 benchmark.
SaaS retention benchmarks and growth performance
Retention and growth are closely related, but benchmark relationships should not be interpreted as proof that retention alone determines growth. Company stage, product, market, sales efficiency, and expansion strategy also matter.
9. Median growth across private B2B SaaS companies was 22% in SaaS Capital's 2026 survey
SaaS Capital's 2026 survey of more than 1,000 private B2B SaaS companies reports a 22% median growth rate.
10. Bootstrapped SaaS companies reported 20% median growth in the 2026 survey
SaaS Capital reports 20% median growth for bootstrapped private B2B SaaS companies in its 2026 survey.
11. Equity-backed SaaS companies reported 25% median growth in the same survey
SaaS Capital reports 25% median growth for equity-backed private B2B SaaS companies in its 2026 survey.
12. Moving from 90-100% NRR to 100-110% NRR is associated with five percentage points more growth
SaaS Capital reports that moving from the 90% to 100% NRR range into the 100% to 110% range is associated with a five-point growth increase. This is a benchmark association rather than proof that the NRR change alone caused the growth difference.
13. The highest-NRR cohort reports median growth 173% above the survey population median
SaaS Capital reports that companies in its highest NRR cohort have median growth 173% higher than the population median. This is an observed relationship within the survey.
Retention by pricing model
High Alpha's 2025 SaaS benchmark shows meaningful differences in NRR across pricing models. These figures describe associations among respondents and do not establish that pricing structure alone causes the retention result.
14. Hybrid pricing shows 105% NRR in High Alpha's benchmark
High Alpha reports 105% NRR for hybrid pricing, the strongest NRR among the four pricing approaches in the analysis.
15. Subscription pricing shows 102% NRR in the same analysis
High Alpha reports 102% NRR for subscription pricing in its pricing-model analysis.
16. Outcome-based pricing shows 100% NRR in High Alpha's analysis
High Alpha reports 100% NRR for outcome-based pricing.
17. Consumption-based pricing shows 99% NRR in High Alpha's analysis
High Alpha reports 99% NRR for consumption-based pricing.
Expansion and retention at scale
18. SaaS companies above $50M ARR generate roughly 60% of new ARR from existing customers in High Alpha's benchmark
High Alpha's 2025 benchmark reports that companies with more than $50M ARR generate roughly 60% of new ARR from existing customers, highlighting how expansion becomes a major growth engine at scale.
Revenue churn distribution across B2B SaaS startups
19. Median revenue churn reached 12.50% in Lighter Capital's 2025 benchmark
Lighter Capital's 2025 B2B SaaS startup benchmark reports 12.50% median revenue churn, up from 11.34% in its 2024 benchmark.
20. Mean revenue churn reached 17.90% in the 2025 benchmark
Lighter Capital reports 17.90% mean revenue churn in its 2025 benchmark, compared with 17.01% in its 2024 benchmark.
21. The 75th percentile of revenue churn reached 24.53% in the 2025 benchmark
Lighter Capital reports 24.53% revenue churn at the 75th percentile in its 2025 benchmark, compared with 22.75% in its 2024 benchmark.
22. Median customer churn held nearly steady at 16.25% in the 2025 benchmark
Lighter Capital reports 16.25% median customer churn in its 2025 benchmark, compared with 16.21% in its 2024 benchmark. The underlying financial dataset uses connected business data from 155 private B2B SaaS startups across 11 verticals, recorded from 2020 through 2024.
Customer churn prediction and retention analytics
Predicting churn before cancellation can help teams intervene while an account is still active. Product and customer analytics can surface changes in engagement, while Orb's Experience Kit provides customer-facing usage and pricing visibility that helps customers understand and plan usage.
23. Top-decile software products retain 1.7× as many users as average products by month one
Pendo's user-retention benchmark, published in 2025, reports that the top 10% of software products retain 1.7× as many users as the average product by month one. This is user-retention data rather than customer or subscription churn.
24. One telecom churn model test achieved 88.6% precision at a 0.7 threshold
Spyrosoft reports that a telecom churn dataset test using Google Vertex AI AutoML achieved 88.6% precision at a 0.7 confidence threshold. This is one telecom-model result, not an industry-wide SaaS precision benchmark.
25. A McKinsey telecom case reported a 10-15% churn reduction over 18 months
McKinsey reported that one leading telecom operator reduced churn by 10-15% over 18 months after developing more than 50 offers and rapidly launching and measuring campaigns for customer microsegments. This is a historical telecom case, not a current SaaS benchmark.
26. The customer journey analytics market reached $17.35B in 2025
The Business Research Company reports that the customer journey analytics market reached $17.35 billion in 2025. This is an adjacent analytics-market statistic rather than a SaaS churn benchmark.
Customer churn analysis: uncovering the root causes of attrition
Understanding why customers leave requires examining product engagement, pricing, customer experience, and account-level context. The following figures include clearly labeled user-retention and cross-industry evidence alongside SaaS-specific benchmarks.
27. Software products lose about 70% of users within three months
Pendo's user-retention benchmark, published in 2025, says software products retain about 30% of users after three months, meaning roughly 70% are not retained over that period. Pendo measures user retention rather than customer or subscription churn.
28. 85% of surveyed U.S. adults who had contacted a supplier switched suppliers in CallMiner's 2018 study
CallMiner's 2018 Churn Index reported that 85% of surveyed adults who had contacted a supplier in the prior five years switched suppliers during the prior 12 months, averaging 1.81 switches. The survey included 1,000 U.S. adults and is historical, cross-industry research.
29. 29% of consumers stopped using or buying from a brand because of poor customer experience
PwC's 2025 Customer Experience Survey reports that 29% of consumers said they stopped using or buying from a brand because of a poor customer experience. This is cross-industry consumer research, not a SaaS-specific churn benchmark.
30. Only 18% of surveyed companies focused more on retention than acquisition in a historical e-commerce and retail survey
A Retain.me e-commerce and retail survey of 68 companies found that 18% focused more on retention than acquisition. This is historical e-commerce and retail research rather than a SaaS benchmark.
Pricing and vertical churn signals
31. Price was cited by 66% of switchers in CallMiner's 2018 churn study
CallMiner's 2018 Churn Index reports that 66% cited high prices or price increases among the main supplier actions that prompted switching. This is historical, cross-industry consumer research rather than a current SaaS-specific benchmark.
32. Education SaaS startup revenue churn increased 71% in Lighter Capital's 2025 benchmark
Lighter Capital reports that revenue churn for Education SaaS startups increased 71% in its 2025 benchmark. The finding applies to Lighter Capital's startup sample rather than the education SaaS sector generally.
33. Education SaaS startup customer churn doubled from 11% to 22%
Lighter Capital reports that customer churn for Education SaaS startups doubled from 11% in the 2024 benchmark to 22% in the 2025 benchmark. The finding is scoped to Lighter Capital's startup sample.
34. Healthcare SaaS startups exhibited a 67% increase in revenue churn
Lighter Capital reports that SaaS startups in the Healthcare vertical exhibited a 67% revenue churn increase in its 2025 benchmark. The claim is scoped to that startup sample.
Customer retention strategies to combat churn
Effective retention requires coordinated work across product, pricing, customer success, and billing. Orb's Price Evolution supports pricing simulations, customer-specific rollouts, and spend-threshold alerts, helping teams evolve monetization while maintaining clear pricing and usage experiences.
35. A 5% retention improvement can boost profits by 25-95%
Bain's classic cross-industry loyalty research found that a 5% increase in customer retention can increase profits by 25% to 95%. This is a longstanding cross-industry benchmark, not a current SaaS measurement.
36. Public software companies with NRR above 120% traded at a 63% premium to the SEG SaaS Index median in 2Q24
Software Equity Group's 2Q24 public-software data found that companies with NRR above 120% had a median EV/TTM revenue multiple of 9.3x, a 63% premium to the total SEG SaaS Index median of 5.7x. This is a historical public-market valuation benchmark, not a current private-SaaS valuation rule.
37. 52% of consumers stopped using or buying from a brand because of a bad product or service experience
PwC's 2025 Customer Experience Survey reports that 52% of consumers said they stopped using or buying from a brand because of a bad experience with its products or services. This is cross-industry consumer research, not a SaaS-specific churn benchmark.
38. No renewal reward was cited by 30% of switchers in CallMiner's historical study
CallMiner's 2018 Churn Index reports that 30% cited no renewal reward as a reason for switching suppliers. This is historical, cross-industry research rather than a current SaaS benchmark.
39. Top-decile software products retain 1.9× as many users as average products by month three
Pendo's user-retention benchmark, published in 2025, reports that top-decile software products retain 1.9× as many users as the average product by month three. This is user-retention data, not customer or subscription churn.
40. Only 7.3% of companies in SaaS Capital's 2026 survey reported flat or negative growth
SaaS Capital reports that 7.3% reported flat growth or negative growth in its 2026 private B2B SaaS survey. Retention is only one contributor to growth, so this figure should not be interpreted as a churn metric.
Churn rate vs. retention rate: two sides of the same coin
While churn measures loss, retention rate measures the percentage of customers or revenue that remains. Customer retention and revenue retention answer different questions, so teams should track both alongside expansion.
41. High Alpha says gross retention has stabilized around 90% across ARR bands
High Alpha's 2025 SaaS benchmark says GRR has stabilized across cohorts and describes roughly 90% retention as the norm across ARR bands. This is a broad benchmark statement rather than a churn rate for one company segment.
42. Average software user retention is about 39% after one month in Pendo's benchmark
Pendo's user-retention benchmark, published in 2025, reports that software products retain about 39% of users after one month on average. This is user retention rather than customer retention.
How pricing design relates to expansion and retention
Pricing models can influence how revenue expands with customer value, but benchmark differences should be treated as associations rather than universal causal rules. Orb supports subscription, usage-based, and hybrid structures in the same billing platform, giving teams one coordinated platform for evolving monetization and billing workflows.
43. Outcome-based pricing companies grew 65% year over year in High Alpha's analysis
High Alpha reports 65% year-over-year growth for SaaS companies using outcome-based pricing in its analysis, the highest growth rate among the pricing models it compared.
44. Consumption pricing grew 43%, hybrid pricing 40%, and subscription pricing 34% in High Alpha's analysis
High Alpha reports 43% growth for consumption pricing, compared with 40% for hybrid pricing and 34% for subscription pricing. These are associations within the benchmark population rather than proof of pricing-model causality.
Billing agility for customer retention and reduced subscription churn
Billing infrastructure shapes the pricing, visibility, and recovery experiences a company can offer. Orb's usage-based billing engine supports flexible and customer-specific pricing, usage-based and hybrid monetization, and usage-management alerts. Orb's collections automation adds proactive reminders, payment retries, and automated customer communications for overdue balances.
Billing friction and churn exposure
45. 57% of respondents contacted a supplier because of an invoice or bill problem in CallMiner's historical study
CallMiner's 2018 Churn Index reports that 57% contacted a supplier because of a problem with the invoice or bill, the second most common contact reason in the study. This is historical, cross-industry research rather than a SaaS billing benchmark.
46. 40% wanted to be heard before calling about a problem, but only 23% felt heard afterward
CallMiner's 2018 study reports that 40% wanted to be heard before calling a supplier about a problem, while 23% said they felt listened to afterward. This is historical customer-experience research rather than a SaaS-specific statistic.
47. On average, 30% of Visa Account Updater card accounts experience a credential change or closure each year
Visa says that, on average, 30% of Visa Account Updater card accounts in an issuer's portfolio experience an account-number change, expiration-date change, or closure each year. This is an adjacent payment-credential statistic, not a SaaS churn or recovered-revenue percentage. Orb's finance workflows support advanced dunning, configurable payment retries, customer communications, and recovery workflows for overdue invoices or failed payments.
Why pricing model selection can shape retention outcomes
High Alpha's 2025 benchmark reports the strongest NRR among the analyzed pricing models for hybrid pricing, at 105%, while its growth analysis shows strong performance for outcome-based and consumption-based models. These relationships are meaningful benchmark signals but do not establish that pricing model alone determines churn or retention. Potential retention advantages of flexible pricing include:
- Value alignment: Usage-based components can tie charges more closely to consumption
- Lower barrier to stay: Reduced usage during slower periods can lower spend without necessarily requiring cancellation
- Natural expansion: Growing usage can increase revenue as customer consumption grows
- Transparency: Clear usage visibility and spend controls can help customers understand and manage what they are paying for
For SaaS teams that need pricing flexibility across billing, customer experience, and collections, Orb brings usage-based and hybrid pricing, Price Evolution, usage visibility, collections workflows, and advanced dunning into one revenue design platform. This breadth supports monetization iteration while keeping billing, usage visibility, and finance workflows coordinated.
Frequently asked questions
What is a good churn rate for a SaaS company?
There is no single churn benchmark that applies to every SaaS company. Company stage, customer profile, contract structure, and revenue mix materially affect the appropriate comparison set. Lighter Capital's 2025 startup benchmark reports 16.25% median customer churn, while SaaS Capital's 2026 benchmark for bootstrapped B2B SaaS companies with $3M to $20M ARR reports 103% median NRR and 91% median GRR. These metrics measure different retention dimensions and should be interpreted within their respective cohorts.
How does churn rate impact customer lifetime value?
All else equal, churn rate and CLTV have an inverse relationship. Reducing churn extends customer tenure and increases the revenue opportunity from each retained account. Bain's classic research found that a 5% increase in customer retention can increase profits by 25% to 95%, although that figure is cross-industry rather than SaaS-specific. Longer-tenured customers can also create more opportunity for expansion, which can increase CLTV beyond simple tenure extension.
Can flexible pricing models help reduce churn?
Flexible pricing can support stronger value alignment, but benchmark differences should not be treated as universal causal proof. High Alpha reports 105% NRR for hybrid pricing, compared with 102% for subscription pricing, 100% for outcome-based pricing, and 99% for consumption-based pricing in its analysis. Orb provides the billing infrastructure and Price Evolution capabilities to implement, simulate, and evolve flexible pricing models while maintaining customer-specific pricing and spend controls.
What are the key differences between customer churn and revenue churn?
Customer churn counts the percentage of customers who leave, treating all accounts equally regardless of size. Revenue churn measures the percentage of recurring revenue lost, weighting larger accounts more heavily. A company could lose many small accounts while retaining most recurring revenue if larger accounts stay. Both metrics matter because customer churn shows how broadly accounts are retained, while revenue churn shows the financial impact of account losses.
What role does billing transparency play in churn reduction?
Billing transparency can support retention by helping customers understand and manage usage, pricing, and spend. Orb's Experience Kit supports customer-facing usage and pricing experiences, including dashboards that help customers plan and optimize usage, while Price Evolution supports spend alerts and customer-specific pricing changes. Together with Orb's billing and finance workflows, these capabilities help teams create a more coherent revenue experience without assigning a specific churn-reduction percentage to billing transparency alone.