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SaaS Metrics Library
Customer Retention Rate: Calculation, Benchmarks & Improvement Guide
Understand customer retention rate, calculate it with your own numbers, see what the published retention benchmarks show, and get practical tips to improve it.
CUSTOMER RETENTION RATE
No benchmark for logo retention is published.
A logo retention figure cannot tell a company that kept its largest customers from one that kept its smallest. The published measure is revenue retention.
2026 benchmark · 226 of 342 B2B SaaS companies
This article will provide
- Calculation
- Benchmarks
- Improvement
Customer retention rate is the percentage of existing customers who remain customers after a given period, generally one year.
How is customer retention calculated?
To calculate customer retention rate for a period, start with the number of customers at the end. Subtract any new customers won during that period. Then divide by the number you had at the start, and multiply by 100.
Retention is usually quoted as an annual figure. If you are working from quarterly or monthly data, raise the rate to the power of the number of periods — 4 for quarters, 12 for months.
A 96% quarterly retention rate becomes 85% across a year, because 0.96 is multiplied by itself four times.
Here is the annual customer retention rate, calculated from annual data.
Customer retention is the opposite of customer churn. It measures the share of customers who stay.
There are several ways to measure it. You can calculate the retention rate as above, track repeat purchases, or measure how long customers keep buying.
For many B2B SaaS companies, customer retention rate means the same thing as logo retention.
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Download the 2026 SaaS Benchmark Report We’ve emailed you a copy as well.How is Customer Retention used by SaaS companies?
SaaS (Software as a Service) companies rely on customer retention as a key factor in their business model. A high customer retention rate generates consistent, predictable revenue and supports long-term growth.
What is a good Customer Retention Rate?
What counts as a good customer retention rate varies by industry, market, company size and stage of development. No single number applies everywhere.
A high rate that keeps climbing is the signal to look for.
What are the Customer Retention benchmarks?
There is no single universal retention benchmark, because retention tracks contract size more closely than almost anything else. Compared within a contract-value band, however, the 2026 data is consistent across studies. The figures below are observed medians from 939 B2B SaaS companies.
Customer retention benchmarks for 2026
Retention varies too much by contract size for a single market average to be useful. Segmented by what customers pay, though, the 2026 data is consistent and unusually clear — and it shows why the monthly figure most teams report can be so misleading.
95.8%
SMB monthly retention
59.7%
The same rate, across a year
99.3%
Enterprise monthly retention
91.9%
Enterprise, across a year
Three and a half points a month become thirty-two a year
Compounded annual logo retention, by contract value.
59.7%
Under $10k
77.5%
$10k–$50k
85.5%
$50k–$100k
91.9%
Over $100k
Every band looks strong measured monthly — the worst is still 95.8%. Compounded across a year the same rates separate by more than thirty points. The monthly view is the one most teams report; the annual view is the one that describes the business.
Customer retention benchmarks by contract value
| Average contract value | Monthly retention | Annual, compounded | Common annual target |
|---|---|---|---|
| Under $10k (SMB) | 95.8% | 59.7% | 80–87% |
| $10k–$50k (mid-market) | 97.9% | 77.5% | 87–92% |
| $50k–$100k (upper mid-market) | 98.7% | 85.5% | 92–95% |
| Over $100k (enterprise) | 99.3% | 91.9% | 92–95% |
The last two columns are different kinds of number and should not be read as a like-for-like comparison. The annual figures are observed medians across 939 companies. The target ranges are aspirational guidance published separately. The gap between them at the SMB end — 59.7% observed against an 80–87% target — is the distance between where the median company is and where advice says it should be, not evidence that either figure is wrong.
Do not use revenue retention as a stand-in
Gross and net revenue retention are widely published — 84% and 102% respectively across 342 companies — and it is tempting to quote them when a customer-retention figure is wanted. They measure something different. Revenue retention counts dollars; customer retention counts customers. A company can retain 95% of its revenue while losing a third of its customers, if the ones leaving are small. That is precisely what the churn data shows happening at the SMB end of the market, so the substitution fails hardest exactly where the question matters most. See revenue retention separately →
Converting between the two views
Annual retention is the monthly rate raised to the twelfth power, not the monthly rate multiplied by twelve. At 95.8% a month that is 0.95812 = 59.7%. The shortcut of subtracting monthly churn twelve times gives 49.6%, which is wrong in the other direction. Whichever convention you adopt, state it on the chart — most disagreements about a retention number turn out to be disagreements about the period.
Source: Optifai’s 2026 B2B SaaS churn study, 939 companies segmented by average contract value; retention figures are the inverse of the observed logo churn rates. Target ranges from ChurnDefense’s 2026 segment guidance and are stated as targets, not observed medians. Revenue retention figures from the 2026 Aleph × Benchmarkit benchmarks.
See retention over time
See what monthly retention really means over a year.
A small monthly loss compounds into a much larger annual problem. ScaleXP keeps customer retention current and shows finance how short-term customer movements affect the full-year result.
Compound retention correctly rather than multiplying or averaging monthly percentages.
Automate Your SaaS MetricsExample connected customer-retention view
- Customer data: Active, new and churned
- Period: Monthly and annualized
Monthly customer retention
98.0%
The proportion of the opening customer base retained during one month.
Illustrative example figures, not your live data.
Customer Retention Visualization Example
This chart is an example of customer retention shown over two years. Multi-year graphs make it much easier to understand trends, improvements, even seasonality.
ScaleXP automates customer retention rate calculations. It connects to your accounting and CRM systems and uses text recognition to match records automatically.
The graphs are interactive. You can drill into the detail, right down to a breakdown by customer name.
Retention is one of several SaaS metrics the platform automates. See our SaaS metrics for the full picture.
Frequently asked questions
What customer retention rate should a B2B SaaS company target?
A B2B SaaS company should target annual customer retention of 80–87% for SMB contracts and 92–95% for enterprise, yet the 2026 benchmarks show actual annual retention of 59.7% for contracts under $10k and 91.9% for contracts over $100k. The gap comes from compounding, because 95.8% monthly retention becomes just 59.7% over a year. ScaleXP calculates customer retention rate automatically from accounting and CRM data, so finance teams track the true annual figure against target rather than a flattering monthly number.
Can ScaleXP calculate customer retention rate from QuickBooks and HubSpot?
Yes, ScaleXP calculates customer retention rate automatically by matching customers in QuickBooks or Xero with records in HubSpot, Salesforce or Pipedrive. New customers are separated from retained ones, so the retention rate reflects the existing base only. ScaleXP prepares the metric daily alongside 30+ other SaaS metrics, including churn, NRR and GRR. Finance teams stop reconciling customer lists by hand and get a customer retention figure that is current and consistent every month.
How does ScaleXP keep logo retention consistent with revenue retention?
ScaleXP keeps logo retention and revenue retention consistent because both are calculated from the same invoices and journals in Xero or QuickBooks. Customer counts and recurring revenue come from one source, so finance can explain why the two diverge, for example when small customers leave and large ones stay. Each view is clearly labeled, so the board does not mistake revenue retention for customer retention rate. The result is retention reporting that ties to the financial statements and holds up to investor scrutiny.
Can ScaleXP show customer retention by cohort in board packs?
Yes, ScaleXP shows customer retention by cohort in interactive graphs, live dashboards and PowerPoint board packs. Directors can see how each signup cohort holds up over time and drill down in presentation mode to the customers behind every point. ScaleXP turns customer retention rate into an early warning, highlighting cohorts and segments where retention is slipping before it shows up in revenue. Finance teams deliver retention insight the board can act on, without a spreadsheet rebuild each month.
For Xero, QuickBooks and Zoho Books
Turn customer retention into an early warning.
ScaleXP shows which customers stayed, which left and how retention differs by cohort. Finance gets a current view of customer quality before the annual number reveals the damage.
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From customer records to a current retention view
ScaleXP brings together active customers, subscriptions and relevant CRM records.
Related metricscustomer churn raterenewal retention rategross and net revenue retentionnet dollar retention
You may also be interested in
Customer Churn
Customer churn is the percentage of customers who stop doing business with a company or using a service.
Net Dollar Retention
Measures growth in revenue from a group of customers. Typically split into upgrades, downgrades, renewals and losses.
Net Revenue Churn
Increase in MRR from current customers, calculated from Churned and Downgraded less Upsells.