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SaaS Customer Retention Rate Benchmarks: Industry Standards and Best Practices

For SaaS (Software as a Service) companies, customer retention is critical for long-term success. Retaining customers not only ensures a stable revenue stream but also reduces acquisition costs and enhances brand reputation. Therefore, SaaS businesses should monitor their customer retention rate (CRR) and benchmark it against industry standards and best practices. In this blog post, we'll discuss SaaS customer retention rate benchmarks and best practices for improving retention.

SaaS Customer Retention Rate Benchmarks

According to a 2021 report by Totango, the average CRR for SaaS companies is 82%. However, CRR varies widely across different industries and company sizes. Here are some CRR benchmarks for different industries:

1. Consumer: 78%

2. Healthcare: 83%

3. Manufacturing: 83%

4. Retail: 82%

5. Software & Technology: 87%

These benchmarks can serve as a guide for SaaS companies to assess their own CRR and identify areas for improvement. However, it's essential to note that CRR is not a one-size-fits-all metric, and each company should set its own target based on its business goals and customer base.

Best Practices for Improving SaaS Customer Retention

To improve CRR, SaaS companies should focus on providing exceptional customer experiences, demonstrating value, and engaging with customers. Here are some best practices for improving SaaS customer retention:

1. Provide Exceptional Customer Service: Great customer service can significantly impact CRR. SaaS companies should ensure that their customer service is responsive, personalized, and proactive in addressing customers' needs and concerns. This includes providing self-help resources, such as FAQs and tutorials, and offering multiple channels of support, including email, phone, and chat.

2. Demonstrate Value: To retain customers, SaaS companies must demonstrate the value of their product or service continually. This involves understanding customers' needs and pain points and highlighting how the platform solves their problems. SaaS companies should also monitor usage data and proactively identify opportunities to help customers derive more value from the platform.

3. Engage with Customers: Regular engagement with customers can enhance retention by building a strong relationship between the customer and the company. SaaS companies can achieve this by offering personalized recommendations, providing product updates and release notes, and conducting surveys to gather feedback.

4. Offer Flexibility and Personalization: SaaS companies should offer flexible pricing plans and customization options that cater to customers' unique needs. This includes providing the ability to add or remove features, customizing user interfaces, and offering different levels of support.

5. Measure and Analyze Metrics: SaaS companies should regularly monitor customer engagement and retention metrics to identify trends and patterns. Metrics such as customer lifetime value (CLTV), net promoter score (NPS), and churn rate can help companies understand customer behavior and make data-driven decisions.


Customer retention is critical for SaaS companies, and monitoring CRR against industry standards and best practices can help identify areas for improvement. SaaS companies should focus on providing exceptional customer experiences, demonstrating value, engaging with customers, offering flexibility and personalization, and measuring and analyzing metrics. By implementing these best practices, SaaS companies can improve their CRR and build a loyal customer base for long-term success.

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