What is the average churn rate for SaaS companies in 2026?

The median monthly churn rate across all SaaS companies is approximately 2.5%, which compounds to roughly 26% annual churn. Enterprise-focused SaaS companies median closer to 0.5% monthly, while SMB-focused products median 2.5–3.5% monthly. These figures are sourced from Baremetrics and ProfitWell benchmark datasets.

Which industry has the highest subscription churn rate?

E-commerce subscription boxes have the highest median monthly churn at 7–10%. Consumer mobile app subscriptions and B2C EdTech follow at 6–7.5% monthly. These categories have low switching costs, abundant alternatives, and high discretionary cancellation rates.

Why does healthcare SaaS have lower churn than other software verticals?

Healthcare IT churn is suppressed by regulatory compliance requirements, data migration complexity, staff retraining costs, and vendor credentialing processes. Switching an EHR or clinical workflow platform is a 12–24 month project. These structural barriers hold monthly churn below 1% even when customer satisfaction scores are mediocre.

What is a good churn rate for a fintech company?

A good monthly churn rate for B2B fintech is under 1.5%, with top performers below 0.7%. Consumer fintech products (budgeting apps, personal finance tools) run higher at 3–5% monthly because switching costs are lower and free alternatives are abundant.

How does contract length affect churn rate by industry?

Annual contracts reduce apparent monthly churn by 60–80% compared to equivalent monthly contracts in the same vertical, because cancellations can only occur at renewal. This is a structural effect, not a retention improvement. Companies switching from monthly to annual billing should expect measured monthly churn to drop significantly without any change in underlying customer satisfaction.

Average Churn Rate by Industry (2026 Data)

Churn Rate Benchmarks by Industry (2026)

Churn is not a single number—it is a function of contract structure, switching costs, customer segment, and product category. Comparing your churn rate against a broad SaaS average produces misleading conclusions. The only meaningful comparison is against companies in your vertical with a similar customer segment and pricing model.

Industry / Vertical	Monthly Churn (Median)	Annual Churn (Median)	Top Quartile Monthly
Enterprise SaaS (B2B)	0.5%	5.8%	<0.3%
SMB SaaS (B2B)	2.5%	26%	<1.5%
Fintech / Banking SaaS	1.2%	13.7%	<0.7%
Healthcare IT / MedTech	0.8%	9.2%	<0.5%
Legal Tech	1.0%	11.4%	<0.6%
Media & Streaming	5.2%	48%	<3.5%
E-Commerce Subscription	8.0%	65%	<5.0%
Consumer Mobile (SaaS)	7.5%	60%	<4.5%
EdTech (B2C)	6.0%	53%	<4.0%
Marketing / Adtech	3.2%	32%	<2.0%

Why Enterprise SaaS Has the Lowest Churn

Enterprise contracts enforce retention structurally. Multi-year agreements with auto-renewal clauses, dedicated customer success teams, and deep integrations with internal systems all raise switching costs. Enterprise SaaS churns at 0.5% monthly not because enterprise products are universally better, but because a cancellation decision requires executive approval, procurement involvement, and migration planning that can take 6–12 months.

This is why B2B churn runs 3–4× lower than B2C churn—contract friction, not product quality, is the dominant variable.

Media and Streaming: Structural Volatility

Media and streaming subscriptions—video, music, podcasts—suffer from high discretionary cancellation. Customers subscribe for specific content (a show season, a sporting event) and cancel when that content ends. This creates predictable churn spikes after content windows close. Netflix's disclosed annual churn has ranged from 30–40% in mature markets. Spotify sits at approximately 20% annual churn globally, suppressed by student and family plans with lower cancellation rates.

The pattern is consistent: media products that have a compelling recurring reason to return (weekly releases, live sports, news) sustain monthly churn below 4%. Products without a recurring hook see monthly churn climb above 6–8%.

E-Commerce Subscriptions: The Highest-Churn Category

Subscription boxes—beauty, meal kits, pet supplies—represent the highest-churn subscription category at 7–10% monthly. Baremetrics' 2025 e-commerce subscription benchmark placed median monthly churn at 8.2%. The driver is low perceived switching cost: the product is physical, and alternatives are abundant.

Meal kit services including HelloFresh and Blue Apron have disclosed annual churn exceeding 50% in their SEC filings. Retention in this category depends heavily on pause and skip functionality—companies that allow pauses retain customers at 20–30% higher rates than companies that force cancellations.

Fintech and Healthcare: Regulated Industries Retain Customers

Switching a core banking platform or an EHR system requires data migration, regulatory sign-off, staff retraining, and integration rebuilding. These structural barriers suppress churn to 1–2% monthly even when customer satisfaction is low. Churn in regulated industries is a lagging indicator of dissatisfaction—customers stay long past the point they would have cancelled a horizontal SaaS product.

Healthcare IT median monthly churn of 0.8% masks high gross revenue churn risk when contracts do expire: regulated-industry customers who decide to switch are almost impossible to win back, making proactive retention critical even when headline churn looks healthy.

How to Benchmark Your Product Accurately

A vertical benchmark is a floor, not a target. To benchmark meaningfully, you need to control for three variables: customer segment (SMB vs. enterprise), pricing model (usage-based vs. seat-based vs. flat fee), and contract duration (monthly vs. annual). An annual-contract enterprise SaaS product benchmarked against monthly-contract SMB SaaS will appear to have excellent retention when it may not.

Compare monthly churn against monthly-billing peers, annual churn against annual-billing peers
Segment your own churn by plan tier before comparing to industry medians
Track net revenue retention alongside gross churn—some high-churn verticals offset with strong expansion

For context on how B2B and B2C dynamics produce different churn profiles within the same industry, see B2B vs. B2C churn. For the mechanics of converting monthly figures to annual, see monthly vs. annual churn.