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What is good user retention? Advice from the experts:
• Consumer Social: 25%
45%
• Consumer Transactional: 30% 50%
• Consumer Subscription: 40% 70%
• SMB / Mid-Market SaaS: 60% 80%
• Enterprise SaaS: 70% 90%
(Read on)
• Consumer Social: 25%
45% • Consumer Transactional: 30%
50%• Consumer Subscription: 40%
70%• SMB / Mid-Market SaaS: 60%
80%• Enterprise SaaS: 70%
90%(Read on)
2/ What are these benchmarks based on?
These are averages across benchmarks from 20+ of the world's top growth experts and investors, based on their experience building and investing in some of the world's most successful businesses.
These are averages across benchmarks from 20+ of the world's top growth experts and investors, based on their experience building and investing in some of the world's most successful businesses.
3/ Is it OK if my retention is lower?
Yes, in three cases:
1. You’re just starting out
2. You have low CAC and marginal costs
3. You’re not building a venture-scale business
"Ultimately, what matters is that your retention supports sustained growth" – @far33d
Yes, in three cases:
1. You’re just starting out
2. You have low CAC and marginal costs
3. You’re not building a venture-scale business
"Ultimately, what matters is that your retention supports sustained growth" – @far33d
4/ What *is* retention?
User retention is the % of users who signed up and are still active (i.e. using the product) – 6 months later in this case.
Net revenue retention is company’s MRR one year ago divided into the current month’s MRR, from that same group of customers.
User retention is the % of users who signed up and are still active (i.e. using the product) – 6 months later in this case.
Net revenue retention is company’s MRR one year ago divided into the current month’s MRR, from that same group of customers.
5/ Why is retention important?
"Great retention is the best indicator of PMF, it is the most important factor in a user’s LTV, and high retention drives all of the best acquisition strategies. It's growth's equivalent of the triple-word-score." – @onecaseman
"Great retention is the best indicator of PMF, it is the most important factor in a user’s LTV, and high retention drives all of the best acquisition strategies. It's growth's equivalent of the triple-word-score." – @onecaseman
6/ How do I measure my retention?
A few useful resources:
https://www.sequoiacap.com/article/retention
https://www.reforge.com/blog/growth-metric-acquisition-monetization-virality
A few useful resources:
https://www.sequoiacap.com/article/retention
https://www.reforge.com/blog/growth-metric-acquisition-monetization-virality
7/ And finally, for much much more, including individual benchmarks from each expert, public comps, and additional insights, check out the full post along with @onecaseman's companion post
https://www.lennyrachitsky.com/p/what-is-good-retention-issue-29 https://caseyaccidental.com/what-is-good-retention
https://www.lennyrachitsky.com/p/what-is-good-retention-issue-29 https://caseyaccidental.com/what-is-good-retention
8/ Here’s the full post https://www.lennyrachitsky.com/p/what-is-good-retention-issue-29
