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A Summary of

What is good retention - Issue 29

by
Lenny Rachitsky
Lenny's Newsletter
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Good and great product retention are hard metrics to estimate with accuracy. Unless you are a seasoned growth expert, pinpointing product retention typically relies on dated and misguided information. Based on findings from experienced growth practitioners these metrics help estimate good and great retention.

GOOD and GREAT User Retention

  • Consumer Social: ~25% is GOOD, ~45% is GREAT
  • Consumer Transactional: ~30% is GOOD, ~50% is GREAT
  • Consumer SaaS: ~40% is GOOD, ~70% is GREAT
  • SMB / Mid-Market SaaS: ~60% is GOOD, ~80% is GREAT
  • Enterprise SaaS: ~70% is GOOD, ~90% is GREAT

GOOD and GREAT Net Revenue Retention

  • Consumer SaaS: ~55% is GOOD, ~80% is GREAT
  • Bottom-Up SaaS: ~100% is GOOD, ~120% is GREAT
  • Land and Expand VSB SaaS: ~80% is GOOD, ~100% is GREAT
  • Land and Expand SMB / Mid-Market SaaS: ~90% is GOOD, ~110% is GREAT
  • Enterprise SaaS: ~110% is GOOD, ~130% is GREAT

Why is Product retention important?

  • It is a scalable tool used to grow a product.
  • It is a great way to measure a product’s fit within a market.
  • It is an important factor to measure the product’s lifetime value to a user.
  • It tells you whether your business will likely thrive or suffer.

When is Low Product retention OK?

  1. You are just getting started with your business.
  2. You have low customer acquisition cost (CAC) and low marginal cost.
  3. You are not building a venture-scale business.
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