After scaling VEED to $50M in annual revenue in last 8 years, I’ve seen churn from every angle: Self-serve mobile, Enterprise and API.
Today, I'm sharing everything I’ve learned (the hard way) about churn and how you can solve it in your business👇
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## 1./ Churn depends on your category.
It's about the market you picked, not the product you built.
Build a tool a marketer uses every day → low churn.
Build a tool someone uses to make a birthday card → high churn.
– Enterprise products sit inside someone's daily workflow, so they retain.
– SMB churns higher because small businesses go in and out of business.
– Consumer churns the highest because the use cases are often one-time.
– SMB churns higher because small businesses go in and out of business.
– Consumer churns the highest because the use cases are often one-time.
If you picked the market well, the rest is optimization. If you pick it wrong, no amount of exit flow magic saves you.
The benchmarks I use:
• Enterprise: under 3% is good
• SMB: under 6% is good
• Consumer: under 12% is good
• Above 8% monthly = scaling becomes really hard
And the math that should terrify you:
10% monthly churn = you replace 70% of your user base every single year.
At $1M ARR, no big deal.
At $100M ARR, you need $10M in new ARR every month just to stay flat.
But if you have hundreds of millions of users (Spotify, Tinder, Bumble), high churn is fine since the reactivation and top of funnel is massive.
2 more terms worth knowing:
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