Are newer cohorts renewing better than older ones?
№ 179 · Renewal rate by cohort
Definition
MetricLogo renewal rate by signing cohort
Unit% of contracts reaching term that renew, by cohort
Triangular grid showing renewal % per cohort per year-of-renewal. Newer cohorts should renew better as onboarding improves. Build by tracking renewal outcomes per cohort. Example: Oct 25 cohort renewing 92% at year 1; Mar 26 cohort already 96% at month 0 (improving).
Benchmarks
| Bottom 30% | Median | Top 30% |
|---|---|---|
| 78% to 80% | 85% to 89% | 92% to 95% |
Private B2B SaaS, annual contracts, logo count rather than dollars, measured at first renewal for the cohort. Blended across segments; enterprise runs materially higher than SMB. · Definitions diverge sharply here and the divergence is the point. RevOps Squared puts median logo retention at 85% and Vista Point at 89%, both measuring annual-contract B2B where a renewal is a discrete event. ChartMogul, measuring a mostly self-serve and monthly-billed population, finds even the top quartile retains only 70% of customers at twelve months, and 77% at $15M to $30M ARR. Those are not contradictory numbers, they are different businesses: monthly self-serve has a renewal decision twelve times a year. Use the 85% to 89% band only if contracts are annual and renewal is an event. RevOps Squared data is 2022 and Vista Point 2021, so both predate the retention compression that Benchmarkit and KeyBanc recorded through 2023 and 2024; adjust the band down two to three points for a current reading. Logo rate also flatters or hides dollar outcomes, so never show this card without GRR next to it.
| Category | Bottom 30% | Median | Top 30% |
|---|---|---|---|
| Company ARR $1M to $5M | 82% | 89% | 93% |
| Company ARR $50M to $100M | 76% | 83% | 90% |
| Enterprise-focused (ACV above $100K) | 85% | 90% | 95%+ |
| Self-serve or monthly-billed | under 45% | 50% to 60% at 12 months | 70% at 12 months |
When it looks bad
Each successive cohort line sits below the one before it at the same tenure point, so the newest customers renew worse than the customers acquired two years ago, which means acquisition quality is degrading faster than customer success can compensate.
Cohort renewal at first term: 2023 signings 88%, 2024 signings 84%, 2025 signings 79%. The company reports blended retention as stable because the older, better cohorts still dominate the base, but the forward run rate is 79%.
What to do about it
- Overlay acquisition channel on the cohort lines. A declining newest cohort almost always traces to a channel or a discount cohort rather than to the CS team, and the fix sits in qualification rather than in post-sale motion.
- Check whether the decline is a mix shift before treating it as a quality problem. If newer cohorts skew toward lower ACV, RevOps Squared and SaaS Capital data both predict a lower renewal rate mechanically, and the cohort is behaving exactly as its price point implies.
- Instrument a first-renewal early warning at day 90 rather than day 300. ChartMogul's data shows churn tends to rise in year two while expansion concentrates in year one, so a cohort that under-adopts in months one to three arrives at first renewal already lost.
- Split involuntary non-renewal out of the cohort line. On card-billed cohorts Recurly's network data shows involuntary churn is materially recoverable through retry logic and card updater services, and leaving it in the line makes a billing problem look like a product problem.
Sources
- Drivetrain (citing RevOps Squared B2B SaaS Benchmarks) Median logo retention across companies is 85%, ranging from 89% at $1M to $5M ARR down to 83% at $50M to $100M ARR. Logo retention is most informative below roughly $10K per customer; above that, gross dollar retention is the better read. drivetrain.ai ↗
- Vista Point Advisors Median gross revenue retention 88% with a long tail toward lower retention. Median logo retention 89%. Enterprise-focused software should reach at least 90% logo retention to be considered best in class. Logo retention behaves as a qualification checkbox rather than a valuation driver. vistapointadvisors.com ↗
- ChartMogul Top quartile NRR by ARR band: 94% at $1M to $3M, 99% at $3M to $15M, above 105% at $15M to $30M. 41.1% of businesses with ARPA above $500 per month hold NRR above 100%, versus 2.7% below $10 ARPA. Best-in-class GRR is around 95% for B2B; 35.7% of businesses above $500 ARPA hold GRR above 85%. Top quartile customer retention is 90% at three months and 70% at twelve months, rising to 93% and 77% at $15M to $30M ARR. chartmogul.com ↗
- Benchmarkit (with Pavilion) Median NRR 101% (down from 105% in CY-21, 103% in CY-22). Median GRR 88%, down from 90% over three years. Expansion ARR is 40% of total new ARR at median, 58% at $50M to $100M ARR, 67% above $100M. Expansion CAC ratio $1.00 versus new customer CAC ratio $2.00. Subscription gross margin 81% median. GRR and NRR both rise as ACV rises. 5242563.fs1.hubspotusercontent-na1.net ↗
- ChurnZero (with ESG, SaaStr, HubSpot) Modal respondent profile is $5M to $49M company revenue, 51 to 200 employees, ACV $25,000 to $99,999 (41% of respondents), and self-reported NRR of 101% to 110%. Ownership of the renewal process is trending away from CS toward dedicated renewal teams. churnzero.com ↗
- KeyBanc Capital Markets and Sapphire Ventures Gross retention is expected to approach the 90% threshold after declining to 86% in 2023. Net retention has remained above 100% through the same period with modest improvement expected. YoY ARR growth expected to accelerate from 15% in 2024 to 20% in 2025. sapphireventures.com ↗
- ChartMogul Expansion drives up to 40% of growth for companies at $15M to $30M+ ARR, versus 30% in early 2021. Even the top quartile at $15M to $30M+ ARR failed to reach 100% NRR in 2024. Companies at or above 100% NRR draw over half of added revenue from expansion; companies below 60% NRR draw 70% from new business and 15% from expansion. New customers expand most during year one as they ramp usage, and churn tends to rise in year two. Median churn in the low NRR bucket is 7%, double that of companies at or above 100% NRR. chartmogul.com ↗
- Recurly Median annual involuntary churn across industries is 1.25%, ranging from 0.18% for high-ARPC businesses to 1.69% in higher-risk sectors. SaaS sits at 1.06%. Involuntary churn falls 87% from the lowest to the highest ARPC tier and is recovered through intelligent retry logic, automated dunning and account updater services. recurly.com ↗
- SaaS Capital Companies with ACV between $25,000 and $50,000 report median NRR of 102%, top quartile 111%, bottom quartile 97%. NRR correlates positively with ACV. Companies with the very highest ACVs report the highest GRR. NRR defined as December 2024 MRR from customers present in December 2023, divided by total December 2023 MRR. saas-capital.com ↗