What is GOOD and GREAT retention?

retention across industries, Elon's idiot index, marketing 101..

Author

Oliver Stafurik
August 22, 2024 • Estimated Reading Time: 3 minutes

Retention is widely considered as the most important metric out there. Yet, it lies in that shady area not many people understand.

Startups, by definition, are pre-destined to grow fast. Nothing in this industry stays idle for a longer period time.

This is why the metrics, stats and other points of relevance that were accurate 2 years ago — are either useless or even misleading in most cases.

This being said, some of the collected datapoints might be a bit outdated, therefore only use them as your reference point, not as your Bible.

Today at Glance:

System → Retention across industries

Metric → Idiot Index

Growth Hack → Marketing 101

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Retention across most types of businesses

Great retention is the scalable way to grow a product. It’s the best indicator of product-market fit, it is the most important factor in a user’s lifetime value, and high retention drives all of the best acquisition strategies. It’s growth’s equivalent of the triple word score.

It’s very difficult to generalise when it comes to retention. This is why I’ve broken it into industries:

  • 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

Credit: Lenny Rachitsky

Let’s define user retention as the percentage of users who signed up and are still active six months later.

Consumer Social ~ 25% is good; 45% is great

Facebook ~60% retention
Instagram ~55% retention
Youtube ~55% retention
WhatsApp ~50% retention
Linkedin ~45% retention
TikTok ~40% retention
Reddit ~40% retention
Snapchat ~33% retention
Pinterest ~30% retention

Consumer Transactional ~ 30% is good; 50% is great

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