Our team recently conducted a study analyzing customer retention rates across sixteen major industries. Our study was designed to determine how effectively companies retained customers year-over-year and to provide a sound benchmark for firms to use when comparing their own performance.
We expected significant variation within industries, particularly between B2B services models and highly commoditized retail markets, and developed a series of normalization adjustments for variables as diverse as contract duration, voluntary churn, and service bundling. This report summarizes results, methodology, and strategic conclusions drawn from the data.
Methodology
This report aggregates data from 14 industry-leading sources like Exploding Topics, Sprinklr, Vena Solutions, G2, and Demand Sage. Customer retention data are all calendar-year data from January 2023 to March 2025 to most accurately reflect post-pandemic behavior. Data were taken wherever possible from industry studies, CRM platform benchmarks, and firm proprietary retention analysis reports.
Customer Retention Rate (CRR) was determined by using the below standard formula:
To ensure uniformity across industries with varying customer engagement patterns, we standardized timeframes into annualized retention and separated by industry vertical by using the NAICS-coded aggregations. Overall, this analysis encompasses 10,214 firms with coverage in North America, Western Europe, and select APAC markets.
Customer Retention Rates in 2025
In the table below, we rank-ordered the sectors we studied by average customer retention rate.
Average Customer Retention Rates by Industry – 2025
| Industry | Average Retention Rate | Industry Performance vs. Mean |
| Automotive | 76% | 0% |
| B2B SaaS | 74% | -2% |
| Business Consulting | 85% | 9% |
| Commercial Insurance | 86% | 10% |
| Construction | 79% | 3% |
| Cybersecurity | 71% | -5% |
| eCommerce | 62% | -14% |
| Entertainment | 70% | -6% |
| Financial Services | 74% | -2% |
| HVAC Services | 66% | -10% |
| Hotels & Hospitality | 55% | -21% |
| IT & Managed Services | 83% | 7% |
| Legal Services | 75% | -1% |
| Manufacturing | 66% | -10% |
| Medical Device | 80% | 4% |
| Oil & Gas | 77% | 1% |
| PCB Design & Manufacturing | 74% | -2% |
| Real Estate | 78% | 2% |
| Software Development | 82% | 6% |
| Transportation & Logistics | 79% | 3% |
| Telecom | 75% | -1% |
Sector Performance Analysis
The leaders in our customer retention analysis were Commercial Insurance (86%), Business Consulting (85%), and IT & Managed Services (83%), all of which benefit from high switching costs and therefore a built-in incentive to continue services. At the opposite end were the Hotels & Hospitality (55%) and eCommerce (63%) sectors, with commoditised products and constant price-based churn.
Customer Churn Rates in 2025
The inverse of churn is retention, and industries that have high churn (e.g., Credit and Cable Services) are likely to have systemic User Experience flaws, price volatility, or suboptimal loyalty infrastructure.
Industries with Highest Churn Rates – 2025
| Industry | Typical Churn Rate | Notes |
| Financial Services | 26% | Low price sensitivity and low differentiation |
| Telecom | 25% | Poor customer care, price escalation |
| Retail | 24% | Highly competitive, value-driven |
| eCommerce | 22% | Amazon effect, low switching costs |
| Hotels & Hospitality | 18% | Cyclical demand, and with high purchase prices |
Determinants of High Retention Rates
Across high-performing industries, the retention levers correlated with >80% annual retention were:
- Customer segmentation combined with highly personalized offerings
- High switching costs through long-term contracts and bundled services
- Proactive, personal delivery of services and specialist account handling
- Onboarding initiatives to bring about early value realization
- Prompt, usage-based upsells
Industries with poorer retention had less (a) formal use of data, (b) loyalty infrastructure, or (c) ongoing CX programs.
Forecast: Retention Rates by 2026
Early indicators for 2026 are:
- SaaS and IT services will register a slight (1–2%) increase in retention resulting from industry-wide adoption of enhanced onboarding and customer success programs
- Retail can expect further decline in retention unless there is stronger investment in loyalty and personalization increases
- Telecom will stabilize as connectivity and content are increasingly bundled
- Hospitality is likely to grow steadily with growing popularity of high-end vacation loyalty programs
