Project Management SaaS Retention Analysis

Interprets weekly retention data for a B2B SaaS product, identifying below-benchmark activation as the primary issue and providing prioritized action recommendations.

Input

What you provide to the skill

Week 1: 50%, Week 2: 38%, Week 3: 30%. We’re a project management SaaS at $49/month targeting small teams.

Output

What the skill generates for you

Cohort Analysis Interpretation

Overall Assessment: BELOW BENCHMARK - CRITICAL ACTIVATION PROBLEM

Your Week 1 retention of 50% is 10-20 percentage points below industry standards for B2B SaaS at your price point. The ongoing drop (50% → 30% by Week 3) suggests both activation and engagement issues.

Benchmark Comparison

Metric	Your Performance	B2B SMB SaaS Benchmark	Gap
Week 1 Retention	50%	60-70%	-10 to -20%
Week 3 Retention	30%	~50% (est.)	-20%
Week 0 to Week 1 Drop	50%	30-40%	-10 to -20% worse
Week 1 to Week 3 Drop	20%	~15%	-5% worse

Key Insights

1. First-Week Churn is Catastrophic

You lose 50% of users in the first week. For a $49/month paid product targeting small teams, this is alarming:

Users are paying but not experiencing value quickly enough
Onboarding likely doesn’t guide teams to their first “win”
Setup friction may be too high (no team invitation? No project created?)

Action: This is your highest-leverage problem. Fix Week 1 retention before anything else.

2. Continuing Erosion Through Week 3

Even users who survive Week 1 continue dropping at ~10% per week:

Week 1 → Week 2: 12 percentage point drop (24% relative decline)
Week 2 → Week 3: 8 percentage point drop (21% relative decline)

This suggests:

Habit formation isn’t happening
Users aren’t seeing ongoing value
No engagement hooks bringing them back

For project management tools, this often means: projects aren’t being updated, teams aren’t collaborating, tasks aren’t being completed.

3. No Stabilization Visible Yet

Typical SaaS curves flatten by Week 4-6 when you’ve found your “core retained cohort.” At only 30% retention by Week 3, you likely haven’t stabilized yet. Your long-term retention floor could be as low as 15-20%.

Implication: Only 1 in 5 paying customers may become long-term users. At $49/month, this severely limits LTV and CAC tolerance.

Recommended Next Steps

Immediate (This Week):

Identify activated users: What do the 30% who stayed through Week 3 have in common? (Projects created? Team invited? Tasks completed?)
Survey Week 1 churners: “What prevented you from getting value from [Product]?”
Analyze first-week behavior: Compare retained vs. churned - which features did survivors use?

Short-Term (Next 2 Weeks):

Define activation metric: E.g., “Created project + Invited team member + Completed 3 tasks in Week 1”
Reduce time-to-first-value: Can users see a working project board in 5 minutes instead of 30?
Add Week 1 engagement triggers:
- Day 2: “Quick win” email with template projects
- Day 4: Team collaboration prompt
- Day 7: Feature discovery nudge

Medium-Term (Next Month):

A/B test onboarding flows: Test guided setup vs. self-serve
Target 65%+ Week 1 retention: Benchmark-level performance
Add viral loop: Make team invitation core to activation (Slack/Trello model)
Implement engagement scoring: Predict churn risk, intervene early

Segmentation Suggestions

Breaking down your aggregate retention by these dimensions will reveal hidden patterns:

Dimension	Why It Matters	What to Look For
Team Size	Single users vs. teams have vastly different retention	Do multi-user accounts retain 2-3x better?
Signup Source	Channel quality varies (organic vs. paid ads)	Which sources deliver teams vs. solo users?
Activation Status	Validates your activation metric	How much better do “activated” users retain? (Should be 2-3x)
First Project Type	Entry point predicts value perception	Do users starting with templates retain better?
Invite Timing	Team products need teams	Do users who invite teammates in Week 1 retain 3x better?
Plan Type	If offering trial	Do trial-to-paid converts retain differently than direct purchases?

Financial Implications

At $49/month with 30% Week 3 retention (assuming ~20% stabilization):

Expected 12-month LTV: ~$117 (20% × $49 × 12)
Maximum viable CAC (3:1 LTV:CAC): ~$39
Reality check: If your CAC is higher than $30-35, you’re losing money on each customer

If you improve Week 1 to 65% (and Week 3 to 45% accordingly):

Expected 12-month LTV: ~$220 (45% × $49 × 12 × 0.8)
Maximum viable CAC: ~$73
Impact: 2x increase in sustainable CAC, unlocking growth channels

Summary

Verdict: Your retention is significantly below benchmark, indicating a critical activation problem. Users are paying but leaving before experiencing value. The pattern suggests:

Onboarding doesn’t drive activation
Product doesn’t create habits in first 2 weeks
Team collaboration (the stickiness driver for PM tools) isn’t happening

Primary Recommendation: Obsess over Week 1 activation. Identify what the 30% who stayed did differently, codify it as your activation metric, and redesign onboarding to drive that behavior. For PM tools, this typically means: “Created project + Invited team + Completed collaborative task.” Until Week 1 retention reaches 65%+, all other optimization is secondary.