Logo Churn Rate

Formula

Clients lost in period ÷ Clients at start of period × 100

Why Track It

Every lost client takes its MRR and the cost of winning it with it. Rising churn usually traces to service quality, a missed business review or a competitor offering more, all of which are fixable if caught early.

How It Is Measured

Count managed services clients whose recurring agreement ended in the trailing twelve months, whether by cancellation or non-renewal. Divide by the number of managed services clients at the start of that period. Exclude clients the MSP chose to exit, but report them separately. Source: PSA agreement end dates.

Constraints

Counts clients equally regardless of size, so losing a large client reads the same as losing a small one. Pair it with gross revenue retention.

Referenced In

• How Do I Let Go of a Bad Client?AnswerRead
• What Is a QBR, and Why Does It Matter?AnswerRead
• What Is an MSP?AnswerRead
• When Should I Hire a vCIO?AnswerRead
• Logo ChurnGlossary TermRead
• LTV (Lifetime Value)Glossary TermRead

Related KPIs

• Client Net Promoter Score (NPS)The percentage of client contacts who would recommend the MSP (9 or 10 out of 10) minus the percentage who would not (0 to 6).Read
• Gross Revenue Retention (GRR)The share of recurring revenue from existing clients kept over a year, counting losses and downgrades but not expansion.Read
• Managed Services Revenue GrowthThe year over year percentage change in managed services revenue, from new clients and from growth inside existing ones.Read
• Client Lifetime Value to CAC RatioThe gross margin a typical client produces over its lifetime, divided by the cost of acquiring that client.Read
• Largest Client Share of RevenueThe percentage of total revenue that comes from the single largest client, with the top three clients tracked beside it.Read

Glossary and Answers

• QBR (Quarterly Business Review)Glossary TermRead
• GRR (Gross Revenue Retention)Glossary TermRead
• NPS (Net Promoter Score)Glossary TermRead