Churn
also known as attrition · client attrition · customer churn
The rate at which clients (or recurring revenue) leave over a period. For agencies, lower churn compounds into far higher lifetime value.
For example, if an agency starts the quarter with 20 retainer clients and loses 2, that is a 10% client churn rate for the quarter. It is worth tracking in revenue terms too: losing two $3,000 retainers is $6,000 of monthly recurring revenue walking out the door.
Why it matters to your firm: churn is the leak in the bucket. Because retainers compound, even a few points of lower churn dramatically increases each client's lifetime value - and it is almost always cheaper to keep a client than to win a new one.
Lower is always better, and the trend matters more than any single number - because retainers compound, even small reductions in churn meaningfully raise lifetime value.
Client churn rate = clients lost in period ÷ clients at start of period × 100
Track revenue churn the same way, using MRR lost ÷ MRR at the start of the period.
Churn rate calculator
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- Counting lost logos but ignoring the revenue that left with them.
- Reacting to churn after the fact instead of watching leading signals like NPS.
- Pouring effort into new business while the existing bucket quietly leaks.