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Logo Churn Rate

The percentage of managed services clients that ended their agreement during the year.

Client Health

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.

Measurement Note

LogMeIn says the most successful MSPs keep churn below 5%, and NinjaOne puts the industry average near 5% annual churn with a retention target of 80% to 90%. The danger line is derived from NinjaOne's 80% retention floor.

Referenced In

Glossary and Answers

More in Client Health

Whether clients stay, spend more and would recommend the MSP. These numbers warn an owner about revenue at risk before the cancellation notice arrives.

All KPIs
Sources2
  1. LogMeIn Resolve: Top Ten MSP Performance Metricslogmein.com
  2. NinjaOne: How to Value Your MSPninjaone.com

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