Everyone wants to focus on how many new clients they’re signing on. But very few want to track client retention and churn. I’m here to tell you that it’s extremely important. In this video, I break down why tracking your client churn rate is crucial and why you should consistently have your eyes on it. If you want to take your agency to new heights, foster longer client relationships, and achieve those fantastic long-term outcomes, you have to track churn.
Outline of This Episode
- [0:30] What gets measured always improves
- [1:47] A simple formula to track churn
- [3:46] Retention KPIs: Benchmarks to shoot for
- [6:24] Reduce churn and improve retention
What gets measured always improves
When it comes to agency growth, I’m a firm believer in the old adage: What gets measured always improves. It’s a philosophy that holds true for life, fitness, finances, and anything you set your sights on.
When you consistently measure something, you’re giving it the attention it deserves, and where there’s focus, energy naturally flows. And where there’s consistent energy, results surely follow. That’s why it’s a big deal.
As your agency expands and scales—whether you’re at the six, seven, or even multiple seven-figure mark—you tend to focus on what you desire most: more clients and better recurring revenue. It’s a logical focus.
But here’s the kicker: if you’re only keeping track of the clients you’re gaining without monitoring your churn rate, you might be losing clients as quickly as you’re bringing them in. And that’s a hiccup you definitely want to avoid. Tracking churn is about keeping tabs on who’s coming and who’s leaving. It’s like a litmus test for client satisfaction.
A simple formula to track churn
Tracking your churn rate is easier when you can grasp this simple equation:
The clients you’ve lost ÷ the clients you had initially x10 = churn rate
I suggest entering these numbers into a “sales retention tracking sheet.” It will help you keep tabs on the metrics that matter—new clients, lost clients, retention rates, churn rates, etc. It’s like your navigation system for agency growth.
Retention KPIs: Benchmarks to shoot for
Let’s talk benchmarks. You’ll want to aim for a churn rate of no more than 3% per month. No matter how good you are, you will always deal with churn. It’s inevitable and it’s healthy. If you’re around the 95% retention mark, you’re doing just fine. 97% is solid.
But if you’re inching towards 90% or lower, you might want to hit the brakes and figure out what’s sapping that retention rate. It’s like a red flag signaling a need for some tweaks. Maybe you’re setting expectations that are too high. Maybe you aren’t delivering results. Whatever it is, you need to identify the red flag and get to work.
Reduce churn and improve retention
I’ve got a fantastic resource to help you with this journey: the “Client Retention Handbook.” This book unravels the secrets to effective onboarding, continuous communication, and client success management.
So, as you dive into tracking churn and retention, remember, it’s not just about the numbers—it’s about the stories they tell.
Resources & People Mentioned
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