MSP KPI Definition
MSP Revenue Churn: Definition & Formula
Gross revenue churn measures the recurring revenue lost from the starting client base through cancellations and reductions during a defined period. Illustrative example: $3,000 lost from a $100,000 starting MRR base is 3% for that period. New-client revenue and expansions do not offset this gross measure. Report cancellations separately if your churn policy excludes contractions.
By MSP Fuel · Examples are illustrative.
Target interpretation
Context matters
Set the target against your service scope and company plan.
Formula
Gross revenue churn % = (starting-cohort recurring revenue lost to cancellations + contractions) ÷ starting-cohort recurring revenue × 100
Why it matters
New sales must first replace lost recurring revenue before producing net growth.
Revenue churn and client-count churn answer different questions when client sizes vary.
Common mistakes
Offsetting losses with new clients and still calling the result gross churn.
Applying a monthly rate as an annual assumption in the planner.
Comparing different cohorts or silently changing the treatment of reductions.
What moves the number
Reconcile opening MRR, losses, expansions and new-client additions each period.
Investigate loss reasons alongside service and relationship signals.
Use a consistently defined annual assumption in the Growth Planner.
Related MSP Fuel resources
Your company plan sets the target, priority and timing for improving this number from your current position.
Further reading: Stripe: recurring revenue losses and retention. External definitions provide context; MSP Fuel model-specific classifications are explained above.