For a cleaning business built on contracts, account churn — accounts lost over accounts at the start — directly hits recurring revenue. Retention is its complement, and lost revenue sizes the stakes.
The example
3 lost of 60 accounts.
| A | B | |
|---|---|---|
| 1 | Item | Value |
| 2 | 3 / 60 | — |
| 3 | Churn | → 5% |
The formula
The formula:
How it works
How it works:
- Churn = accounts lost ÷ accounts at the period start.
- Retention = 1 − churn — the share that stayed.
- Multiply lost accounts by average monthly value for revenue churned.
- Annualize: a steady monthly churn compounds —
1 − (1 − churn)^12.
Small monthly churn is large annual churn. 5% a month sounds survivable, but compounded it’s about 46% a year — nearly half your contracts gone if unreplaced. Recurring cleaning lives and dies on retention, so multiply lost accounts by their monthly value to see the bleed, and weigh that against the cost of better service or account management. Keeping an account is almost always cheaper than winning a new one.
Try it: interactive demo
Accounts lost, accounts at start, avg monthly value.
Variations
Retention rate
The complement:
Monthly revenue churned
Lost × value:
Annualized churn
Compounded:
Pitfalls & errors
Lost ÷ start. Use accounts at the period start as the base.
Annualize carefully. Compound monthly churn — don’t just ×12.
Zero accounts. No starting accounts gives #DIV/0!.
Practice workbook
Frequently asked questions
How do I calculate account churn in Excel?
How do I annualize monthly churn?
How much revenue is churn costing?
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