What Your Client Churn Is Really Telling You

Hey there, Welcome back to Agency Finance Letters.

An exciting update! I’ll be doing a webinar for agency owners on Thursday together with Kyle Hunt at Agency Operators. I’ll be talking about the key metrics to track and how to setup your finances to scale.

Kyle has also offered additional seats, more info on that here: https://try.agencyoperators.io/cfo-roadmap-to-500k-mo1738003446853

Hope to see some of you there!

Now back to the topic of the week - which is churn.

Instead of looking at churn as just a percentage, let's break it down into patterns that can drive real decisions – particularly how industry specialization affects client retention.

1. The Specialist vs Generalist Pattern When analyzing agency churn by industry focus, we consistently see a clear trend: agencies that specialize in specific industries retain clients longer than generalist agencies serving multiple sectors.

Here's why industry expertise matters:

• Deep industry knowledge builds trust with clients who feel understood

• Industry-specific experience leads to faster problem-solving

• Better project scoping from understanding common industry challenges

• Higher perceived value when you speak the client's language

Pro tip: If you're seeing 90% retention in one sector but 60% in others, that's your signal to double down on the industry where you're already showing strength.

2. Analyze Churn by Team Your account managers' patterns reveal more than performance:

• Who retains the most revenue?

• Who expands accounts consistently?

• Who loses clients early?

• Who maintains long-term relationships?

Pro tip: High churn doesn't always mean poor performance - it might mean mismatched clients or overloaded teams.

3. Review Service Line Stability Some services naturally retain better:

• Strategic vs tactical work

• Multi-service vs single-service clients

• High-touch vs automated services

4. Check Your Price Points Map your churn against what clients pay:

• Track retention by price tier

• Look for natural breaking points

• Monitor expansion patterns

• Note price sensitivity signals

5. What To Do With This Data

• Double down on your lowest-churn industry

• Support your highest-retention team members

• Phase out your highest-churn services

• Adjust pricing to optimal retention points

Remember: Every churned client means new business is needed just to stay flat.

Want help analyzing your churn patterns? Just hit reply.

Stay focused on what works,
Joey

P.S. Know someone who should be looking at their churn data? Share this with them.