Cancellation rate

Definition

The share of recurring accounts that quit in a year, which decides what the route is worth.

Why It Matters

A recurring book is only worth a multiple if it recurs, and this is the number that says whether it does. It also moves with things a buyer controls: a route where one technician serves the same houses every quarter holds, and one where a different person turns up each time does not. Ask for cancellations by month and by technician for two years, because an annual average hides a bad hire and a price rise that cost more than it earned.