(1 min read)
Growing the value of individual customers is a consistent priority for subscription services. This growth comes from two places, a longer subscriber lifecycle and higher subscription revenue. This guide will describe how to use your upgrade/downgrade analytics. They can be found on the Subscribe step of the Retention Journey.
Cleeng’s upgrade and downgrade functionality is a powerful tool for generating both forms of growth. Before explaining how this tool should be used, let’s first define the measurement of subscriber upgrades and downgrades.
Subscriber Upgrade measurement: Expansion in the transactional revenue generated by an individual subscriber.
Examples of subscriber upgrades include:
- Switching from a monthly to an annual subscription
- Switching from a lower priced to a higher priced subscription
- Purchasing an additional subscription
Trial-to-paid subscribers are not counted as upgraders.
Subscriber Downgrade measurement: Contraction in the transactional revenue generated by an individual subscriber.
Examples of subscriber downgrades include:
- Switching to a lower priced subscription
- Terminating a subscription (where the subscriber has multiple subscriptions)
Analysing your Upgrade and Downgrade Metrics
Your upgrade and downgrade metrics have both persistent and seasonal relevance, with the use being slightly different in each case.
The persistent use of your upgrade metric should be as a running target for subscriber value growth every month. Using your subscriber engagement analytics, you should identify 10-15% of your subscriber base with whom variations in upgrade messaging should be tested.
Seasonal dynamics also affect how you should view your upgrade metrics. Periods of high signup rates should be used for intensifying efforts to upgrade subscribers. During such periods, your upgrade count should be tracked much more closely, as the opportunity to upsell your subscribers is typically greater and the fine-tuning of messaging even more important.
Conversely, downgrades in high churn periods should play an active role in your retention strategy.
While downgrades are generally not desirable, they should be understood from a value perspective as successfully avoiding a subscribers value from going to zero. During highly volatile periods, where churn intensifies, downgrade offers should be central to your retention efforts.