What is upgrade MRR? How is it calculated?

Modified on: Sat, 26 Jun, 2021 at 11:35 PM

Upgrade MRR

This is the additional MRR from all customers who have upgraded to a higher pricing plan from a lower-priced plan or purchased a recurring add-on.  It’s indicative of an increase in the subscription quantity or movement to a higher pricing plan. As customers upgrade, the MRR increases. Upgrade MRR gives you a fair representation of how well your product scales with the growth of your customers. 

Upgrade MRR = Total sum of the MRR gained from all subscription which is active as of a specific period compared to their MRR in the previous period. 

For example, if a subscription is moved from plan A (MRR $50) to plan B (MRR $150) then the Upgrade MRR would be $100.

If a customer downgrades the plan but adds an addon that is more than the plan downgrade amount, it is also an upgrade. For example, if a subscription moves from Plan A (MRR $50) to Plan C (MRR $25) and adds a recurring addon for $50, the Upgrade MRR will be $25. 

When you have the right set of features in all your plans and are constantly adding valuable new features, it encourages your customers to upgrade. If this number is not increasing, you are probably offering too much value in the lower plans. And your customers don’t have a reason to upgrade. You’ll have to revisit your plans and pricing.

Monica is the author of this solution article.

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