How is Downgrade MRR calculated?

Modified on: Mon, 30 Aug, 2021 at 2:29 PM

Monthly Recurring Revenue lost from Subscriptions that moved from existing to lower-priced plans.
Explanation of metric
  • A trend line depicting the reduction in Monthly Recurring Revenue caused by Addons removed from Subscriptions, and decrease in Subscription quantity due to recurring discounts.
  • A point in time indicator of the downgraded MRR. It also displays variance with respect to previous period and percentage variances of Downgrade MRR across different periods.
How it's measured
Downgrade MRR = (Total decrease in MRR of ACTIVE Subscriptions due to Subscription change)


Note: Cancellations and moved to IN TRIAL Subscriptions are not included in this report.
Reading

Down: Good

Interpretation
  • It is a critical financial metric influencing MRR velocity. High Downgrade MRR means Customers are not finding enough value in their current Plans for the price they pay.
  • Example: In a given period, Subscription (Customer) has moved from Plan A (MRR $500) to Plan C (MRR $100).
    Downgrade MRR = (500-100) = $400.

Click here to know about other metrics.

M
Monica is the author of this solution article.

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