Upgrades and Downgrades: Where Most Reporting Goes Wrong - Issue 272

Making sense of customer movements: Upgrades, Downgrades, and Re-Subscribers

Welcome to the Data Analysis Journal, a weekly newsletter about data science and analytics.

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Today, I am continuing my deep dive on customer movements - how to measure and report customer upgrades and downgrades.

A few weeks ago, I introduced the concept of re-subscribers in Re-Subscribers: Are Your Customers Coming Back?, where we covered:

• Re-subscribers are customers who previously paid, churned, and later came back to pay again (e.g., they started a new paid subscription).

• They are one of the strongest signals to measure how well your product delivers, whether the pricing is justified, and whether there’s room to increase it.

• Yet, most analytics tools get them wrong: they either misclassify them as new subscriptions, expansion revenue, or worse, grace-period recoveries.

• There are many types of re-subscribers, but only one group truly matters: those who left and returned by choice. This group is the clearest indicator of long-term product value and growth potential.

• I shared my SQL approach to correctly identify and segment true re-subscribers - the kind who churned and came back by choice, not due to billing edge cases or else.

Re-subscribers often get bucketed with upgrades and downgrades - and that’s where most analysts get it wrong. They treat winbacks as either expansion or contraction, when in reality, they’re neither. As a result, 99% of winback reporting out there overestimates how many returning customers the team is actually bringing back.

In your reporting, you need to separate re-subscribers from customers who upgraded or downgraded. Below, I’ll walk you through how to do that - how to make your winback reporting accurate and how to properly segment all types of returners.

A recap: why re-subscribers are important

It's much harder to retain users than it is to convince them to make a purchase.

But bringing users back after they’ve canceled a subscription is even harder.

Once someone has tried your product, there’s not much marketing can do to win them back - if the product didn’t deliver on its promise. Or if it did, but not in the way the user expected. Or maybe it wasn’t worth the price.

So, the % re-subscribers from your total active customers or paid MAU is the clearest indicator of seasonality, value recognition, and product stickiness. They voluntarily paid again [at the same price?], for something they already used.