It takes into account the increase in the MRR caused by factors such as add-ons added to the subscriptions. It’s indicative of an increase in the subscription quantity or movement to a higher dollar plan.
How is Upgrade MRR calculated?
If a subscription is moved from plan A (MRR $50) to plan B (MRR $150) then the Upgrade MRR would be $100
How should a business interpret Upgrade MRR?
An increase in upgrade MRR indicates your product is scaling as your customer’s scale. 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.
Added Hint: Also seeing churn numbers will tell you if there is a value problem (high churn, low upgrades) or a pricing problem (low churn, low upgrades)