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Downgrades are part of service design

This is a short analysis of a service downgrade experience at a popular UK “neo-bank”. It aims to be a personal observation from the point of view of a customer, who happens to be a product designer.

The product design community emphasises the importance of having a good end-to-end user experience. It drives business metrics, it makes customers happy; it has been proven to have huge benefits for both parties.

Good UX goes beyond a typical interface of a mobile or desktop app. It requires a more holistic approach to designing end-to-end product experiences, which takes form of “service design.” As a result, it has a lot of moving parts, and can be tricky to grasp.

Sometimes we can overlook parts of a product that later end up being crucial to delivering a good overall experience. It’s easy to throw away all goodwill we have built in other places up until this point.

Downgrade flows are often one such neglected area.

Easy to upgrade

Whenever people want to upgrade to an above-standard level of service, they are implicitly expecting some kind of benefit. In this case, I was swayed by a boatload of exclusive features that would help me become a master of money management thanks to having a premium bank account.

Or so I led myself to believe.

Convinced it might be good to have access to some advanced features, I decided to give it a go. The app upgraded me to a new account in a matter of seconds with a shiny new debit card arriving a few days later.

The upgrade process itself was easy. All I had to do was browse the offer screen and tap on a few buttons to confirm that all information was correct. Nothing difficult or fancy and all done under a minute. It felt effortless. It set the bar high.

With a new card comes a new problem: now, I needed to update payment details for every online service I use. It’s an inconvenient problem, but nothing people aren’t willing to do for a fancy holographic card.

So, I went on and updated card details in all places I could think of.


Several weeks later, I realised that I don’t use most of the features I had access to. Those that appealed to me were not a real deal-breaker. This goes is in line with a general consensus among SaaS customers that “having valuable functionality is not enough” (83% of respondents, SaaS Cancellation Risk Study (2018)).

Since I no longer needed those features, I decided to downgrade back to a basic account.

The side effects of downgrading

When you attempt to change a level of service you receive, an app might show you the consequences of such an action. It often happens in an attempt to surface the dread of “missing out” on features you currently have access to. It’s standard practice these days, so I expected it here too.

The app made sure I understood that I will not be able to use that fancy holographic card anymore. My card would get cancelled and replaced straight away with a standard one.

What the app didn’t tell me was that after cancelling my card I will have to update billing details again. Deja vu, anyone?

Since a trivial downgrade suddenly became packed with not-so-trivial side effects, let’s examine what will happen:

  • The bank will cancel my current holographic card, despite it still being a valid payment token (it hasn’t expired, got stolen, cloned, etc).
  • All future payments linked to this card will fail; the cardholder will have to update card details again for all linked accounts and services.
  • I will receive a new card which I’ll have to add to all services, replacing the one I currently use.

While I perceived this as an unfortunate reality of getting a new card when I upgraded five months ago, this time it felt like I was being punished for my decision to downgrade. Besides, the notion of rendering a piece of helpful plastic redundant without any other reason than to kick me out of the club made me feel awkward.

One thing that still wasn’t clear was whether I would have to pay for a replacement card. The thought of being inconvenienced by my service provider because of their own policy and paying them for this inconvenience was bordering on absurd.

When it comes to banks and payment methods, most people won’t realise there’s anything wrong until their payments start to fail. This may take days or weeks, depending on an individual schedule. You will have to go through a loop of updating your card details, then making sure all payments get processed again. All in an effort to continue enjoying other services that are dependant on a piece of plastic with some numbers on it.

How to avoid this? Test extensively.

For starters, the bank could have tested their downgrade process over time. This would have likely revealed some of the issues I have mentioned, as well as exposed the true value of higher tier service for paying customers.

We often think of user testing as a process to qualify features or doing research to better understand the decision-making mechanisms. You’ll rarely see design teams going crazy over “testing a cancellation process,” because testing account downgrades isn’t as glamorous as seeing your customers use a hot new transaction rounding feature.

In this case, a simple usability test is unlikely to indicate any long-term consequences a downgrade would have for a customer. Such side-effects will have manifested only after payments started to fail days or weeks later, so it makes sense to observe and test the service end-to-end over time.

Preventing a potential disaster

How do we ensure the consequences of downgrading won’t have a negative impact on your customers? Let’s start with the card itself.

A fancy card is often a symbol of status for banks and their customers. Cancelling such a card might make sense to the bank, as it strips the customer of a primary reason why they want it (status games).

But let’s consider a few counterpoints:

Keeping the card is cheaper to the business. Minimum contract term for this tier was three months, charged at £5/mo. While replacing a card is a £5 charge, the bank does it for free when downgrading. If a customer keeps their current card there’s no cost to the business.

It may not seem like much, but what if your adjusted annual churn rate is 5% and you have a million customers? Suddenly, £150,000 (£3/card) leaving your business becomes a big liability.

Keeping the card helps keep the plastic off of our landfills and oceans. Yes, a bank can reduce its environmental impact too. There’s no need to destroy and throw away a perfectly valid card. Reuse, recycle, reduce.

Keeping the card retains base functionality for day-to-day banking. Customers will continue to use their existing card, ensuring there’s no service interruption due to failed payments. It’s a sure-fire way to smooth things out and keep them happy, leaving a good impression.

Keeping the card creates a memory effect and continues the push for brand awareness. Customers keep using their fancy card and this alone can spark interest from people around them. This is important, since most neo-banks have little to no brand awareness or street cred. It can also serve as a visual reminder to existing customers that could later reignite their interest in service upgrade, when/if their needs change.

Imagine customer’s reaction when they are told they will be able to keep their current card after the downgrade, precisely so that they won’t have to update their details online and to avoid the negative impact on the environment. It’s a win-win situation: you’re showing that you’ve thought about the side effects of a downgrade and are trying to reduce both: inconvenience and waste.

Making your customers feel good is a ticket straight into brand loyalty.

Don’t ask about the cancellation straight away

Give people time to cool down and sit on their decision for a few days. What do they miss? Was there anything in particular that wasn’t working out for them but is working now? How are they coping without the additional features?

Time gives people a better perspective. Being in the moment might be quite emotional and lead to feedback that won’t give you any useful points to work with.

The aftermath

A downgrade experience has a profound impact on the reputation of a service. It can affect customer retention, and will likely leave a lasting impression on those downgrading. Adding friction to the downgrade process is not exactly the right way to go. If the user wants to cancel, they will find a way.

A 2018 study of more than 294 “at risk” SaaS customers indicates that 40% of those who make a decision to cancel will never reconsider. Make it difficult for them and they’ll find another way: email, phone, or live chat. When they’re done with you, don’t expect stellar reviews.

If there’s one thing you can take away from this experience it’s this: test, monitor, and talk to your customers. Make sure you understand the situation. It’s nearly impossible to design a good service experience first time around. It takes continued refinement to arrive at a solution and it needs to be grounded in qualitative and quantitative analysis:

  • talk to your customers and look for signs of reservation or uncertainty
  • ask clarifying questions to ensure you get to the bottom of each issue
  • check your telemetry data to see how people use your product
  • confirm your findings by conducting in-person or remote usability studies
  • explore side effects of each major decision within the product.

Get the feedback loop right and you may just arrive at a downgrade process that will help you retain the loyalty of your customers. Who knows, it may even lead them back to the upgrade path in the future.


Thanks to @halfcube for keeping my writing on point.