The Journey: #35 Decision to Downsell

Customer Success has always been about helping customers realize value: understand the use cases, configure the solution, drive adoption, and tie it all back to ROI. The logic is clear, if customers see value, they’ll stay and grow.

But here’s the hard truth I learned early in my career: sometimes customers don’t want more. Sometimes they want less. And the way you handle those moments can define whether you keep the customer at all.

When Downsells Weren’t an Option

At one of my early CS roles, the company’s stance on retention was simple: no downsells. If a customer needed fewer licenses or wanted to reduce their spend, our job was to reshuffle their package, swap products, or otherwise mask the reduction. The guiding principle was:

“If customers aren’t growing, they’re dying.”

In practice, that meant current contract value became the “low watermark.” No matter what happened, we weren’t allowed to go below it. On paper, this preserved revenue. In reality, it often backed customers into a corner.

A Pandemic Shift

Then came 2020. Entire industries, hospitality, travel, entertainment, were in freefall. For the first time, many companies were forced to show empathy. Retention became less about holding the line and more about meeting customers where they were.

We designed flexible paths forward: temporary reductions, creative restructuring, and short-term accommodations that ensured our customers could survive the storm.

That experience rewired my approach to retention.

Flexibility as Strategy

In today’s volatile market, shifting economies, constant innovation, and endless competition, I’ve adopted flexibility as part of my retention playbook.

Not every renewal is going to be a growth story. Some will renew flat. Some will contract. And yes, some will churn. But by building options into my strategy, I’ve saved more customers from leaving altogether and kept doors open for growth when conditions improve.

Retention is no longer just about hitting a revenue number. It’s about preserving the relationship long enough for the revenue to come back.

5 Questions I Ask Before Approving a Downsell

When a customer asks to downsize, I don’t automatically say yes. I step back and evaluate:

Business Context: Is this reduction temporary (economic conditions, budget cycle) or permanent (no real need for the product)?

Solution Fit: Are they using only a fraction of the solution, or was there a misalignment in the sales cycle?

Adoption Data: Does usage reflect their request? Sometimes downsizing matches reality, not risk.

Strategic Value: Do we still align with their long-term goals, even at a smaller footprint?

Future Potential: Is there a clear path to growth when their situation changes? Downsizing may simply be a bridge to expansion later.

Here’s the perspective I share with my teams:

A customer at $80K is far better than a churned customer at $100K.

Flexibility doesn’t weaken your retention strategy. It strengthens it by preserving relationships, maintaining trust, and ensuring there’s still a customer to grow with tomorrow.

Sometimes the smartest retention move you can make is to say yes to less.