Definition
Usage forecast is a projection of customer usage over time, used to design tiers, commitments, and pricing guardrails.
Why it matters
Forecasts help you size included usage and predict cost exposure. Without a forecast, tier design becomes guesswork.
Pricing implications
If forecasts show heavy usage growth, you need tiered pricing or minimums to protect margins. If growth is modest, you can keep pricing simple.
Measurement tips
Use cohort data and recent usage trends, then model p50 and p90 scenarios.
Checklist
- Use cohort-based usage trends.
- Model p50 and p90 usage scenarios.
- Separate base usage from seasonal spikes.
- Update forecasts quarterly.
- Validate forecasts with actual billing data.
- Use forecasts to set tier breakpoints.
- Document forecast assumptions.
- Tie forecast ranges to pricing decisions.