While forecasting can be approached in various ways, it is considerably more complicated for saas companies with usage-based pricing models. Many saas companies fail to leverage their usage-based data points, missing out on valuable insights. Usage-based data can be combined with revenue data to provide accurate forecasts in the following ways:
1. Trend analysis of customer-wise usage- Saas companies can identify trends for each customer/cohort, discover seasonality, and predict future usage. They can combine revenue data with estimated usage and pricing models based on past trends.
2. Predicting potential churn and upselling to customers- Companies can combine past usage data and churned customer information to predict patterns for potential customer churn. This can be combined with different customer characteristics.- It can also determine the optimal time to approach customers with upsell opportunities.
3. Making assumptions for new customers- Based on the size, industry, etc., of new customers, companies can predict their usage and, consequently, revenue.- Companies can also create different what-if scenarios by experimenting with pricing models and usage data.
All of the above can provide a significant number of insights for companies with complex business models. Over time, they can develop a system to automate predictions and leverage the large amount of data they have.
