Calculating Your Critical Mass of Pilot Customers

 In Chat Center Startup

So you want to quickly start your Live Chat Service by acquiring a group of pilot customers as soon as possible. The first question you may ask yourself is: How do I stay afloat? But to thoroughly answer this question, you must first ask yourself another question: What numbers should I be after?

The first critical number relies on discovering when target consumers are online. The best route: Check your Google Analytics. But first, you need understand Web traffic in your particular sector. Ninety-five percent of all traffic is between 9 a.m. and 11 p.m. So offering services accordingly will allow you to reach the vast majority of your prospective clients. But, to be honest, that’s a lot of hourly coverage – roughly 400 hours a month – which is quite expensive to staff and raises the bar on your critical mass.

A great alternative could be offering your services initially during evening and weekend hours, drastically reducing your operating hours and making yourself a commodity as one of the few options in the space at that particular time. Weekdays from 5 p.m. to 11 p.m. and weekends from 9 a.m. till 11 p.m. add up to 250 hours a month. But, of course, this approach also reduces reach to 55 percent.

The second critical number involves your chat percentage. Let´s say your average agent wage rounds out to $10 an hour. This equates your monthly agent pay to $2,500. The other variable in this equation is website traffic. A safe bet would be a 1-percent conversion rate on unique website visitor-to-chat conversions. So to break it down, 1,000 website visitors would result in 55 chats. Lost yet? It will all come together soon. Remember, we only cover 55 percent of all website traffic, so the original 1,000 is reduced to 550 visitors at a 1-percent visitor-to-chat conversion rate, equaling 55 chats per 1,000 gross visitors. Voila! We have our second critical number.

Now, when talking to your prospects, your key interest is finding traffic numbers. These numbers directly translate their weight in your pilot-group assembly. So, to round out this break-even revenue calculation example, you have to set your average sales price per chat. Let’s assume you’re charging $5 per chat – and there it is, your third critical number.

Now, let’s do some serious math.

Begin with your initial costs: add your $2,500 per month agent cost to your project manager’s fee of $3,000 per month. Don’t forget these numbers are up to you; you can consequently set this bar as high or low as you want. Within this calculation, you may also consider transferring your acquisition costs – the money you spent over the first three months acquiring your pilot customers.

So total cost of a six-month pilot period would be: $2,500 plus $3,000 multiplied by six, equaling $33.000.

This means you would need $5,500 in monthly revenue to maintain for the first six months. So if chats are packaged at $5, your team would need to average 1,100 chats on a monthly basis to hit this number. Which, consequently, means you will need to onboard a group of pilot customers with a total of 200,000 visitors per month.

For the workforce planners who may be asking themselves: Can this be handled by one agent at a time? The short answer: absolutely. But that’s another topic for another time. If you succeed to reach this goal in three months, or even four, you will have laid a strong foundation for a successful business. Then you can start focusing on the chat delivery process.

Want to do the math yourself? Here’s our Chat Center pilot phase critical mass calculator.

Feel free to duplicate the spreadsheet for your own use (only works if google-logged in). Or download the .xls file