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Forecasting Ecommerce Customer Support: Lessons from Q4 and 2021 Projections

Forecasting

The boom in online shopping in the year 2020 has been massive, largely because Covid-19 has made it more difficult for people to shop offline as they did before. According to a recent economic indicators report from the US Census Bureau, there was an approximately 36.7% increase in U.S. ecommerce growth in Q3 of 2020…

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The boom in online shopping in the year 2020 has been massive, largely because Covid-19 has made it more difficult for people to shop offline as they did before.

According to a recent economic indicators report from the US Census Bureau, there was an approximately 36.7% increase in U.S. ecommerce growth in Q3 of 2020 over the previous year.

Per Adobe Analytics, this year there was a 20.7% increase in sales over the previous year for the week of Black Friday/Cyber Monday (BFCM). Their data for 80 to 100 huge U.S. retail stores showed that consumers spent $34.4 billion during this period. And 41.1% of that revenue was generated via smartphones (up from the previous year by 7.4%). 

BFCM 2020 saw an avalanche of online shopping. In an NBC News report, shippers in the U.S. were expecting such a high volume of shipping this holiday season that they predicted they wouldn’t be able to get it all delivered on time. They anticipated possible delays for up to seven million packages per day from Thanksgiving to Christmas.

Because of these numbers, ecommerce store owners need to project, forecast, and outline what to expect in the new year and determine how to define the future of their ecommerce stores in 2021.

How Much Have Shopping Habits Changed?

Living and shopping habits changed dramatically in 2020 with measures to combat the spread of Covid-19 (like lockdowns, limited in-store shopping, and store closures). These unpredictable changes played a major role in boosting online shopping. Many people opted to shop conveniently and comfortably from their homes for all their necessities (such as groceries and clothes) and gifts (such as jewelry and other holiday presents).

A Shopify report showed that BFCM 2020 worldwide sales increased by 76% compared to last year, and Shopify merchants made a huge $5.1 billion over the BFCM weekend (compared to $2.9 billion over the same period in 2019). 

This trend is not about to change—online shopping continues to be convenient for buyers and also gives people a way to support small businesses that may be in danger of closing. 

With all the sales flowing in, Shopify merchants must focus on keeping their stores running smoothly—from the ordering experience to delivery and customer support—to keep their customers coming back. 

A lot of people look primarily to return on investment (ROI) to measure their success, but to keep customers–even in good times–depends very much on who offers a good return on experience (ROX).

How Do You Measure and Forecast the Customer Support You’ll Need?

It’s possible to measure the customer support during Q4 2020 and use the data for the projection of the year 2021 customer support. You can do this by using data from store analytics to calculate the sales-transaction volume and ticket volume over a certain period of time and then calculating the ticket-volume ratio. 

This data helps you as a store owner to gauge whether there is a need to increase your customer-support personnel for the year ahead to offer support to the increased customer base. 

With the growing number of online sales, ecommerce owners need to anticipate possible delays in shipping and delivery time, hence an increase in tickets that need to be addressed in a timely manner to keep customers happy.

According to customer-support company Gorgias’ 2019 Q4 stats, there was about a 10% increase in conversion rate for stores that replied to tickets within a 10-minute window and up to a 50% increase in conversion rate when customer support answered live-chat questions within a 2-minute time frame. 

The Customer-Support Forecasting Process 

When you know which kind of data to use to make predictions, the forecasting task gets easier. 

Sales transactions and ticket volume can help ecommerce store owners anticipate how busy year 2021 will be and therefore how many customer-support agents will be required. For instance, you can check the number of tickets per every 100 transactions to define the weighted average and guide you when doing calculations, as shown below.

How to calculate your ticket-volume ratio

You can calculate the ticket-volume ratio by using the transaction report found in Shopify or Google analytics. 

  • Using Shopify Analytics to get the transaction count:
  1. Log in to Shopify and click on “Analytics” (in the menu on the left).
  2. When the submenu appears below, select “Reports.”
  3. Under “Reports,” select “Sales Over Time.”
  4. Select your desired date range and group. Then click “Apply.”
  5. The transaction data for the selected time period is now displayed.
  • Using Google Analytics to get the transaction count:
  1. Log in to your Google Analytics account and click “Conversions” (in the menu on the left).
  2. When the submenu appears, click “Ecommerce” and then select “Overview.”
  3. Select your desired date range and click “Save.” 
  4. The transaction data for the selected time period is now displayed in the “Transaction” field.

Note: The numbers from these two sources should be similar, but note that there might be a slight difference because Google Analytics numbers for transaction sales from subscriptions may not have been captured.

How to calculate your tickets

Now you need the number of tickets received so you can calculate the ticket-volume ratio. You’ll need the time period you specified in the customer-support tool above. If you use Gorgias for customer support, use these steps from their interface:

  1. Under “Statistics,” click “Overview.”
  2. Select the same date range you used for your transaction count and click “Apply.” 
  3. The ticket-volume data for the specified time range is now displayed.

What’s next?

With the data you’ve collected, you can now calculate your ticket-volume ratio by dividing the number of tickets by the number of transactions.

For example, say you’ve had 2,000 transactions in the last two months and, during this period, you also received 500 tickets.

Using this formula, you’ve determined that you have a ticket-volume ratio of 25% (or 25 tickets per 100 sales transactions).

Projecting Your Ticket Volume 

Now that you know how to obtain the ticket-volume ratio, use it to your advantage.

Using revenue, media spend projections, or real data, calculate your Q4 ticket-volume ratio, which you will use for your 2021 customer-support projection. Using that number and the formula above, calculate the expected number of tickets you’ll receive. Now find the average number of tickets solved per agent by day to determine whether to increase the number of customer-support agents you have during this time period.

For instance, if you have an average order value of $100 and your Q4 revenue is around $800,000, you would expect to have a total of 8,000 orders. Using the ticket-volume ratio of 25 tickets per 100 transactions that you found above, you can calculate the average number of expected tickets during this sales period.

In this case, this store expected to receive 2,000 tickets during Q4.

What action should you take?

If you expect 2,000 tickets during this time period, you must next determine the “healthiest” number of customer-support agents you’ll need to have, while also taking into account the response time (ideally two minutes for a live chat, as mentioned above). There are two ways to go about this: (1) reduce the number of tickets you receive and/or (2) hire more customer-support agents.

1. Update the FAQ page

The best way to reduce the number of tickets coming through your store is to query your customer-support agents. Have them keep a list of frequently asked questions that come in via live chat. Using this information, add the most-requested information to the store’s FAQ section as long as they are general questions. For specific questions (like about product size or type), you can choose to add this information to the product page for that specific product.

2. Increase the number of customer-support agents

If updating the FAQ page doesn’t apply to you or you find that no matter what information is available in the store, customers prefer to ask customer support because it’s the easiest way to get the information they need, your only solution is to consider increasing the number of customer-support agents you have.

How Many Customer-Support Agents Do You Really Need?

Because of the large number of online sales projected (due largely to Covid-19) and because you may experience shipment delays and later-than-promised deliveries (shipping companies are battling increased orders as well!), ecommerce merchants must ensure they are well-prepared for a steady flow of projected 2021 sales.

To take the next step toward calculating how many agents you need, you’ll need data from the customer-support company you use (if you use one) to determine how many tickets a full-time agent fulfills per day.

If you use Gorgias, you can follow the steps below to get the number of tickets closed per agent in a given time.

  1. Click “Statistics” (in the menu on the left) and then select “Agents.” 
  2. Select a date range of one month.
  3. The number of tickets closed per agent in that month is displayed.

There will be a huge variation depending on the number of transactions, your customer-support agents, and the methods you’ve put in place to handle customer-support queries.

Let’s say that one agent tackles 30 tickets per day on Monday to Friday and you project that you’ll have 2,000 tickets in the first months of 2021.

The result above shows that each agent closes about 645 tickets per month. You can now use this number. Divide the number of tickets by the number of months in a given quarter. Then divide the result by the number of tickets completed by an agent in a month. This will yield the number of agents you’ll require.

The two examples above reflect different projected numbers of orders. A projection of 2,000 tickets in one quarter only requires one agent to handle the support issues without any problem. A larger order projection (6,000) calls for multiple customer-support agents. In this case, processing 6,000 tickets in the next quarter requires three agents, so you’ll need to consider hiring two more full-time agents.

What Factors Might Affect the Ticket-Volume Ratio?

You’ve calculated your projected numbers, but keep in mind that several factors can affect the ticket-volume ratio by increasing the number of tickets you receive:

  • Delayed shipments
  • Order backlogs
  • Running out of stock
  • Sales and promotions
  • Missing information on the product and FAQ pages. 

And, for now, Covid-19 is another factor as new measures are rolled out and/or as uncertainty persists. 

All of these can have a huge effect on a store’s ticket-volume ratio and, therefore, on revenue; if tickets pile up, customers may not get a timely response and could end up canceling orders. To avoid problems with projections, store owners need to have their support agents handle all support queries on time and—if there are issues that cannot be solved on the go—should inform customers about the delay rather than remain silent. 

Conclusion: The Future of Ecommerce and Customer Support

The future is bright for ecommerce and customer support, but there’s some concern voiced that customer-support agents may lose their jobs if/when artificial intelligence (AI) changes how that support is handled. This is not necessarily true. 

AI will definitely simplify the process. It will improve how customer support is carried out by feeding smart machines with real-life data scenarios and training them to respond. At some point, AI will definitely be able to perform the role of a customer-support agent such as responding to customer queries in a timely manner (since the machine doesn’t need time off). 

On the other hand, while it will take care of simple customer-support tasks, AI will leave the complex questions for customer-support agents to handle.

With video communication becoming the norm these days, the need for face-to-face customer support through video-conferencing tools like Zoom will be on the rise. According to Hubspot, face-to-face Zoom contact can boost trust between the customer and the brand, and consumers will come to expect it.

Resources

Abramovich, G. (2020). A record-breaking cyber week 2020: Online shopping steals the show, Trends & Research, Adobe blog.

Messenger, H. (2020). FedEx, UPS face “shipageddon” with potential shortfall of seven million packages a day over holiday season. NBC News.

Redbord, M. (2020). 14 ways technology will affect the future of customer service. HubSpot.

Tucker, J. (2020). Forecast customer service for Q4 and beyond. Gorgias blog.

U.S. Department of Commerce. (2020). Quarterly retail ecommerce sales: Third quarter 2020, U.S. Census Bureau News

Irene Wanja

Irene Wanja is in charge of analyzing usability data at BGS. She spends her time with your content applying her understanding of how users interact to improving user experience, which is her specialty. She is passionate about software and technology and loves working on clients' businesses to improve clarity, efficiency, and user satisfaction.

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