Estimation question
Estimate the cost savings for an enterprise that resolves 30% of support tickets with Sierra.
- Sierra
- Estimation
- Hard
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What this question tests
Tests structured estimation: building a clean cost model from ticket volume to dollar savings.
How to approach it
- State the assumption you would confirm: the enterprise's total annual ticket volume, assuming 2 million tickets a year for a mid to large company.
- Estimate resolved tickets: 30 percent of 2 million is 600,000 tickets fully handled by Sierra without a human agent.
- Estimate cost per ticket today: assume a blended human agent cost of 6 dollars per ticket, covering wages, tools, and overhead.
- Multiply for gross savings: 600,000 tickets times 6 dollars is 3.6 million dollars a year in avoided human handling cost.
- Net out Sierra's own cost: subtract an assumed Sierra fee, for example 1.50 dollars per resolved ticket, for 900,000 dollars, leaving roughly 2.7 million dollars net savings.
- State this ignores indirect gains like faster resolution improving retention, which you would size separately if asked.
What a strong answer includes
- Shows the full chain clearly: ticket volume times resolution rate times cost per ticket, minus vendor cost, arriving at a specific net number.
- Labels every input as an assumption, for example 2 million tickets and 6 dollars per ticket, so the interviewer can swap in real numbers.
- Sanity checks the answer against Sierra's outcome based pricing model, noting the client only pays for tickets actually resolved.
- Mentions second order effects, like reduced agent attrition or faster resolution lifting CSAT, without inflating the core number with unverified claims.
Common mistakes
- Skipping the resolution rate and cost per ticket assumptions and jumping to a made up final number.
- Ignoring Sierra's own fee, which overstates net savings.
- Not stating that 2 million tickets and 6 dollars per ticket are assumptions rather than facts.
Likely follow-up questions
- How would the savings change for a company with a much lower cost per ticket?
- What would make the 30 percent resolution rate too optimistic or too conservative?
- How would you validate this estimate with real customer data?
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More questions from Sierra
Learn the skill behind it
Chapters of the AI PM course that teach what this question tests.
- Chapter 2: Data fluency: SQL, logs, and reading the truth yourself
- Chapter 9: Prove it paid off: outcomes, economics, and pricing
- Chapter 14: Get the job: the AI PM interview loop