First Call Resolution Revisited

By Rosanne D'Ausilio, Ph.D.

April 2009

We all know first call resolution (FCR), also know as "one and done," is the number one driver for customer satisfaction, with best practices reported at 86 percent.  However, this means that 14 percent of your customers are contacting you more than once (often more than two or three times) to resolve their issues.

According to a recent Yankee Group study, 30 to 35 percent of calls coming into the average center are unnecessary repeat calls.  Additionally, their research indicates that two-thirds of a center's costs can be attributed to callbacks on issue rework efforts.  Customer Relationship Metrics' research reports that caller satisfaction ratings are 35 to 45 percent lower when a second call is made on the same issue.

Yet another study conducted by the Service Quality Measurement Group reported that for each percentage of improvement in FCR, you get a percentage of improvement in customer satisfaction.  Additionally, if a customer's inquiry or problem was resolved in the first call, only 3 percent of those customers were at risk of going to a competitor.  On the other hand, 34 percent of customers who didn't get their inquiry or problem resolved were likely to go to a competitor.  What does losing that customer cost?

The challenge still exists today as to how to define and then measure FCR accurately, effectively, and efficiently.  There is really no consistent process to measure this critically important KPI (key performance indicator) because defining and measuring FCR is open for interpretation. 

Some centers allow agents to determine if customers' issues were resolved on first contact.  The problem here is that this is completely subjective.  Other centers use their QA people to decide whether calls were resolved on first contact.  However, this method is based on a random sampling and doesn't reflect a complete picture.  Still other centers use post-call surveys that directly ask the customer whether their issue was resolved on the first contact.

The best way to determine the question of resolution is to ask the customer.  Many technical programs, measurements, and other techniques provide data that may be useful for internal purposes, but it's the customer's perception that matters. 

Here are some questions to ask yourself:

• What percentage of your customers' concerns or questions are handled on first contact?

• How frequently do your customers contact you?

• Do you identify repeat calls?

• Can you segment responses by the type of call?

• Do you ask your customers if their concerns were resolved and how many contacts the resolution required?

Please note that some centers report 90 to 95 percent FCR rates, yet when FCR is that high, it raises a red flag.  Perhaps these calls being resolved shouldn't be handled by phone in the first place.  By placing those calls on a self-service website or into FAQs, what is left are the more complex calls, and FCR rates on those calls will be more accurate.

The next question to ask is what calls are not resolved on first contact?  Determine the root causes, and then address those accordingly.  Ascertain if it is a training issue, a software or hardware matter, or a workflow problem.  Be sure to include your agents in any discussion; because they are the main point of contact, they truly know your customers.

The results are clear, however.  FCR has a direct impact on:

• Decreasing costs

• Reducing unnecessary callbacks

• Increasing customer satisfaction - both internal and external

• Enhancing up-sell and cross-sell opportunities

• Moving customers from satisfied to loyal

So how do you define FCR?  ICMI (International Customer Management Institute) defines it as "the percentage of initial calls that do not require any further contacts to address the customer's reason for calling."  If you have a website, and a customer attempts to use self-service and is unable to find what they want, or they find it and don't trust it and escalate to a phone call, is that FCR?  Two points of contact have been made, one to the site and one on the phone. 

There is no right or wrong answer to this question.  What is important is consistency.  If you measure each touch point a customer uses to contact you, then that is your measurement.  If you use only phone contact, then this is what you measure. 

My suggestion is to set up a baseline measurement and then benchmark against it.  Don't concern yourself with what other companies are doing; more importantly, be consistent in what you are doing. Take your measurements every three months, and then tweak what needs tweaking.

While KPIs have been the norm for measuring the overall performance of centers, there seems to be a shift towards measuring customers' perception.  If you want to know how you're doing, ask your customers - don't just rely on metrics.  It's the customer's perceptions, not your numbers, that make the difference.

Rosanne D'Ausilio, Ph.D., an industrial psychologist, consultant, master trainer, best-selling author, executive coach, customer service expert, and president of Human Technologies Global, Inc., specializes in human performance management.  Rosanne is also a certified call center benchmarking auditor through Purdue University's Center for Customer Driven Quality.  Contact her at 845-228-6165 or rosanne@human-technologies.com.