By Mike Desmarais
Manpower, a leading temporary staffing and employment services company, recently commissioned the Service Quality Measurement Group (SQM) to explore call center performance measures. First Call Resolution (FCR) was among the areas reviewed.
Ask any manager or customer service representative (CSR) what their call center measures are and they will tell you about the traditional operational measures such as service levels, speed of answer, talk time, calls handled by CSR, abandon rates, occupancy rates, call monitoring scores, and so forth. Most call center managers believe that these traditional operating measures are the most important measures for operating an effective and efficient call center. Accordingly, call centers put a lot of time and effort into measuring them. Based on SQM’s 2005 benchmarking study of over 250 leading North American call centers on 150 traditional operational measures, 55 customer satisfaction measures, and 50 employee satisfaction measures, we have concluded that First Call Resolution is the measure that matters most for operating an effective and efficient call center.
Furthermore, the research shows that only 43% of call centers actually measure FCR. Benchmarking data shows that call centers measuring FCR self reported FCR performance at 83%, while the customers of those same call centers report FCR at 67%. The bottom line is there is a big difference between how call center management see FCR and how their customers see FCR. It is very clear that call centers are not effective at measuring and managing FCR.
FCR Business Case: An even more important reason to focus on FCR is the business case. The business case is based on SQM’s call center benchmarking study, which determined four main reasons to focus your call center resources and efforts on FCR:
1) Reduce operating cost – if you are running a 67% FCR rating, which is the call center industry benchmark average, you need to understand that 33% of your total call volume is coming from customers who have to call back because their issue wasn’t resolved the first time. The cost to the call center is enormous.
2) Improve customer satisfaction – for every 1% improvement in FCR, you get a 1% improvement in customer satisfaction. FCR is highly correlated to customer satisfaction. In fact, FCR is the highest correlated measure to customer satisfaction of all the call center measures.
3) Increase opportunities to sell — assuming you are at the benchmark average of a 67% FCR rating, you have an opportunity to increase your cross selling by 33%. The research shows that customers’ needs must be resolved before the CSR has earned the right to move on to any sort of sales activity. If the CSR moves to the cross sell too early, the customer is irritated and feels that the organization is pushing its own needs rather than serving the customer. The fundamental customer relationship is undermined.
4) Improve employee satisfaction – an organization with low FCR often has low employee satisfaction and high turnover. The stress is very high on the employee who handles the second and third call from that customer whose issue wasn’t resolved the first time.
Defining and Measuring FCR: Most call centers are unsure how to define and measure FCR. SQM’s definition of FCR is the “Customer’s inquiry or problem is resolved in one call.” Furthermore, the customer must be the judge of FCR and not call center management. Having the customer be the judge of FCR is the best practice. Call centers can use internal FCR measures, but they are less effective and accurate. As previously mentioned, call centers self reported internal FCR ratings is approximately 20% higher than the customers FCR ratings. In addition to defining FCR, call centers must know how to effectively measure FCR.
Top 10 FCR Best Practices: Only five percent of the call centers in the benchmarking study are at the world class FCR rating of 80% or higher. Achieving 80% or higher FCR rating typically results in an average of 1.2 calls needed to resolve customer’s inquiry or problem. Again, the average call center FCR rating is 67%, resulting in an average of 1.6 calls needed to resolve the customer’s inquiry or problem. As you can see, there is a big difference between a world class performing call center and an average performing call center. Listed below are the top 10 best practices for transforming your call center to a world class FCR call center.
1) Management… is committed to improving FCR and it is viewed as the most important measure.
2) Awareness… all levels of employees are aware of the business case to improve FCR performance.
3) Goals and Accountability… employees at all levels are accountable for achieving FCR goals.
4) Resolution Outcome… CSRs take ownership for resolving their own customer inquiry or problem calls.
5) Two Plus Calls… call center management evaluate source of error for two plus calls.
6) Measurement… FCR is measured frequently, consistently, and is determined by the customer.
7) Coaching… supervisors are trained to coach CSRs on how to improve their FCR performance.
8) Hiring and Turnover… new CSR hires are based on having a predetermined FCR profile and call center management focuses on reducing CSR turnover.
9) Call Flow… customer calls are effectively and efficiently managed (such as call routing, script, and desk top applications) for achieving FCR.
10) Recognition and Incentives… CSRs are recognized frequently for achieving their FCR goals and financial incentives are at least 50% of financial incentive payout.
Conclusion: Traditional call center operational measures are important for operating a call center. However, SQM’s research shows that FCR is the call center measure that matters most because it reduces operating cost, increases opportunities to sell, and improves both employee and customer satisfaction. No call center measure has as much impact on call center performance as FCR. Call centers can use internal FCR measurement methods such as call backs) but they are less effective and accurate compared to external measurement methods (such as a telephone survey). The implementation of Top 10 FCR Best Practices will transform an average FCR call center to a world class FCR call center.
Mike Desmarais is President of SQM Group.
[From Connection Magazine – April 2006]