No matter what professional role we lead in life, we’ve all been a customer at one point in time. Reflecting on our customer experiences can be a valuable tool in the analysis and betterment of customer service operations.
Chances are, you’ve probably found yourself in one of these situations:
- You contacted customer service, but the call or chat ended before your issue was resolved. [doh!]
- You got off a customer service contact feeling unsure if your issue was resolved. [dread!]
- You thought our issue was resolved, but it reappeared 3 days after. [drat!]
Looking back, what did you do? What was your response to the unresolved service issue? Chances are you contacted the brand again, tried other channels, vented on social media, or even switched brands for good.
And it wasn’t just frustrating for you… It was also frustrating for the agents you spoke with – and it was exponentially costly for the brand. By now, you can start to imagine how focussing on First Contact Resolution (FCR) may have benefited all parties.
Looking at service touchpoints through the eyes of your customer helps to understand deficiencies in service processes – and the reasons why FCR was not achieved.
When we contact brands, we expect FCR regardless of the complexity of our issue, what channel we use, or who we deal with. And if our service strategy strives for FCR and continually measure against it, we’ll begin to see some amazing results
FCR Definition & Importance
FCR is self-explanatory: It measures a brand’s ability to resolve customers’ issues the first time they contacted, with no need for follow-up. It’s a widely accepted KPI that provides a balanced view of a contact centre’s performance, from both a quality and cost perspective.
Here are a few reasons why you should strive for FCR:
(1) Reduce Operating Costs
FCR improvements drive down your contact centre’s operating costs and improve its efficiency.
Let’s say you have 100 agents that handled 1M contacts at $5 per contact on year 1. If your FCR was 60%, that meant you handled 600K unique contacts at a cost of $3M. That also meant that up to 40% of your volume are ‘re-contacts’ – your agents handled 400K repeats at a cost of $2M on year 1.
Now let’s say that, all things being equal, you slashed 100K repeats on year 2. FCR improved from 60% (year 1) to 67% (year 2).
This time, your agents only handled 300K repeats at a cost $1.5M on year 2 – a whopping $0.5M in cost savings compared to year 1! And you probably need fewer agents than the 100 you currently have in order to handle the decreasing volume.
(2) Improve Customer Satisfaction (CSAT)
FCR is very strongly correlated with CSAT. If your customers had to contact you 3X to resolve an issue, then CSAT is likely to be lower than when they only had to contact you once.
(3) Improve Loyalty/Reduce Churn
FCR is the biggest lever that service leaders can pull to improve loyalty, reduce churn, and add value to the organization. Customers who didn’t get their issues resolved at first contact are more likely to switch to competitors due to a poor service experience.
(4) Improve Sales Opportunities
FCR increases customers’ cross- or up-sell acceptance rate. In service interactions, agents must resolve issues first before they even earn the right to move on to any type of sales activity. Those who attempt to sell before issues are resolved are likely to irritate customers and undermine their brand’s relationship with said customers.
(5) Improve Employee Satisfaction (ESAT)
Contact centres with high FCR tend to have high ESAT, and vice versa. Agents that handle subsequent contacts from customers with unresolved issues tend to have high stress levels and low morale. Yes, high ESAT leads to better CSAT/FCR… But the door swings both ways in that high CSAT/FCR leads to better ESAT.
Most service leaders struggle to effectively measure FCR. Some contact centres still use measurements based on quality assurance (QA) reviews or some form of repeat contact analysis.
Don’t get me wrong: They can be good sources of directional information, but not really the ‘best’ for measuring FCR. Service leaders shouldn’t rely solely on these methods as they tend to provide a skewed view of FCR.
|QA analysts review recordings of interactions to determine if issues were resolved||Ability to leverage internal ‘process’ knowledge, e.g., QA identifies if agents provided the appropriate resolution||FCR that’s based only on the organization’s perspective, not the customer’s
Skewed FCR – QA tends to review shorter interactions to meet review quotas, or focus only on contacts at hand due to the labour-intensiveness of tracing and reviewing previous contacts
|Repeat contact analysis uses contact data (e.g., phone number, IP address, etc.) to track if customers made a repeat contact within a given period||All contacts are tracked, e.g., Within a 5-day period, 30% of calls were from customers whose phone numbers appear to have contacted more than once.||Skewed FCR – Customers may re-contact about a different issue, or they don’t re-contact at all even if their issue was unresolved. Channel-switching can also skew FCR if the contact centre is unable to track the same customer across various contact channels.|
The best way to measure FCR is to let your customers determine if their issue was resolved, and how many contacts it took them to resolve, using direct customer feedback in the form of Voice of the Customer (VOC) surveys.
This is arguably the most customer-centric method to measure FCR because it looks at issue resolution from the customer’s eyes, not the organization’s.
Within a few hours after the service interaction, a contact centre can trigger a VOC survey via email or SMS. Wordings may vary slightly, but the survey must contain these two questions:
- Issue Resolution: Was your issue resolved during your most recent interaction? (Yes, No, Not sure)
- # of Contacts: Including your most recent interaction, how many contacts did you make to resolve your issue? (1, 2, 3 or more)
Customers must answer ‘Yes’ to the Issue Resolution question and ‘1’ to the # of Contacts question for the contact to be categorised as ‘resolved at first contact’. FCR is calculated as the number of ‘resolved at first contact’ responses divided by the total number of responses.
Ideally, this VOC-based FCR is supplemented with insights from a contact centre’s QA reviews, and repeat contact analysis to provide a more holistic view.
FCR Improvement Tips
To improve FCR, you need to baseline your current performance, identify root causes, develop smart goals, and put an action plan in place.
- Baseline your FCR: The first step is to know how well you’re doing now. A baseline FCR allows you to measure your performance through time against a consistent yardstick. Let your customers determine if their issue was resolved, and how many contacts it took them to resolve, by using a VOC-based FCR.
- Identify root causes: Knowing what’s driving non-resolution at first contact is half the battle. Be careful not to solve for symptoms of the problem! Get to the true root causes and identify those within your gift to fix. Knowing your root causes allows you to identify the right actions to address them.
- Prioritise actions and define FCR goal: Your steering committee should prioritise actions based on their cost, complexity to implement, and impact. The committee should also help define and agree on an achievable and realistic FCR goal.
- Implement your action plan(s)
- Maximise your impact: Incentives encourage agents to work harder to resolve issues the first time. Performance management plans keep them on their toes, especially those who consistently fall short of expectations.
- Track FCR performance continuously: Use a VOC-based FCR measure to track your performance – this should be your one source of truth. Supplement it with insights from your contact centre’s QA reviews and repeat contact analysis to provide a more holistic view of FCR.
- Measure FCR across various channels: A high FCR on phone calls, but a low FCR on chats, does not a good overall FCR make. Make sure you’re measuring across all contact channels as customers don’t just get in touch with you over the phone. They’re available across multiple channels like chat, email, social media, etc.