First Call Resolution: Your Number One Metric

This article was originally published on the fonolo Customer Service Blog on March 5, 2013.

Your mission: Keep customer service costs low while keeping customer satisfaction high. Can it be done?  

Many contact center managers panic and reduce their number of agents to meet short-term financial goals. When budgets increase, these same managers go on a hiring frenzy in an attempt to re-engage lost customers and increase the loyalty of existing customers.

This stop and go approach to center management can temporarily reduce operational costs, but it also significantly reduces customer satisfaction. A better way to approach the issue of center profitability is to put more focus on taking care of the customer’s issue during the first call. Improving first call resolution (FCR) not only impacts the cost of operations, but simultaneously affects customer satisfaction and retention. (More on FCR from Shai Berger here )

By improving FCR and reducing the total volume of repeat calls, you can significantly lower service time and the overall cost to serve the customer. From a customer’s perspective, improved FCR translates directly to higher customer satisfaction which ultimately impacts the bottom line by boosting customer loyalty and revenues. As a matter of fact, having the issue resolved on the first call has been cited in many studies as being the number one driver of customer satisfaction.

Need proof? According to the Yankee Group , 30% to 35% of calls coming into the average center are repeat customer calls that require expensive “rework” by customer service representatives.

What does this mean to you? Start with your cost per call. If you’re not sure what that is, use $5-$10 for a basic customer service inquiry and $20-$45 for a Level 1 technical support issue. Multiply that by the number of your repeat calls. If you don’t currently measure, use 30-35% of your total calls. Calculate what the operational savings would be if you improved resolution rates by only 10%

As an example, let’s say a call center gets 100,000 calls per month. If the cost per call is $10, and 30% of calls are repeat calls, the cost of the repeat calls is $300,000 per month. A mere 10% reduction would yield a savings of $30,000 per month or $360,000 per year. Make the cost of a call $25, and the annual savings would be $900,000.

MetricNet’s benchmarking studies indicate that first call resolution is the single biggest driver of customer satisfaction. If you want loyal customers, you need to have customer satisfaction ranking in the 90′s and MetricNet’s studies across all industries show that in order to have satisfaction rates this high, first-call resolution rates must match.

Studies reveal caller satisfaction ratings will be 5-10% lower when a second call is made for the same issue. What would it mean to your company if you could improve your customer satisfaction ratings? Here are some facts that will get you thinking about the answer.

Not sure this can be done? MetricNet reports that call centers that emphasize training (i.e., lots of training hours for new and veteran agents) generally enjoy a higher than average FCR. Check out Motorola and Altitude Software . These two companies recently improved their call resolution rates while simultaneously increasing customer satisfaction. With commitment from the top and a modest investment, you can do it too.

And if you have a complex situation where first call resolution isn’t realistic, just reducing the time to resolution can make a big difference. Industry Week reported on a large automotive manufacturer trying to increase market share in a new market by establishing a strong brand name and a superior customer service reputation. They wanted to deliver high quality service coupled with quick resolution of customer issues. One of their biggest challenges in achieving their goal of superior customer service was the time dedicated to warranty claims resolution. Once the issue was addressed, claims resolution time went from 174 days to 52 days. Warranty costs were reduced by 34% and customer satisfaction sky rocketed.

How do you improve first call resolution?

Unfortunately, there’s no silver bullet. You need to focus on three areas: people, process, and product.

People

In order to speed call resolution rates, be sure your agents have good listening skills, are focused on solving the right problem, and employ top-notch troubleshooting skills. They need to sound confident, anticipate related questions that the customer might have, and follow-through on the commitments they make to the customer.

Process

Sit with agents and watch them handle calls. They need to have information at their fingertips if they’re going to resolve issues on the first call. That could be as simple as a binder with procedures in it or as complex as an online knowledge base. Look at the accuracy of the information they’re giving callers. For example, are agents saying the product will arrive in 5-7 days when shipping has changed procedures and it’s now 7-10? Can you give agents the authority to handle basic issues-like authorizing returns up to a certain dollar limit-in order to avoid escalating or returning the call?

Product

Are you having quality issues? Is something continuing to fail time and time again? Are people calling back about the same failure issue? If so, what can you do to fix it?

Listen to the types of complaints that are driving repeat calls and examine your people, processes, and product to see what you can do to improve first call resolution.