By Stephanie Ventura

Metrics tracking is a vital element of every call center. However, aiming to track all possible call center metrics can lead to information overload. Instead, organizations must focus on metrics that yield the greatest insight. Many call center leaders cite First Call Resolution (FCR) as the most important metric to track.

Why is FCR considered so essential? FCR has strong links to customer satisfaction, service efficiency, and service costs.

Research firm Frost and Sullivan calls First Call Resolution the “home run” of call center metrics. The reason? It is the only performance metric that “has an effect on almost every other meaningful statistic and measurement in the call center.”

Today’s call centers must balance many priorities while maintaining an intense focus on customers. As McKinsey & Company explains:

The contact center. . . must now focus on achieving performance excellence across all three key priorities: customer experience, cost optimization, and revenue maximization.

—McKinsey & Company

To use FCR in your call center effectively, you need to understand more about what it is and how to calculate it. You also need to know why First Call Resolution is important, along with standard benchmarks and emerging FCR trends. 

What is First Call Resolution?

Every call center professional has heard the acronym FCR, but what does it mean?  In essence, First Call Resolution is the ability to resolve customer issues on the first attempt, with no follow-up needed. As ICMI notes, FCR is a critical call center metric for gauging business performance:

FCR is a measure of how effectively your contact center conducts its business and is a function of many factors, including the complexity and types of transactions handled, the experience of your agents, the quality of agent training, and tools such as knowledge management and remote control. The metric is most often measured monthly because a monthly timeframe is long enough to provide statistical significance. But it can also be measured annually, weekly, daily, or even hourly.

—International Customer Management Institute (ICMI)

How Do I Measure My First Call Resolution?

According to a recent study, 60% of contact center respondents affirmed that they use FCR. Despite this widespread adoption, there is not one industry-standard way to collect data.

how to measure first contact resolution graph
Source: Call Centre Helper webinar: Improving First Contact Resolution

At first glance, it seems that a system-based approach would produce accurate results. While organizations can use call transfer and callback data to gauge their First Call Resolution, this method has limitations.

For example, imagine that a CRM system notes only a customer’s home number. What happens when the customer calls from a mobile or work number? The system may not track the customer’s follow-up call as a repeat call.

Also, a customer could call back within a few days with a different question not tied to their original call. Both of these common scenarios can skew an organization’s FCR analysis.

In some cases, agents have ownership of marking a ticket resolved. During a call, they ask customers questions like “Did we solve your problem today?” Alternatively, closing a ticket can be based on the agent’s judgment. In these cases, organizations should perform periodic audits to ensure accurate reporting.

Organizations may also use call quality monitoring for FCR data gathering. This can occur in conjunction with agent input or on a stand-alone basis.

Another common approach is collecting customer input during a post-interaction survey. With this method, companies use a question to ask customers if their issues were resolved.

How to Calculate First Call Resolution

Once you have chosen a data-gathering method, you must decide how you will calculate FCR. There are two conventional approaches used.

The first assesses all calls resolved on the first attempt and total calls received.

equation to calculate FCR

While this can be simply from a data collection perspective, it is not always the most accurate. If you are looking at FCR over the short-term, this can give you solid perspective on team performance.

The second FCR calculation can offer a more accurate picture of your FCR.

calculation: calls resolved divided by first calls

This approach only looks at first calls, not all calls. It may take more work to extract this data, but the results are meaningful.

Within the call center industry, both approaches are valid ways to calculate FCR. You can choose the path that makes the best sense for your organization. However, you must make sure to explain your calculation method internally. That allows team members and executives to understand the meaning behind your numbers.

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Measure First Call/Contact Resolution with Journey Analytics 

As customers increasingly interact with businesses across multiple channels, organizations are shifting to measuring First Contact Resolution instead of First Call Resolution. This is because the first contact may happen through webchat, mobile app, email or IVR—any self-serve channel instead of the call center, and it is equally important to measure whether customer issues are getting resolved on these first instances of contact.

Customer behaviors vary across different channels. Contact centers today have data to determine the aggregate customer movement, but not nearly enough insights into cross-channel customer journeys.

In order to measure First Contact Resolution, you need to have a view of the complete customer journey across multiple channels. Customer journey analytics is the best way modern enterprises are measuring cross-channel customer journeys today.

Integrate Structured Data with Unstructured Data 

Advanced customer journey analytics platforms integrate structured customer interaction data from your website, CRM system and other sources with your unstructured data from IVR systems, web chat transcripts, audio call recordings etc. This process is done rapidly and relatively easily without first requiring customer identity matching, schema setup or fixed field mapping for different data types.

Track Contact Resolution on Every Service Channel

Once you have brought together interaction data across every channel, it is easy to track where customers are reaching out for help and whether those issues are getting resolved. This is because every event is captured in a journey analytics platform along with underlying attributes related to the event. For instance, if a customer made a call to the help center, the product for which they called, the agent to which they spoke, the steps they took on conclusion of the call and more would all be captured in the customer journey.

Use Case: How a Retail Bank Uses Journey Analytics to Track FCR Across Service Channels

A retail bank uses a customer journey analytics platform to track contact resolution on every service channel. Over a three year period, about 10 million credit card customers who missed a payment were levied a late fee. To resolve this late fee, the customers reach out to the bank.

illustration of care call journeys
A retail bank uses Pointillist to track contact resolution across service channels.

The customer experience team knows that increasingly customers are using self-service channels to resolve their problems as they are faster and more convenient. They quickly discover that over 650k customers used the website chat assistance to resolve the late payment and over 230k customers turned to their bank mobile apps for help.

Next, the team performs an analysis to see how many of these customers returned for a second interaction on the same issue, thereby making it easy to calculate the number of contacts that were resolved in the first instance.

Discover Deeper Insights to Improve Service Channels

Discovering cross-channel journeys yields valuable insights such as where the first contact originated from, the intent of the contact, and the efficacy of customer service channel in resolving it.

In addition to calculating First Contact Resolution, customer journey analytics platforms can help you learn the following:

  • What task was the customer trying to accomplish?
  • How many customers took that path?
  • What percentage of customers who took that path eventually churned?
  • The revenue impact of the churn

These insights help you target your CX investments to maximize ROI and improve customer satisfaction.

Why is First Call Resolution So Important?

With all the possible ways of viewing call center performance, why does FCR stand out? It is a clear way at looking at a call center interaction through your customers’ eyes. Most people do not enjoy making repeated contacts to address issues. They want calls handled the right way the first time they reach out.

As self-service becomes the norm, this desire for prompt issue resolution is growing. Customers often try to address concerns on their own first, as Forrester affirms:

Today, customers resolve straightforward customer service interactions via self-service, leaving complex issues like account closure, booking a complex multi-city set of flights, or an explanation of smart metering billing policies for a phone conversation. These questions often take longer to resolve and are opportunities to build positive customer relationships with an end goal of increased customer retention.

—Forrester

What does this mean for your call center? You need to recognize that customers view contact with a service center as an escalation. Also, you need highly-skilled and well-trained agents with access to strong knowledge bases to handle growing numbers of complex customer concerns.

Call centers that embrace this reality can more easily meet their customers’ expectations. In fact, global research reveals that customers do want first call resolution.  That study found that “getting my issue resolved in a single interaction” was the most important aspect of a good service experience.

FCR Drives Improvement in Other Business Metrics  

When organizations improve FCR, they often see upticks in other core metrics. FCR has clear links to customer satisfaction, operational costs, revenue and churn.

Customer Satisfaction

Since customers want and expect issues to be resolved on the first call, improving FCR can enhance customer perceptions of your brand. Research from SQM Group found a 1:1 correlation between FCR and customer satisfaction (CSAT) scores. That means for every 1% increase in FCR, companies can anticipate a 1% increase in CSAT.

A global benchmarking study from MetricNet also affirmed the strong correlation between FCR and CSAT. 

graph of customer satisfaction vs call resolution rate
The cause-and-effect relationship between first contact resolution rate and customer satisfaction shown in the chart above uses MetricNet benchmarking data from 2016. Source: 2017 HDI Metric of the Month.

Operational Costs

Call centers that focus on improving FCR typically see declines in repeat calls. Solving an issue on the first call eliminates rework and frees agents up to focus on other customer-facing tasks.

According to Frost & Sullivan, companies that improve FCR can see sharp reductions in repeat call volumes. The firm’s research found that a 15% improvement in FCR leads to a 57% drop in repeat call numbers.

Still, small FCR gains can make a measurable difference. Consider a scenario where a center has 500 agents each taking 100 calls per day, with a 70% FCR rate. Assume 20 work days per month and a cost per call of $5.00.

That equates to 50,000 calls each day, with a daily operational cost of $250,000. With a 70% FCR rate, that means the organization loses $75,000 each day due to open issues. In a year, that leads to $18 million in additional call center cost.

A mere one percent gain in FCR recovers $15,000 per month and $180,000 per year. Each additional FCR percentage point increase nets additional savings.

Customer Churn

Across a decade of customer research, Accenture has found that FCR is a significant issue for customers. A lack of first call resolution has been the top frustration for customers year after year.

What happens when companies don’t resolve customer issues on the first attempt? Many will defect to competitors, according to Accenture’s research. Eighty percent (80%) of customers who shifted loyalties said they would have stayed if their issue was resolved on the first contact.

Sales Opportunities

When agents resolve customer issues on the first attempt, customers feel good about the interaction. In fact, customers may be open to making additional purchases. SQM Group research found that after agents resolve concerns, customers’ cross-selling acceptance rate increases by 20%.

What is a Good First Call Resolution Rate?

First Call Resolution rates vary for several reasons, such as industry, the function of the call center, and time of the year. Still, global research has revealed a  standard benchmark for FCR of 70% to 75%.  

Another global study has found that FCR can range from 41% to 90%. What is the reason for the wide variance in FCR rates? At the lower end of the scale are call centers that perform log and dispatch functions.

Higher-performing centers have skilled team members with access to deep knowledge bases. This gives agents the ability to resolve a wide range of customer issues on the first attempt.

In Conclusion

When identifying call center metrics to monitor, First Call Resolution should be at the top of your list. With FCR, you gain valuable insight into how customers perceive your organization. You can see whether you are resolving concerns or causing unwanted frustrations.

FCR also affects other critical call center metrics. Improvements in FCR have proven correlations to gains in operational costs, churn and sales.

To measure FCR, you must define a clear data collection and calculation approach. You can look to industry-standard benchmarks as a guide, but keep an eye on emerging trends.

Modern enterprises are now viewing each customer interaction within the broader context of the customer journey and focusing on first contact resolution instead of first call resolution. These companies are successfully employing customer journey analytics to not only calculate FCR but also to make CX improvements and to make effective customer engagement decisions at every touchpoint.

demo of customer journey analytics