7.
Voice Menu. The customer is asked in the voice menu if this is the first call they have made for their inquiry or problem.
The best approach for measuring FCR/call resolution is to measure from the CSR to the Vice President (VP) level. SQM clients who have experienced the most FCR/call resolution improvement have created FCR/call resolution accountability at all levels.
Best FCR/call resolution measurement practice is to use a short three to four minute outbound IVR survey calling back customers within five to ten minutes of their call, with a sample size of five to 20 surveys per month per CSR. It is our experience that the IVR survey data is more accurate than any other FCR/call resolution measurement technique, and you can report out the data every hour for 12 hours a day and every day the call center is open.
Why FCR Is One of the Best Ways to Drive Down Cost
This section focuses on why FCR improvement can help reduce your call center’s operating cost as well as customer defection. It is important to mention that there is a cost when your customers go to your competition that in most cases goes unreported. It is our experience that FCR performance has a direct impact on call center operating cost and a direct impact on the organizational operating cost.
If you are running a 68 percent FCR rating, which is the call center industry benchmark average, you need to understand that 32% of your customers are going to have to call two or more times to get their call resolved. It is important to also note that the call center industry average is 1.5 calls to resolve a customer’s inquiry or problem. This represents an enormous opportunity to reduce your call center’s operating cost.
The table below shows that the impact of unresolved calls on a call center’s operating cost is huge. For example, based on an annual volume of 2,000,000 inbound calls and 32 percent of customers who had to make two or more calls to resolve their inquiry or problem, the financial impact on the call center direct operating cost is an additional $3,254,400. The average call center has 50 percent of its calls coming from 32 percent of customers who are callers whose call is unresolved.
It is very clear that an effective call escalation process can avoid a lot of the additional calls to resolve and at the same time improve customer satisfaction and retain the organization’s customers. SQM research clearly shows if call escalation is handled effectively, customer satisfaction does not drop. However, there is a 20 percent point drop in customer satisfaction for each additional call required to resolve the customer call. Also, total average handle time (AHT) is shorter with the original CSR and the escalation CSR versus two or more individual CSRs handling the call separately.
The following chart shows that if the customer’s inquiry or problem is resolved in the first call, only 3 percent of those customers are at risk of defecting to your competitors. Conversely, 34 percent of customers who did not get their inquiry or problem resolved are likely to go to your competitors. Most call centers are not aware how much revenue they are losing or the cost to the organization of a customer’s inquiry or problem going unresolved. The bottom line is that FCR is the most important area for the call center to contribute for helping their organization reduce its operating cost and protect its customer base from defecting.
Figure: First-Call Resolution Impact on Customers at Risk
The next table shows that when customers do not get their call resolved, it has a huge negative impact on call center customer loyalty impact indicators such as call center overall customer satisfaction (Csat) and likelihood of continuing to do business. In fact, customers who did not get their call resolved are five times more likely to defect than customers whose call was resolved. Customers who got their call resolved have substantially higher call center overall Csat and are much more likely to continue to do business with the organization.
Table: Call Resolution Impact on Call Center Customer Loyalty Impact Indicators
It is very clear from SQM’s research that when a call is resolved, the call center did its job in retaining the customer for the organization and helped the organization with its operating cost because it is less expensive to keep an existing customer than having to find a new one. It is also very clear that when the call is resolved on the first call the customer is most satisfied, and the call center benefits from not having to take two or more calls to resolve the call.
Using a Cost Per Call Resolution Measure
Cost per call, in our view is an outdated concept and encourages short-term thinking and wrong behavior. Cost per call forces the call center to focus on handle time, and results in CSRs hurrying customers off the phone in order to meet their productivity metrics. Also, CSRs feel stressed and handicapped by the organization to properly service customers. Supervisors suddenly start to look a lot like a militia under the banner of handle time. And customers feel the effects by ending a call confused, unsure of the next steps, and having to call back. So, the short-term win of reducing handle times has actually caused a bigger problem of more calls, which has the effect of making the original problem worse.
The right approach is to shift traditional thinking to cost per call resolution. Cost per call resolution is the ability to determine how much it costs to resolve a customer’s inquiry. When people focus on what it costs to resolve a customer’s inquiry, they realize the biggest driver of cost per call resolution is a second call coming in, thus their focus stays on doing the right thing for the customer and for the organization – ensuring that as many customers as possible don’t need to call in again. From the CSR’s perspective, the driving force for their behavior is “what do I need to do on this call to ensure that my customer does not need to call back?”
The definition of cost per call resolution is: “The average cost for the organization to resolve a customer’s inquiry.” It is calculated by understanding the average number of calls a customer has to place into the organization to get their issue resolved, multiplied by the cost per call.
How to calculate cost per call resolution:
-
Determine how many calls it takes a customer on average to get their call resolved. This means you have to survey your customers to ask them if their call was resolved and how many calls they had to make
-
Use your cost per call, which is not usually hard to find as most call centers have this number readily available
-
Take the average number of times a customer has to call to get their issue resolved and multiply it by the cost per call
For example:
-
The typical call center has an ’average calls to resolve’ (ACR) rate of 1.5
-
The typical call center has a ‘cost per call’ of $3.39
-
So their average ‘cost per call resolution’ is $5.08
Again, focusing on FCR, call resolution and cost per call resolution performance metrics is one of the best ways to improve your call center’s operating cost and to ensure that your call center makes a positive contribution to your organization’s operating cost.
Mike Desmarais is President and Founder of SQM Group, www.sqmgroup.com
