Original Publication: Customer Management Insight - October 2008
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Call centers are recognizing the powerful impact that FCR has on customer satisfaction, agent morale and operating costs—and they’re putting strategies in place to ensure success.
First-call resolution is nothing new. Its acceptance as perhaps the most critical metric in customer support is. For years, contact centers have coveted a familiar list of key performance indicators—service level, average speed of answer, number of calls handled, abandon rate, wrap-up time, et. al. But recent research suggests that no single key performance indicator has a bigger impact on customer satisfaction than first-call resolution (FCR).
According to customer contact research and consulting firm Service Quality Measurement (SQM) Group, customer satisfaction drops an average of 15 percent with each callback a customer must make. And a study of more than 150 contact centers conducted by SQM Group found that centers which achieved world-class* customer satisfaction ratings had a FCR average of 86 percent, while centers that were not among the elite in customer satisfaction had a FCR average of only 67 percent. Sears Canada, winner of SQM Group’s “Highest Customer Satisfaction Award” in 2003 (91percent of customers rated their experience with Sears Canada’s contact center as “very satisfied”), boasts an FCR average of 92 percent.
Increased customer satisfaction isn’t the only big benefit realized by contact centers that achieve high FCR. According to SQM Group, these centers typically also enjoy…
"World-class distinction requires that 80 percent or higher of contact center customers rate their experience as “very satisfied.” (SQM Group)
LOWER OPERATING COSTS
A low FCR rate breeds a high number of repeat callers—and frequent callbacks aren’t cheap in high volume contact centers. As Sara Kennedy, a partner with SQM Group, says, “If you are running at 67 percent [FCR], you need to understand that 33 percent 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.”
Research findings from “Down Under” strongly support
Kennedy’s point. Niels Kjellerup, senior partner with Australian contact center consulting firm Resource International, conducted an in-depth analysis of four large contact centers (more than 200 seats each), and discovered the following:
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A minimum of 20 percent of all calls are repeat calls from customers needing an answer or help they didn’t get.
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The cost of a complaint call not handled at point of entry escalates by 500 percent when it is referred.
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The cost of a claim call deferred to a senior manager costs 650 percent more than if handled by an agent.
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An unhandled query costs 350 percent more than a call resolved on the first attempt.
“My estimate from the study is that 25 to 30 percent of a call center’s operating cost is spent on dissatisfying the customer—that is, no first-call resolution, and then rectifying it,” says Kjellerup.
INCREASED SALES OPPORTUNITIES
You can’t sell to a customer whose service requests have not been met. Trying to do so seems forced, and is likely to frustrate and alienate customers, says Kennedy. “We have done a lot of work that shows that customers’ needs must be resolved before the CSR earns the right to move on to any sort of sales activity. [Otherwise] the fundamental customer relationship is undermined.”
HIGHER EMPLOYEE SATISFACTION
The strain on agents who must contend with frequent callbacks from often-frustrated customers is significant, and invariably leads to low morale and high turnover. However, when agents are given the tools and training they need to achieve high FCR, they feel empowered and confident on calls—and customers take notice.
The huge potential benefits tied to achieving high FCR have grabbed the attention of more than just a few organizations. In fact, some contact centers have revamped their entire performance measurement strategy, putting more traditional KPIs on the back-burner and focusing primarily on FCR.
Aetna U.S. Healthcare introduced a formal first-call resolution program in 2002—and showed its sincere commitment to the new initiative by actively telling customers about the change via whole-page ads in newspapers and online ads. The ads featured copy such as “Aetna’s First-Call Resolution program. Answering the call to solve your problems,” and went on to explain that the company would now “measure customer service by the number of problems solved, not just the number of calls answered.”
Let customers in on a bold new service strategy, and you better make good on your word. Aetna apparently hasdone that. Since the program’s inception, the insurance giant’s customer service centers have experienced reduced call volumes and a lower ratio of calls per member, which,
according to Tanis Sugden, service center head of Aetna’s Thousand Oaks, Calif., operation, “can be attributed, in part, at least, to our efforts to resolve members’ issues on the first call.” In addition, Aetna has seen a 10 percent improvement in customer satisfaction (as measured by post-call surveys) over the past year.
Measuring FCR from the Customer’s Perspective
While FCR is quickly emerging as a critical KPI for contact centers, there is some question about what exactly constitutes a “resolved call.” Some centers consider a call resolved if the agent didn’t need to transfer it. Others deem a call resolved if there is no follow-up work to complete after it. Certainly, shooting for calls that require neither transfers nor follow-up work is a sound approach to
quality service, but it is incomplete from an FCR measurement standpoint, say experts, because it fails to take into account something essential—the customer’s perspective.
“Many contact centers have employed technology and manual solutions to help them answer their FCR rate question,” says Dr. Jodie Monger, president of Customer Relationship Metrics and a pioneer in customer satisfaction measurement for contact centers. “Some of these solutions
cost thousands of dollars to implement, but not one of them can answer the question better than the customer. Reviewing phone records and running a software application is the ultimate ‘beating around the bush’ in this case. Stop trying to get to your FCR rate via the back door… Go to the source.”
More call centers are starting to take Dr. Monger’s advice, implementing real-time customer feedback applications— phone, IVR or online surveys that customers complete immediately after the service interaction. That’s how Aetna gauges its FCR rate. “We take a random sampling of members who recently contacted Aetna via telephone or Internet for service,” explains Aetna’s Sugden. “A dedicated team of in-house trained survey analysts call members to
participate in a five-question survey that helps us learn about their recent service experience.”
Centers with tighter budgets and/or fewer staff can take a more informal approach to gathering customer feedback on FCR by simply having agents ask the customer at the end of the call if their inquiry has been resolved, says Kennedy.
Not only does asking customers whether or not their issue was resolved provide a clearer picture of the call center’s true FCR rate, if the survey is appropriately designed, it can help the center to discover some of the main causes of repeat calls, says Monger. “For those [customers] who had a problem that was not resolved on the call, the survey should branch to an openended question to capture the customer’s description of the problem. This qualitative information adds the explanation to the dramatic quantitative information you now have available. The cause of unresolved calls is invaluable to correcting process issues.”
Creating a “One-and-Done” Environment
Now that you know the ideal method for measuring FCR rate, let’s find out how to get the ideal results.
Certainly effective forecasting and scheduling, as well as strategic call-routing practices, are essential—ensuring that contacts go where they need to go, and get answered efficiently. But these things alone will hardly guarantee FCR success. Following are suggestions from Kennedy, Monger, Sugden and other contact center professionals with ample hands-on experience in achieving high FCR rates.
GIVE AGENTS THE TRAINING AND TOOLS THEY NEED TO RESOLVE CALLS “ON CONTACT”
There is no way a contact center can achieve a high FCR rate if agents are not well-versed on all contact types, don’t know where to find key information, or are equipped with antiquated or poorly designed desktop applications. As Kennedy explains, “When FCR is poor, it is often because CSR knowledge is lacking, or because their authority [and technology] is lacking. The symptoms we see are high hold rates and high transfer rates, indicating that the CSRs are having to seek the knowledge and authority they need to resolve their customer’s issues.”
Sears Canada attributes its consistently stellar FCR rate to the center’s dedication to agent training and empowerment. The center’s supervisors spend 85 percent of their time coaching staff, compared to the industry average of
50 percent. This, coupled with the fact that Sears Canada has brought all the information that agents need to their desktops, prepares agents to efficiently handle all inquiries and gives them the confidence to cross-sell and upsell additional products when appropriate.
To help achieve such FCR success, Sears Canada and Aetna both have made a habit of closely evaluating the types of calls that often are not resolved on the first contact, determining the common causes, and then revamping training, coaching and workflows accordingly.
AVOID A PERFORMANCE MANAGEMENT PARADOX
Even with the right training and tools in place, FCRwill suffer if agents receive conflicting messages in regard to performance objectives. Asking staff to shoot for a high FCR rate while at the same time rigidly requiring them to handle a certain number of calls per shift will likely result in rushed calls, a high incidence of errors and rework, and, consequently, poor customer satisfaction.
However, this does not mean that contact centers focusing on FCR need to do away with their traditional productivity metrics, points out Aetna’s Sugden. The key, she says, is to find the right balance among metrics, and to demonstrate to agents that what you are asking of them is feasible. “Many people see a conflict between FCR and traditional call metrics, such as average handle time,” says Sugden. “We have conducted analysis to illustrate that, in our contact centers, the two measures are not mutually exclusive. Communication of the results of this analysis has been an important component in the success of our [FCR] program. Highlighting [agents] who are high performers with both these metrics has also helped to reshape opinion.”
RECOGNIZE AND REWARD AGENTS FOR ACHIEVING FCR OBJECTIVES
Incentive programs also need to align with FCR initiatives to ensure positive results. Sears Canada frequently holds contests that are based around the FCR metric, rewarding top-performing groups with prizes and other perks, including first dibs on preferred schedules.
At Aetna’s contact centers, FCR is the key focal point not only for agent incentives, but for supervisor and manager incentive programs, as well. “The focus and attention on our entire Customer Service organization has been shifted to achieving measurable satisfaction with our problem resolution,” says Sugden.
INVOLVE AGENTS IN THE PROCESS
Centers that focus on the previous three practices generally achieve high FCR rates. Those that ask their agents to focus on them, as well, achieve even higher rates. Top organizations recognize that agents are the true customer contact experts in the call center, thus these organizations actively solicit suggestions and feedback from agents on what they need to achieve FCR success. Agents can shed ample light on what tools, training and procedures are lacking, what performance metrics are conflicting, and what incentives would most inspire them to perform at their best. And in some cases, they can take charge of the entire FCR initiative themselves. Just ask Aetna.
“Our first-call resolution program was developed by a group of customer service professionals (CSPs) and has really been a grassroots effort,” Sugden explains. “CSPs have participated in the roll-out in each Customer Service Center, and have provided feedback throughout the program.”
With such a high level of FCR ownership, Aetna agents are fully committed to achieving a high level of FCR success. “It makes us feel more responsible for the information we provide and actions we take to resolve an issue,” says Darren Wilde, a senior Aetna CSP. “This often inspires a feeling that we have accomplished something and are making a difference. It’s really good for morale.”
