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What is First Call Resolution? Why is it an important metric?

What is First Call Resolution? Why is it an important metric?

The concept of First Call Resolution, or FCR, is a practice in call centers that strives to answer the phone and resolve your issue while you are still on the first call.

In a high-quality call center environment, this means that after the first call you make where you – or your sales representative – speak to a support person, you have had your problem resolved.

Meaning there should be no need for follow-up calls because the problem is clearly understood by both parties and the appropriate solutions have been implemented.

A. What is First Call Resolution?

What is First Call Resolution?

First call resolution is an important call center metric that is defined as the call center’s ability to solve customer issues within the first call itself, with no-follow up required.

FCR is a great way to know about customer satisfaction because the higher the FCR rate, the more satisfied are the customers. Also, this metric helps you measure the agent’s efficiency.

As per the SQM group, 86% of customers feel that issues should be solved within the first call itself.

To calculate FCR, you need to divide the total number of calls resolved on the first attempt divided by the total number of calls received.

B. What is a Good FCR Rate?

When we talk about industry standards of FCR, it usually comes to 65-75%. A recent study showed that the average FCR rate around the world is 74%. You’d think that an FCR rate of 75% or above is reasonable. 

But don’t forget that this is the average rate, and it takes into consideration FCR rates of 41% to 94%. It can be concluded from these numbers that an FCR rate of 90% is considered good.  

C. External First Call Resolution Rate Calculation

The formula for finding external FCR rate is: 

[(No. of customers who say that their query has been resolved) / (No. of Calls)] x 100

If you receive 200 calls on day 1 and 160 customers say their queries have been solved, the FCR rate will be (160/200)x100=80%. 

D. Internal First Call Resolution Rate Calculation

The simple way of calculating the FCR rate is:

[(No. of queries resolved on the first call) / (No. of calls)] x 100

This formula gives an overall idea of the performance of the customer care team. 

Another method of internal FCR measurement is considering the number of first-time calls instead of total calls. The formula is:

[(No. of queries resolved on the first call) / (No. of unique calls)] x 100

Imagine receiving 200 calls, out of which 180 are from first-time callers. Your internal tools determine that 120 queries have been resolved as there was no return call within the determined callback time of, say, two days. Your FCR rate is (120/180)x100=66.67%. 

Tips on Internal First Call Resolution Rate Calculation

Internal first call resolutions are based on the absence of repeat calls. This may not be a foolproof way to determine whether the issue was resolved or the customer decided to give up and end the call.    

It is easy to manipulate this data and metrics used for internal calculations. It depends on the method of data collection, qualifying window, the definition of repeat calls, scope, callback time, etc. All of these are subjective. 

So it is crucial to ensure that the internal FCR measures are not overstated. Analyzing internal FCR metrics can be quite valuable. Make the best use of internal FCR metrics by using them to recognize opportunities to improve the process. 

Besides tracking repeat calls and reopened cases, consider agent logging and quality monitoring. To get the best out of internal calculations, it is good to ask questions during conversations and implement external FCR calculations methods with it.

E. Why is First Call Resolution important?

Why is First Call Resolution important?

1. Helps to retain customers

When you are solving customer issues swiftly and that too during the first call itself, customers are bound to stay with your business for a long time.

Because customers expect a quick resolution to their problems as they don’t want to spend a lot of time on the call.

Also, 67% of customers list poor customer service as the reason to choose another product.

So, make sure to solve issues effectively and efficiently.

2. Change the mindset of dissatisfied customers

When you are able to satisfy customers by providing quick solutions to their problems, you can change the mindset of a dissatisfied customer and make him loyal to your company for a long time.

Because a customer who is unhappy with the product gets excellent customer service, it will help to negate any pre-call frustration that customer develops towards the business.

3. More productive customer service

When agents are solving customer issues within the first call, it eliminates the need for repeat calls.

As a result, agents can handle other customers’ calls because of the short wait time, and all these points to productive and efficient customer service.

4. Drives revenue

When a customer is happy with the customer service, they are likely to spend 17% more just because of customer service.

So, always aim to solve customer issues the first time they contact you.

5. Decrease contact center costs

Acquiring a new customer is more expensive than retaining an existing one. 

Therefore, focus on providing the best customer service for your existing customers through FCR to reduce contact center costs.

F. First Call Resolution Best Practices

First Call Resolution Best Practices

1. Eliminate wait

Businesses need to be quick to solve customer issues because, for customers, time is of utmost importance

Therefore, it becomes essential for customer service to quickly respond to issues raised by customers.

One way to do that is by having a self-service portal. A self-service portal gives customers the power to resolve their own issues without waiting for a call center agent to respond.

It also helps agents to handle more complex issues and saves the cost of hiring new agents for businesses.

And even after that, a customer feels that they need to talk to agents, then in that scenario, agents will be well prepared to handle calls and increasing first-time call resolution.

2. Document answers to common problems

If different customers are asking similar kinds of questions on a regular basis, then it is better to have a knowledge base or FAQ section.

Having an FAQ section will serve as a library in which answers to common questions about the product or service will be there.

Customers can check out this section and solve their issues on their own without the need to contact the agent.

And if customers contact the agent, then agents can direct them to these resources which results in stronger FCR.

3. Gather as much information as possible

Agents should gather as much information as they can about the customers and their issues before and during the call.

When agents are well-informed, there is a high chance they can solve issues within the first call itself.

Businesses need to invest in CRM solutions that contain valuable customer information, including service history.

Another thing is that agents should be trained to listen to customers and ask the right questions to understand the issue completely.

Once agents understand the issue, they will resolve it quickly and there will be no need for another call from the customer.

4. Provide clear instruction whenever possible

Once agents and customers are on the same page regarding the issue, then it is the duty of the agents to be clear and concise to customers about the action that needs to be taken.

If the action is to be taken by agents, then they need to tell customers what they will be doing and when they can expect a resolution.

And if action is to be taken by the customer, then agents need to clearly define the steps that customers have to take to resolve the issue.

But if the response is not clear enough, then there will be a follow-up call to get an accurate response.

5. Ask if there is anything else

You must end the call after the customer is satisfied with the solution. But before you end the call, it is best for an agent to ask the following questions:

  1. Is your issue fully resolved?
  2. Can I help you with anything else?

By asking these questions, you are reconfirming whether the given solution works or not for the customer.

Once the customer confirms again that the solution works, you can expect that it will be the first and last call of yours with the customer for that particular issue.

6. Regularly re-evaluate your methods

You need to continuously monitor and improve your existing methods if you want to improve first call resolution rates.

To start with, you must know the strengths and weaknesses of agents who are responsible for handling customer issues.

You need to review the agent’s interactions with the customers and give them feedback on what went well, where they can improve, etc.

To keep a check on agents, you can use conversation intelligence software like Enthu that will record, monitor, and analyze all the calls of the agents and tell you the calls which have issues.

In addition to this, you need to evaluate feedback received from customers and understand what went well and what didn’t.

Based on this, you can update internal methods to make it more efficient.

G. First Call Resolution Benefits

Is it necessary to resolve a problem on the first call? Isn’t it enough if you can just manage to solve a problem – irrespective of how many calls have been needed to do so? 

You see, FCR indicates immediate problem solving and excellent customer care.

Post-sales services are an excellent quality when potential customers consider your company. 

The advantages of FCR are as follows:

a) Customer Satisfaction: 

Problems while using a product or service are a reason for customers to be upset. If the problem persists, it’s all the more reason for them to feel frustrated!

On the contrary, when you resolve the issue on the first call itself, it improves customer satisfaction.

FCR rate is directly related to customer satisfaction, with a 1% increase in FCR leading to a 1% rise in the CSAT score!

b) Sales Opportunities: 

With more problems resolved in the first attempt through a fruitful conversation and improved customer satisfaction, you help change their perception of your company. 

Satisfying post-sales customer care services can encourage the customer to make more purchases for your company. 

If you can manage to address your customer’s concerns and handle them in a single call, they will be more open to accepting cross-selling pitches.

They might also recommend you to their friends and family, increasing your overall sales.  

c) Customer Churn: 

A frustrating issue for customers is waiting to get their concerns resolved in follow-up calls. They would prefer their problems to be solved in the first call. 

When their expectations are not met, it will lead to a loss of the customer. They will start defecting to your competitors.

This shifted loyalty is called customer churn, which can be reduced with FCR.   

d) Operational Costs: 

FCR can help bring down the volume of repeat or follow-up calls. Hence, this allows the agents to focus on other customer-centric tasks.  

It also prevents the time and cost invested in reworking on the same issue. Let’s take an example to understand this. 

Imagine that your company has 100 agents working for 20 days a month. Each of them handles 100 calls a day and has an FCR rate of 75%. The cost for each call is $5.

This leads to an operational cost of $50,000 per day. Since the FCP rate is 75%, the company loses $12,500 a day because of unresolved issues, i.e., $250,000 a month. A mere increase of 1% in FCR can help the company save $10,000 a month.

H. First Call Resolution Strategies

To improve your First Call Resolution, you can implement the following strategies:

a) Creating Knowledge Base Center

A knowledge base center should offer information about the product/service and have the answers to frequently asked questions. Customers should find their answers by reading an article. Simply sharing the link should help resolve a problem for FCR. 

b) Minimizing Customer Effort to Reach Agent

Customers shouldn’t need to jump through hoops to reach an agent for help. It should be a fast and easy process so that they can clearly express their problem on the call instead of expressing their frustration. This will allow you to resolve the issue in one call.    

c) Understanding the Issue  

In order for you to give the perfect solution, you must understand the question first. Be empathetic and ask questions and gather information. Don’t forget to ask the customer to confirm whether you have understood the situation correctly – and avoid assumptions.

d) Giving Precise Answers

Avoid giving complex solutions to your customers. It can confuse them. The only assumption for you to make is that your customer doesn’t know anything at all. So don’t leave anything for them to interpret. Be clear and use simple words.   

e) Empowering Customers

While resolving issues, your aim should be to equip the customer with the knowledge to use the product/service without facing problems in the future. You can always ask customers if they would be interested in learning more and share the knowledge base. 

f) Answering all Questions

During the conversation, note down all your customer’s questions and address each of them one by one. Don’t disconnect without making sure that if the customer has other related questions, those get answered too on the same call to prevent follow-ups. 

g) Reviewing Feedback

It is essential to review the different support channels like calls, chat, email, etc., on a regular basis. This will help you understand what common problems are bothering your customers. Also, go through the reviews to understand what improvements they want.    

I. How to measure First Call Resolution

First Call Resolution rate can be measured as a comparison between the calls received and the calls on which the queries of the customer were resolved in the first interaction. 

There are two ways of measuring the FCR rate – external and internal. 

a) External First Call Resolution

External FCR measurement is considered a reliable tool to determine the First Call Resolution Rate. This method depends on the opinion of the customers who call to get their issues resolved. The information is collected with the help of a survey. 

At the end of a call, the customer is asked whether the issue was resolved or not. This can be achieved by sending out a post-contact email or using Interactive Voice Response. The agent, too, can directly ask the customer. Or, there might be a poll at the end of a chat.

b) Internal First Call Resolution

Internal FCR measurement does not follow industry standards. That’s because every company has its own method of defining FCR and determining the correct standard for it. It can be an insightful way of analyzing the performance of the contact center. 

It can also help set goals for the agents to achieve higher FCR rates. The standard modes of measuring FCR include QA call monitoring, CRM, ACD, repeat call technology, conversation intelligence software, etc. 

These are used to measure whether a customer calls back with the same issue within a specific period. This is called the callback time, and the company has to decide what it will be. 

For example, the callback time can be 1 day for one company and 30 days for another. Determining the ideal callback time may be difficult, as it depends on the company’s goals. It’s easy to end up with inflated or deflated FCR rates using internal means. 

It is upon the company to decide and justify choosing the formula they do for internal FCR calculation. 

J. Example of improved First Call Resolution

Let’s consider a few examples of First Call Resolution and how they may help. 

Imagine that a customer calls you to tell you that they are unable to use the app that your company provides. From the conversation that follows, you realize that they have not used the same email id to register and log in. 

They try using the same email id and succeed in logging in and using the app. This means that you manage to resolve their problem in a single call, without escalation or follow-up calls. 

That’s a First Call Resolution, giving you a 100% FCR rate. However, it is possible for you to end up taking the second or third call with a customer after another agent fails to resolve the problem in the first call. 

It might not necessarily be possible for you to resolve the problem in this call, which can hamper your FCR rate through no fault of your own. 

To improve FCR, you need to measure and analyze your current performance first. A great example of a tool to get started with the improvement process is speech analytics. 

It captures entire conversations and incorporates caller identifiers with speech. This helps to identify repeat calls with a particular agent and understand the correlation with issues and products.    

This way, it is easier to figure out the reason behind the repetition of a call from a contact regarding the same issue – and address the underlying problem. Call centers using speech analytics have a higher FCR rate compared to those that do not.  

Improving FCR can mean – 

  • Eliminating wait time,  
  • Providing clear instructions, 
  • Teaching the customer by offering information for future use,
  • Verifying whether you have resolved the problem, etc.

K. Conclusion

First Call Resolution is an important call center metric for understanding customer satisfaction.

By looking at this metric, you would understand whether customers are happy with the customer service or not.

Also, it is a great way to know how efficiently, agents are working. If agents are efficient, then you can see high first-call resolution rates.

Improvement in FCR is directly related to low costs, high customer satisfaction, and increased profits.

Therefore, it is important that solve customer issues within the first call itself, without arising the need for repeat calls.

L. FAQs

Q: What affects first call resolution?

Making sure your contact center’s first call resolution (FCR) is at par with the best in the industry is no small task. It requires solid FCR goals, continuous monitoring, and measurements across multiple channels. Plus, you need to be able to adjust your strategy based on changes in your business, competitors, and industry trends.

Q: What is FCR in ITIL?

First contact resolution in ITIL is a metric you can use to measure how well the organization is dealing with incoming requests. In the Service Support phase of ITIL, you will come across two review processes: Operational Review and Functional Capability Review (FCR). 

Q: How do I resolve the first call resolution?

There are 5 points you should be taking into consideration when analyzing your first call resolution. 1. Proper assessment of all possible sources of information 2. Preparation of a Knowledge Base 3. Clear and Informative Information 4. Preventive Care and Ongoing Support 5. Customer Feedback Resolved

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