First Call Resolution:  Comprehensive Guide

What is a Good FCR Rate?

Based on a post-call survey method, the Call Center Industry benchmark average for the First Call Resolution rate is 70%. The FCR rate means that 30% of customers have to call back the organization about the same inquiry or problem.

The First Call Resolution industry standard for a good FCR rate is 70% to 79%. Therefore, call centers with an FCR rate below 70% need improvement. Conversely, the World-class FCR rate is 80% or higher, and only 5% of call centers can achieve the World-Class FCR Rate. 

It is important to emphasize that the FCR rate varies by contact centers, call types (e.g., billing, claims, orders, inquiries, technical), lines of business, and industries. Furthermore, the FCR rate can differ due to how the FCR rate is measured.

First Call Resolution and First Contact Resolution measurement calculation use the same method to measure the FCR rate. Below is the First Call Resolution rate formula used to measure the FCR rate.

FIRST CALL RESOLUTION FORMULA

 

From a high-level perspective, the FCR formula rate is based on calculating the number of customers whose inquiry was resolved on their first call, divided by the total number of customers who had a unique inquiry.

The First Call Resolution formula rate applies to internal (e.g., QA, CRM, workforce suites) and external (e.g., post-call survey) FCR data measurement methods.

First Call Resolution Comprehensive Guide PDF

Below is a free, downloadable PDF of the First Call Resolution Comprehensive Guide. This can be downloaded and shared within call centers to learn more about the most important call center metric, FCR.

 

First Call Resolution - Video

Below is our First Call Resolution Video that covers the definition, benefits, measurement, and tips for improving the FCR rate.

First Call Resolution - Powerpoint Slides

Below are First Call Resolution PPT slides that cover the definition, its benefits, measuring it, and tips for improving it.

What Affects Call Centers for Improving or Achieving a High FCR Rate?

There are many challenges for improving the First Call Resolution rate. At SQM, we identified the three main sources of errors (SOE) that hinder a high FCR rate:

• 38% are due to agent mistakes,
• 13% are due to miscommunication by the customers,
• and 49% are because of organizational policies and procedures

Furthermore, SQM research shows that the top five repeat call reasons that hinder a high FCR rate and great customers service are:

1. A customer needed to verify or check the status of their unresolved issue
2. While the customer was on hold, they got disconnected
3. Agent lacked the knowledge to resolve the issue
4. The customer request was not done
5. The customer was redirected to a 3rd party

Improving or achieving a high FCR rate requires call center leadership to be FCR obsessed to enhance the support experience for agents, customers, and the organization as a whole. Furthermore, it is essential to determine the root causes of repeat calls to resolve the same inquiry or problem.

Moreover, numerous factors affect First Call Resolution rates, including agent turnover, call volume, average handle time, calls transferred, WFH, labor shortages, and agent training. It is also SQM's view that the number one hindrance in 2022 for achieving high FCR is the historically high agent turnover rate of 35%. 

2. Why is First Call Resolution Important?

At SQM, we are often asked, "Why First Call Resolution is the Most Important Call Center Metric?" FCR is not only a measure of customer service effectiveness but also measures to call center's operating efficiency. No other metrics provide effectiveness and efficiency insights to the level that FCR does. Furthermore, the First Call Resolution metric should be considered the most important call center metric of all metrics and KPIs due to the following positive impact areas when an increased FCR rate takes place:

• Reduces operating costs
• Reduces customers at risk of defection
• Improves customer satisfaction
• Improves employee satisfaction
• Increases opportunities to sell
• Improves Net Promoter Score

Below is an infographic of why FCR is the most important call center metric.

WHY FIRST CALL RESOLUTION IS THE MOST IMPORTANT CALL CENTER METRIC

Furthermore, FCR is the KING of all call center metrics because it is a gateway CX metric for Csat, referrals, and retention business outcomes. For example, customers who experience call resolution and FCR are more likely to be very satisfied, continue to do business, and recommend the organization to others due to their call center experience.   

Put differently, Csat, customer referrals, and retention business outcomes cascade from call resolution and FCR metrics. Another essential point is that the statistical correlation between the FCR leading indicator and lagging indicators (e.g., Csat, customer referrals, and retention) is the highest of all call center metrics.

The bottom line, when FCR performance is high or low, so too are the performances of Csat, customer referrals, and retention.

The business case of the FCR metric importance is so high that some enlightened leading North American organizations have used it as an enterprise-wide metric for performance accountability, including at the CEO level.

LEADING/LAGGING KPIs OF A CALL CENTER CX

 

6 BENEFITS FOR MEASURING FIRST CALL RESOLUTION

The benefit of the FCR metric is you gain tremendous insights into how customers view your organization's performance for efficiency and effectiveness metrics. For example, FCR performance correlates to your operating efficiency (e.g., cost per call resolution) and customer service effectiveness (e.g., Csat, retention, referrals). Put differently, when your FCR is high or low, so are your operating efficiency and customer service.

SQM's call center CX research shows the following six benefits for measuring and increasing the First Call Resolution rate are the following:

• For every 1% improvement in FCR, you reduce your operating costs by 1%.
• 95% of customers will continue to do business with the organization due to achieving FCR.
• For every 1% improvement in FCR, there is a 1% improvement in customer satisfaction.
• For every 1% improvement in FCR, there is a 1% to 5% improvement in employee satisfaction.
• When a customer's call is resolved, the cross-selling acceptance rate increases by 20%.
• For every 1% improvement in FCR increases transactional Net Promoter Score® by 1.4 points."

Below is an infographic of the six benefits of measuring and improving First Call Resolution.

 

 

 

3. How to Measure First Call Resolution?

As the old saying goes, you can't improve what you don't measure, and you can't measure what you can't define. Therefore, it's up to an organization to define, measure, and calculate the First Call Resolution rate.

Our research shows that over 70% of call centers that measure, benchmark, and track the FCR rate for one year or more experience a 1% to 10% annual increase in their FCR rate. A 1% improvement in their FCR rate equals $286,000 in annual operational savings for the average midsize call center.

The key is to develop your data-gathering criteria by answering specific questions to define and measure the FCR rate. Also, it is helpful to use First Call Resolution analytics tools like mySQM™ CSM software to measure FCR.  

Below are the common practices for measuring and calculating external and internal First Call Resolution rates.

External FCR measurement is considered the most accurate method for measuring and benchmarking FCR. External FCR measurement lets the customer decide if First Call Resolution took place; after all, their opinion is what matters the most.

In most cases, a post-call phone or email survey method is used as an external FCR measurement Voice of the Customer (VoC) listening post. It is also common for agents to ask a customer if they resolved their call. The phone and email survey external FCR methods use a standardized measurement methodology so you can benchmark the First Call Resolution rate against other organizations' call centers.

Internal FCR measurement can be insightful for trending First Call Resolution and is widely used by contact centers. Based on organization criteria, the FCR rate is determined. However, because the organization uses its own chosen internal standard for measuring FCR, the FCR data, in most cases, is not benchmarkable against other organizations' call centers.  

It is common for the internal FCR measurement to use workforce suites, CRM, case management, QA, and repeat call technology methods to determine the FCR rate. The internal FCR rate is based on whether the customer called back for the same issue within 1 to 30 days. However, choosing the appropriate callback time can be difficult, and as a result, there is no standard for internal FCR measurement, making the FCR rate less accurate and can inflate the FCR rate.

FIRST CALL RESOLUTION MEASUREMENT METHODS

How is First Call Resolution Rate Calculated?

External FCR Rate Calculation

To determine the external First Call Resolution rate: callers are asked directly whether the issue was resolved using a post-call survey method. The First Call Resolution questions are asked using survey methods such as email, Interactive Voice Response (IVR), or a phone interviewer.

The First Call Resolution rate is calculated based on customer survey questions for the external post-call survey measurement. For example, one method is asking two survey questions where a call is considered FCR if a customer answers 'yes' to the question, "Was your call resolved?" and in 'one call' to the question, "How many calls did you make to resolve your call?"

For example, the First Call Resolution rate calculation is the total number of customers who said their call was resolved on the first call (280) divided by the total number of surveyed (400) = First Call Resolution rate of 70%.

 

 

Contact centers are encouraged to use an open-ended survey question to ask callers why they could not resolve their call on the first call. Caller feedback can be tagged for identifying call-back reasons for targeted opportunities for First Call Resolution improvement.

A post-call survey is an external FCR measurement method completed by a customer via email, IVR, or a phone interviewer survey method within one business day of their call to a contact center. The pros and cons of using a post-call customer survey method to measure the First Call Resolution rate are listed below.

Pros with the external measurement method are:

• The customer determines First Call Resolution
• The best FCR, Csat, and NPS® accuracy insights of all methods
• Provides tremendous insights for improving operating costs
• Can make the call center more customer service focused
• Identifies dissatisfied customers for service recovery
• Standardized measurement so you can benchmark FCR to other call centers
• Provides call resolution accountability/coaching to the agent
• Has the best track record for helping improve FCR, Csat, NPS®, and Costs
   

Cons with the external measurement method are:

• Highest cost method to measure First Call Resolution
• Small sample size compared to internal measurement methods
• Some customers reluctant to complete a phone or email survey
• Customer survey fatigue
• Having to send call list to survey vendor if using a 3rd party
• Requires following government guidelines in contacting customers (e.g., Telephone Consumer Protection Act)

 

Internal FCR Rate Calculation

To determine the average internal First Call Resolution rate: customers who called back are identified using workforce suites, Automatic Call Distribution (ACD), and Customer Relationship Management (CRM) repeat call technology. First Call Resolution is determined based on repeat callers identified by a phone number, account number, or case number within a specific time frame.

While internal measurement methods are straightforward to implement, there are flaws with this technique because there is no First Call Resolution industry standard for measuring it.

Some flaws are the same person might call from a different number, or the follow-up call may not happen immediately. But this can be an excellent approach to see First Call Resolution trends over time if the limitations are understood.

Each organization must define, measure, and calculate their call center internal First Call Resolution rate. The key is to determine the FCR data-gathering criteria (e.g., call types, transferred calls, escalated calls, caller identification, and specific time frames for repeat callers).

Once the data-gathering method is chosen, you need to decide how to calculate First Call Resolution. There are two conventional approaches used.

For example, the first approach for calculating First Call Resolution is the total number of calls resolved on the first call (8,000) divided by the total number of calls received (10,000) = First Call Resolution rate of 80%.

While this can be a simple way to measure internal First Call Resolution, it is not always accurate. However, this approach can give a solid perspective on customer service team performance if looking at the First Call Resolution rate from a snapshot perspective.

The second approach for calculating First Call Resolution only looks at calls resolved on the first call divided by the total number of first calls, which we call unique inquiries.

For example, the First Call Resolution rate calculation is the total number of calls resolved on the first call (7,000) divided by the total number of unique inquiries (10,000) = First Call Resolution rate of 70%.

While the second approach for measuring internal First Call Resolution may take more work, the results are more meaningful and accurate than the first approach.

Both approaches are valid ways to calculate the internal First Call Resolution rate within the contact center, and an organization can choose the path that makes the most sense. However, whichever approach is selected, an organization must explain the calculation method to the customer service team and leaders to understand the First Call Resolution meaning.

* Total # of customer/calls resolved on the first call refers to the total number of calls resolved with no-repeat calls required about the initial call reason. The total number of calls resolved in one call/contact is calculated by checking if a customer contacted the organization 30 days prior or 30 days after a unique interaction, using any contact channel. For example, if a customer did not contact an organization using any touchpoint (e.g., call center, web, and email) either 30 days before or 30 days after their unique interaction with a touchpoint, it would be viewed as resolved in the first call/contact.

** Total # of unique inquiries refers to the total number of unique customer interactions where no other calls were made about the initial call reason.

Repeat call technology is an internal FCR measurement method that identifies repeat callers using workforce suites, ACD, speech analytics, and CRM technology. Listed below are the pros and cons of using this technology method to measure First Call Resolution.

Pros with the internal measurement method are:

• Utilizes existing workforce suites, ACD, and CRM technology
• CRM and speech analytics can be used to do deep-dive analysis for repeat calls
• These methods are the lowest cost method for measuring First Call Resolution
• Can customize data gathering criteria for measurement   
• Provides extensive data for trends and fail-points
• It can be used for agent accountability and coaching
• Provides organizational insights that customers cannot

Cons with the internal measurement method are:

•  The organization determines if the call is First Call Resolution
• Can conflict with external data
• Can substantially overstate First Call Resolution (e.g., 10 to 20%)
• Provides limited Csat or NPS improvement insights
• Can make a call center less customer-centric focused
• Measurement is not standardized, hindering your ability to benchmark FCR
• Does not have a consistent track record for improving
   

4. How to Improve First Call Resolution?

FCR Strategies for Improving CX

Many organization and contact center leaders struggle to define an FCR Operating Strategy and how to implement it. At SQM Group, we have identified four distinctive FCR Operating Strategies based on two variants: FCR focus and FCR scope.

These two variants can help an organization determine its competitive position for the FCR Operating Strategy they want to use in the marketplace. The FCR focus is either on a customer experience (CX) differentiation or a lower-cost emphasis. In addition, the FCR scope is either enterprise-wide or a contact center level.

The Four First Call Resolution Strategies Are:

1. Contact Center with a Cost Focus
2. Enterprise-Wide with a Cost Focus
3. Contact Center using CX Differentiation
4. Enterprise-Wide using CX Differentiation

All four FCR Operating Strategies provide cost savings and improved CX. However, there can be significant differences in the benefits achieved from each FCR Operating Strategy. The quad map infographic below illustrates the competitive position of First Call Resolution Strategies.

 

Legend:

Contact Center = relates to this channel only
Enterprise-wide = relates to some or the whole organization
Lower Cost = involves cost per contact resolution
CX Differentiation = involves differentiating CX based on FCR

1.    Contact Center with a Cost Focus

Many companies use a contact center with a lower-cost focus FCR strategy. The FCR focus is not on improving the customer's journey experience; it is fixing areas to avoid repeat calls for the same issue and lower cost per call resolution. Typically an ad-hoc (e.g., temporary) project management team is assigned to improve the repeat call reasons and root causes that the contact center has control over for fixing. The project team usually consists of agents, supervisors, analysts, and a project manager.

The project team focuses on FCR improvement issues that the contact center is the source of error (SoE). 38% of all repeat calls for customers trying to resolve the same interaction the contact center is the SoE. Post-call surveying is conducted monthly, quarterly, semiannually, or yearly and is used to identify and check if repeat call issue initiatives improve the FCR rate. 

2.    Enterprise-Wide with a Cost Focus

Few companies use an enterprise-wide with a lower-cost focus FCR strategy. However, this FCR strategy represents a significant cost-saving opportunity because the enterprise (e.g., outside the contact center control) SoE is 49% of all repeat calls for customers trying to resolve the same interaction. As a result, this FCR strategy relates to departments inside or outside the contact center to fix non-FCR issues.

The project team usually comprises cross-functional team members, analysts, and a project manager. Post-call surveying is conducted monthly, quarterly, semiannually, or yearly and is used to identify and check if repeat call issue initiatives improve the FCR rate. The cost-saving from this strategy is also from call avoidance for customers not having to call back a company to resolve an interaction they previously called to get resolved.

3.    Contact Center using CX Differentiation

Many companies focused on improving FCR and customer service use a contact center CX differentiation FCR strategy. The FCR focus delivers a great customer journey experience (e.g., MoT - understanding, helping, caring, and resolving) to provide high FCR and customer service. Typically a permanent project management team is assigned to improve the MoT, repeat call reasons, and root causes that the contact center has control over for fixing.

The project team usually consists of agents, supervisors, analysts, and a project manager. In addition, post-call surveying is conducted daily to identify and check if repeat call issue initiatives improve the FCR rate, service recovery, and customer journey. A significant advantage in the CX differentiation strategy is being differentiated from the competition by delivering contact center world-class FCR and customer service.

4.    Enterprise-Wide using CX Differentiation

Very few companies focused on improving FCR and customer service use an enterprise-wide CX differentiation FCR strategy. Moreover, most C-level leaders have never considered FCR as an enterprise-wide metric, but at SQM Group, we think they should. There is a strong business case to be made that FCR reflects the enterprise-wide ability to provide great customer service. Typically a permanent project management team is assigned to improve the MoT, repeat call reasons, and root causes that the enterprise (e.g., some or all departments) has control over for fixing.

The project team usually consists of cross-functional members, analysts, and a project manager. In addition, post-call surveying is conducted daily to identify and check if repeat call issue initiatives improve the FCR rate, service recovery, and customer journey. A significant advantage in the CX differentiation strategy is being differentiated from the competition by delivering enterprise-wide world-class FCR and customer service.

Summary

Each FCR Operating Strategy requires a different level of FCR commitment. For example, CX differentiation requires the highest level of FCR commitment; conversely, cost focus requires the lowest level of FCR commitment.

Furthermore, each strategy requires an FCR goal, accountability, and incentives for some or all employees. Whether the FCR scope is at the contact center or enterprise-wide level, the FCR focus can have a narrow (e.g., some employees) or broad (e.g., all employees) applicability.

The bottom line is the CX differentiation strategy focuses on providing great customer service based on achieving high FCR versus a cost strategy that focuses on lowering operating costs based on improving FCR.

First Call Resolution Improvement Tips

It is often said that it is hard to measure First Call Resolution accurately but even harder to improve it. Many call center leaders do not know how to improve First Call Resolution. SQM Group's research shows that only 5% of contact centers improve First Call Resolution 5% or more in a given year. SQM's First Call Resolution tips have a proven track record for helping clients improve their FCR rate. First Call Resolution activities require a high commitment from senior management. Below is how to increase First Call Resolution tips using SQM's FCR Improvement Cycle:

5. How to Measure First Call Resolution Using CX Measurement Software?

 

To keep up with customer expectations, understand performance, and improve FCR and Csat, a call center VoC program needs to employ CSM software.

Again, CSM software is an excellent tool for capturing, measuring, benchmarking and reporting customer service delivery. However, before choosing a CSM software vendor, you need to understand how it fits your call center VoC program. Listed below are a few questions to consider:

• What are your call center objectives? Higher FCR and Csat? Lower cost? Improve transactional NPS? You need to understand your goals and objectives before choosing a CXM software vendor.
   
• Do your CSM software features need to be designed to specifically measure, coach, and reward agent and supervisor customer service delivery?
   
• Does your call center need a VoC closed-loop process at the agent level? For example, can agents follow up on customer feedback one-to-one to close the loop?
   
• What are the customer survey quota requirements? For example, will the quota be at the agent, line of business (LoB), or call center level? What will be the survey methods used (e.g., phone, email, IVR, website pop-up, or a mixture of different methods)?
   
• Who will be accountable for FCR, call resolution, and Csat results (e.g., agent to CEO)?
   
• Do you want to capture, analyze, and report internal and external data in the same software platform?
   
• Do you want the CSM software capabilities to include agent coaching, recognition, or soft skills e-learning?
   
• Do you want your CSM software capabilities to recognize agents for their call resolution and Csat using a debit card for instant gratification?
   
• What customer insight data is already available, and by what function or department (e.g., research, workforce management, QA)?
   
• How are existing internal and external data being used? For example, is the data used by agents, supervisors, or leaders, and accountability metrics based on FCR or Csat performance targets?
   
• Where are the gaps in customer service understanding? First, consider all contact channels (e.g., phone, email, chat, IVR, website), job levels (e.g., agent to CEO), segments (e.g., LoB, products, services), and call types (e.g., claims, service, sales, billing, technical, complaint).
   
• How will the information be analyzed? For example, will you use internal and external data for the same calls? Will you use structured data (e.g., FCR rating, QA score) and unstructured information (e.g., open-ended survey questions, call recording text)? Will analysts need to be fully trained in analyzing and reporting structured and unstructured data?
   
• How will the information be reported? For example, will agents, supervisors, or leaders access dashboard reporting? What VoC data needs to be shared? How often will the VoC data be shared, and who needs to see it? For example, will you share it with customers?
   
• How will you action the customer feedback? Will you use a VoC closed-loop process (e.g., to go from identifying to actioning people, processes, and technology improvement opportunities)? Do your CSM software requirements need VoC closed-loop capabilities?

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