First Call Resolution - definition, its benefits, measuring it, and tips for improving it.

First Call Resolution Definition

First Contact Resolution (FCR) or First Call Resolution is a metric that measures a contact center's ability for its agents to resolve a customer's inquiry or problem on the first call or contact. FCR is one of the most commonly watched metrics in the call center industry. Ideally, the First Call Resolution definition means that no repeat calls or contacts are required for follow-up from the initial call or contact reason from a customer journey perspective.

The FCR rate is the percent of customers who resolved their inquiry or problem on the first call or contact. Each contact channel should measure the FCR rate. SQM's experience shows that there can be significant FCR rate differences among the contact channels that an organization uses to serve its customers.  

First Call Resolution and First Contact Resolution are often used interchangeably. The difference is the First Call Resolution metric name is used when measuring the FCR rate for the phone contact channel. On the other hand, the First Contact Resolution metric name can be used to measure the FCR rate for any contact channel (e.g., email, IVR, chat, website).

Common terms used to describe what FCR stands for are first call resolution, first contact resolution, 1st call resolution, support first call, FCR score, customer satisfaction, customer service call center,  FCR best practices, FCR formula, first attempt resolution, first-time resolution, one-call resolution, and one-contact resolution. As you can see, there are a lot of common terms for the First Call Resolution meaning but what really matters to the customer is that their inquiry or problem is resolved on the first call. 

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

First Call Resolution Benefits

We are often asked, "Why is First Call Resolution important?" First Call Resolution KPI is the KING of all call center metrics because measuring it and improving it helps reduce operating costs and customers at risk of defection, improves employee and customer satisfaction, increases selling opportunities, and the Net Promoter Score^®. No other call center metric provides great insights into customer service, cost, retention, referrals, and opportunities to improve as First Call Resolution does.

The First Call Resolution metric should be viewed as a balanced scorecard metric because it measures efficiency and effectiveness. For example, SQM Group's research shows for a "for 1% improvement in FCR, you reduce operating cost by 1%", and for "every 1% improvement in FCR, there is a 1% improvement in customer satisfaction." First Call Resolution customer satisfaction connection is among one of the highest correlations of call center KPIs. 

Another excellent example of First Call Resolution effectiveness shows that "every 1% improvement in FCR increases transactional Net Promoter Score^® by 1.4 points." Put differently; First Call Resolution is a leading indicator for efficiency and effectiveness metrics. Below is an infographic of the benefits of measuring and improving First Call Resolution.

 

 

FCR 6 Benefits Business Case ▶

 

First Call Resolution Strategies

Many organization and contact center leaders struggle to define an FCR Operating Strategy and how to use it. At SQM Group, we have identified four distinctive First Call Resolution Strategies based on two variants: FCR focus and FCR scope. These two variants can help an organization determine its competitive position for their FCR Operating Strategy they want to use in the marketplace. The FCR focus is based on either a customer experience (CX) differentiation or a lower-cost emphasis. 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-saving benefits. However, a significant advantage in the CX differentiation strategy is being differentiated from the competition by delivering world-class FCR. Put differently, 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.

The First Call Resolution tactics used for CX or cost strategy are very different. In most cases, First Call Resolution strategies are either the Call Center with a Cost Focus or a Call Center using CX Differentiation. 

Most organizational leaders view FCR as a metric that is only applicable to call centers and as a result, FCR strategies at the enterprise level don't tend to be common. However, a small but growing number of organizations have included the FCR metric for enterprise-wide accountability at all levels (e.g., CEO and down). 

An FCR enterprise-wide metric cost or CX differentiation strategy is a worthy question to ponder. Our view at SQM is that you can make a strong business case for using FCR as an enterprise-wide metric for which all employees at all levels are held accountable. 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

First Call Resolution Operating Philosophy

What is First Call Resolution? Our view is that First Call Resolution is more than just a metric; it is a proven call center operating philosophy for people, processes, and technology operating practices for cost-effectively delivering great customer service. Our CX research shows that 93% of customers expect their call to be resolved on the first call. Many of our clients who have achieved world-class FCR performing call centers have developed First Call Resolution strategies and use an "FCR operating philosophy" in their core people, processes, and technology practices at the enterprise level. Furthermore, they hold all employees accountable to First Call Resolution customer satisfaction goals.

Customer Service Support

Of all the metrics you could track, First Call Resolution is the most essential for a customer support queue to help a contact center to lower costs, improve customer satisfaction, retain customers, and increase the Net Promotor Score. The customer support queue (e.g., help desk or escalation) Agents play a vital role in supporting agents in resolving calls or handling complex calls. For many organizations, the call center help desk or escalation queue Agents are the last line of defence for providing First Call Resolution and retaining customers. 

SQM Group's research shows that only 1% of customers expressed their desire to stop doing business with a company when Help Desk First Call Resolution is achieved. However, when it took two or more calls to resolve an inquiry or problem, 4% of customers expressed their intent to defect. An alarming 22% of customers expressed defection if their call was unresolved. 

Most SQM clients use a two-tier help desk or escalation queue Agents to assist service Agents in resolving calls (tier 1), or the call is warm transferred to a help desk or escalation Agent to take over the call to resolve a complex call (tier 2).

Measuring help desk First Call Resolution can be conducted using either external or internal FCR measurement methods.  While it can be more complex, it is essential to measure First Call Resolution for Tier 1 and Tier 2 help desk or escalation queues. SQM's experience shows that a higher percentage of escalation calls are Tier 1 calls, but Tier 2 calls tend to have substantially lower FCR ratings because they are more complex.

A common First Call Resolution formula used for determining the FCR 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 FCR formula is applicable for internal and external FCR measurement methods. 

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. It's up to an organization as to how they want to define, measure, and calculate their call center First Call Resolution rate. The key is to come up with your data-gathering criteria by answering specific questions to determine how to define and measure First Call Resolution. 

Related Blog: 

Calculate First Call Resolution Rate ▶

 

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

External FCR measurement is considered to be the most accurate method for measuring and benchmarking FCR. External measurement lets the customer judge whether 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 for external FCR measurement. The external FCR method uses a standardized measurement methodology so you can benchmark First Call Resolution. 

Internal FCR measurement can be very insightful for trending First Call Resolution and is widely used by contact centers. However, because the organization uses its own chosen internal standard for measuring FCR, the organization decides if FCR was achieved. It is common for the internal FCR measurement to use workforce suites, CRM, 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. 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.

What is a Good FCR Rate?

Based on external FCR measurement, the ​​​​​Call Center Industry average FCR benchmark rate is 70%. This 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 75%. The World-class FCR rate is 80% or higher and only 5% of call centers are able to achieve the World-class FCR Rate. ​​​​​​

Related Blog: 

What is a Good FCR Rate? ▶

Internal First Call Resolution Rate Calculation

To determine 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 decide how to define, measure, and calculate their call center internal First Call Resolution rate. The key is to determine the First Call Resolution data-gathering criteria (e.g., call types, transferred calls, escalated calls, caller identification, and specific time frames for repeat callers) measurement approach. Once the data-gathering method is chosen, you need to decide how to calculate First Call Resolution. There are two conventional approaches used.

The first approach for calculating First Call Resolution assesses all calls resolved on the first call dividend by the total calls received.

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.

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) = 70% First Call Resolution rate formula.

While it may take more work to measure internal First Call Resolution, the results are more meaningful and accurate than the first approach.

Within the contact center industry, both approaches are valid ways to calculate First Call Resolution, and an organization can choose the path that makes the most sense. 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.

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

Repeat call technology is an internal FCR measurement method based on identifying 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 customer 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%)
• Does not provide 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

 

FCR Reimagined ▶