First Call Resolution (FCR) Comprehensive Guide
Most call centers' primary goal is to deliver great customer service at the lowest cost. This call center FCR blog is a comprehensive guide for defining, measuring, tracking, benchmarking, and improving FCR to deliver great call center customer service at the lowest cost.
The FCR guide was developed based on SQM Group's over 25 years of measuring, benchmarking, and improving FCR with leading North American call centers. SQM is considered the thought leader and the gold standard for the call center industry to measure and improve FCR. This call center FCR comprehensive guide will answer the following primary (5) First Call Resolution and related questions.
Discover the following:
- What is Call Center First Call Resolution?
- Why is First Call Resolution Important?
- How to Measure First Call Resolution?
- How to Improve First Call Resolution?
- How to Measure First Call Resolution Using Customer Service QA Software?
Call Center FCR Comprehensive Guide Questions
1. What is Call Center First Call Resolution?
First Call Resolution (FCR) is a metric that measures a call center's performance for resolving customer interactions on the first call or contact, eliminating the need for follow-up contacts. The FCR metric is essential for monitoring a call center's operating cost efficiency and customer service delivery effectiveness. As a result, FCR is one of the most-watched call center industry metrics and is considered the most important call center metric.
The meaning of the First Contact Resolution rate is the percentage of customers who resolved their touchpoint interaction on the first call or contact. Therefore, each touchpoint should measure the FCR rate. SQM's experience shows that there can be significant FCR rate differences among the touchpoints an organization uses to serve its customers.
Ideally, the First Call Resolution definition means no repeat calls or contacts are required for follow-up from the initial call or contact reason from a customer journey perspective.
We are often asked, "what is the difference between call resolution and First Call Resolution metrics?" The call resolution metric is a Key Performance Indicator (KPI) that measures if the customer interaction was resolved, versus FCR measures if the customer interaction was resolved on the first call.
First Call Resolution and First Contact Resolution are commonly used interchangeably. The First Call Resolution metric name is typically used when measuring the FCR rate for the phone or IVR touchpoints. On the other hand, the First Contact Resolution metric name is often used to measure the FCR rate for touchpoints (e.g., email, chat, website, retail).
One Call Resolution (also known as one contact resolution) measures an organization's performance for resolving customer interactions on the first call or contact using only one touchpoint. One Contact Resolution (OCR) metric uses tougher criteria than the FCR metric because it considers all touchpoints (e.g., call center, website) used to resolve the same interaction. Conversely, the FCR metric only measures CX using one touchpoint (e.g., call center) to resolve the same interaction. Typically, OCR is 10% or lower than FCR.
What is a Good Benchmark First Call Resolution 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 from a CX journey perspective.
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 calculations 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 Rate
First Call Resolution formula rate is based on calculating the Total Customer Interactions Resolved on the First Try, divided by the Total Number of Customers who had a Unique Interaction and then multiplying the result by 100 to get a percentage.
For example, a call center resolved 280 customer interactions on the first try in a single day. For that day, a total of 400 customers had called with a unique interaction. Therefore, that day, the FCR rate (280 ÷ 400) was 70%.
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 Best Practices
We believe 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.
Most call centers' primary goal is to deliver great customer service cost-effectively. Moreover, SQM's CX research shows that 93% of customers expect their call to be resolved on the first call.
Given that the customers expect to resolve their inquiry or problem on the first call and the desire of most call centers to reduce cost, the FCR metric has been an essential method for measuring and managing service and cost.
For the cost-effective delivery of great customer service, many call centers use an "FCR operating philosophy as a way they work for their core people, processes, and technology practices" at the call center and enterprise levels. Below are the top 10 First Call Resolution best practices to increase the FCR rate.
Top 10 First Call Resolution Best Practices
- Measure, benchmark, and track FCR and Csat for all touchpoints
- Recognize and reward employees for FCR, call resolution, and Csat
- Use VoC closed-loop FCR process improvement team
- Create accountability for FCR, call resolution, and Csat
- Agents and managers are hired for being a customer-centric fit
- The performance management system incorporates VoC data
- CRM and KMT are designed to help agents achieve FCR
- Agents can contact subject matter experts in real-time
- Supervisors are trained on how to coach agents for high FCR
- QA evaluations include customer surveys and call compliance data
What Affects Call Center First Call Resolution for Improving or Achieving a High FCR Rate?
There are many challenges to 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:
- A customer needed to verify or check the status of their unresolved issue
- While the customer was on hold, they got disconnected
- Agent lacked the knowledge to resolve the issue
- The customer request was not done
- 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 a call center's FCR rate, including agent turnover, call volume, average handle time, calls transferred, work from home (WFH), labor shortages, and agent training. SQM also believes that the number one hindrance in 2022 to achieving a high call center FCR rate is the historically high agent turnover rate of 35%.
2. Why is First Call Resolution Important?
At SQM, we are often asked, "Why is call center First Call Resolution important?" The answer is that FCR is not only a measure of customer service effectiveness but also measures a 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 call center 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 leading predictor for business outcomes due to their CX. 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.
Customer relationship metrics such as Csat, referrals, and retention are lagging KPI outcomes and cascade from call resolution and FCR leading KPIs. Another essential point is that the correlation between the FCR and call resolution leading metrics and lagging metrics (e.g., Csat, customer referrals, and retention) is among the highest for 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. The general belief with the call center FCR metric is that it is a good indicator of a company's policies, procedures, and technologies efficiency and effectiveness for CX delivery.
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 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.
First Call resolution rate can be challenging to define and calculate. The main reasons the FCR rate is challenging are to nail down the criteria for defining it, measuring it, and determining when a call is resolved (e.g., 5 to 30 days from the initial call).
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™ Customer Service QA software to measure FCR.
Below are the common practices for measuring and calculating external and internal First Call Resolution rates.
First Call Resolution - external measurement is considered the most accurate method for measuring and benchmarking FCR. In addition, 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 have 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.
First Call Resolution - internal 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 rate, in most cases, is not benchmarkable against other organizations' call centers.
It is common for the internal FCR measurement to use automatic call distribution, 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 call-back 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
- Dependency of IT department to retrieve required data for surveying
- 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 First Call Resolution Rate Calculation
To determine the average internal First Call Resolution rate: customers who called back are identified using Automatic Call Distribution (ACD), case management, 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.
For example, 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.
Organizations must define, measure, and calculate their call center FCR internal 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 (6,500) divided by the total number of calls received (10,000) = a First Call Resolution rate of 65%.
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) = a 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 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 ACD, case management, and CRM technology. Listed below are the pros and cons of using a repeat call technology method to measure First Call Resolution.
Pros with the internal measurement method are:
- Utilizes existing ACD, QA, 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 company standards determine 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 FCR
4. How to Improve First Call Resolution?
First Call Resolution Improvement Tips
It is often said that measuring First Call Resolution accurately is hard 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 by 5% or more in a given year. SQM's First Call Resolution tips have a proven track record for helping clients improve their FCR rates. 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:
1. Measure First Call Resolution Rate
Measure, benchmark, and track the First Call Resolution rate continuously using external and internal measurements. Common examples of internal and external FCR measurement methods are:
Internal: ACD, QA, case management, and CRM
External: post-call phone surveys and email surveys
2. Identify Repeat Call Reasons
Identify repeat call reasons using a post-call survey to identify customers who did not achieve First Call Resolution and ask them open-ended questions about why they could not resolve their interaction on the first call. For identifying repeat call reasons, use the survey feedback, CRM, case management, call recording, and speech analytics to review and analyze those calls. Using survey feedback supplemented with CRM, call recording, etc., for the same call will provide in-depth insights into repeat call reasons. Develop repeat call reason categories and then tag customer feedback into repeat call reason categories (e.g., agent soft skills, billing, the status of the inquiry, complaint, agent knowledge, and First Call Resolution training).
3. Determine Repeat Call Reason to Improve
Identify which repeat call reasons to improve by leveraging the data identified in the repeat call reason categories. Targeted opportunities for improving a specific repeat call reason should be based on high-frequency and low customer satisfaction criteria. In addition, it is essential to improve on only 2 to 4 repeat call reason categories at a time.
4. Develop Action Plan to Improve First Call Resolution
Use a VoC closed-loop improvement process for First Call Resolution. Develop an action plan based on the top repeat call reasons identified. The action plan should include the 5 W's (i.e., what, when, who, why, where) and how. The action plan will need to be reviewed and championed by senior management or a steering committee and include First Call Resolution scripts, tips, training, and coaching for agents.
5. Determine First Call Resolution Improvement Goal
Determine your FCR goal by conducting a call center First Call Resolution benchmark of your FCR rate using an external measurement method with a 3rd party specializing in First Call Resolution research. Then, based on your current FCR rate, establish an FCR rate improvement goal for the call center. Many call centers' FCR goal is to strive for the call center industry's good FCR rate of 70% to 79% or the world-class (80% FCR Rate) standards. A conservative FCR improvement goal is 1% to 2%, a moderate FCR improvement goal is 3% to 4%, and an aggressive FCR improvement goal would be 5% or more. A best practice is to hold all employees (e.g., CEO to Agent level) accountable to the First Call Resolution or a call resolution goal. In most cases, Agents are held accountable for the call resolution metric.
5. How to Measure First Call Resolution Using Custom Service QA Software?
Customer Service QA Software
Now that you have read about the business case for why FCR is so essential, let's cover how to capture, analyze, report, and improve FCR using our mySQM™ Customer Service QA software.
mySQM™ QA software is often called customer service management (CSM) or customer experience management (CXM) software. mySQM™ software is built explicitly for call centers. mySQM™ software helps supervisors improve their coaching effectiveness and empowers, recognizes, and engages agents by providing them real-time FCR feedback, quality assurance, coaching, and recognition features to deliver great CX.
Capturing, measuring, tracking, and benchmarking FCR using mySQM™ software is only part of the broader picture for delivering great customer service. For example, measuring First Call Resolution can be complex.
As a result, it is essential to measure multiple metrics to get a comprehensive picture of customer service delivered by the call center. For example, FCR and call resolution metrics are leading indicators, and when these metrics are high or low, so is customer satisfaction (e.g., lagging metric). Therefore, mySQM™ QA software is designed to measure, track, benchmark, and improve Csat, first call resolution, the net promoter score, customer service, quality assurance, and employee experience.
To keep up with customer expectations, understand performance, and improve FCR and Csat, a call center needs to use CSM software to employ a VoC closed-loop (i.e., identify, develop, check, and act) program.
Again, CSM software is an excellent tool for capturing, measuring, benchmarking, and reporting customer service delivery. However, before choosing a CSM software vendor, you must 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.
- Does your call center need a VoC closed-loop process at the agent and supervisor level? For example, can agents or supervisors follow up on customer feedback to close the loop?
- Who will be accountable for FCR, call resolution, and Csat results (e.g., agent to CEO)?
- Do you need to know the supervisor's customer service QA effectiveness for coaching agents to improve their performance?
- Do you want to capture, analyze, and report internal (e.g., QA, call handling) data and external (e.g., post-call survey) data in the same software platform?
- Do you want the CSM software capabilities to include agent coaching, follow-up, and recognition?
- Do you want your CSM software capabilities to recognize agents for their call resolution and Csat using a debit card that gives them dollars for high CX delivery and instant gratification?
- Do you want to use internal and external data for the same call for measuring, benchmarking, and coaching agents?
- Where are the gaps in customer service understanding? For example, consider all touchpoints (e.g., phone, email, chat, IVR, website), job levels (e.g., agent to leaders), 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 and supervisors be fully trained to analyze and report 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 C-level?
- 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?
First Call Resolution Learning Options
Want to learn more about FCR without reading this blog? Click on the FCR video or FCR PPT to learn more about defining, benefits, measuring, and tips for improving the FCR rate.
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.