Understanding your Contact Center Costs - FCR (First Contact Resolution)

By Colin Taylor (originally posted on the Taylor Reach Blog)

Contact centers are always striving to improve efficiency, increase customer satisfaction and deliver a superior customer experience. Technology is frequently the strategy employed to achieve this goal. While technology can certainly support improvement in all three areas, improvement can also be realized through increasing First Contact Resolution or FCR.

FCR is a contact center performance metric that identifies the center’s ability to resolve an inquiry on the first attempt. While not a true measure of customer satisfaction, as the customer is not always asked if they are satisfied, or if the interaction met their need, it is nonetheless indicative of satisfaction for both your customers and your agents.

Whenever anyone reaches out to a contact center, they are looking to get “something done.” Completing that “something” to the satisfaction of the customer is resolving the reason for the inquiry. That is why contact centers exist, to resolve questions, issues, and inquiries. Those who can get what they want to get done, on a call or interaction will tend to be more satisfied than those who don’t. So, the higher your first contact resolution rate, the higher the satisfaction levels you will tend to see from those customers.

There are a number of ways to measure FCR. The simplest may be to ask if the interaction resolved their inquiry, though that will not surface, and gaps between what the customer expects to occur and what does. Agent disposition can be similarly biased, as agents may disposition interactions as resolved, to avoid scrutiny of their interaction. Many organizations will define a time period of say 48 or 72 hours. The logic in this approach is that the agent will know the next steps that have to occur in the process and should be able to advise the customer So, that there are no surprises. Hence, any callback within that window is presumed to have failed to provide all of the appropriate guidance.

If the interaction with the contact center fails to resolve the question of the inquiry, what is likely to happen? Yes, the customer will probably contact the center again. There can be a wide range of reasons why a contact may not be resolved. There may be an unanswered question, the customer may have felt the agent did not understand them, the customer may be expecting one outcome but later find out that the outcome was not what they were expecting, or it could be agent error. Regardless of the cause, a second contact is going to do a few things. First, it is going to increase the cost to support that customer and get them an answer to their query. Second, the customer experience will suffer, and lastly, customer satisfaction will be harder to achieve than it was on the first contact.

The cost of a second contact can be calculated in many ways. On a global level, some centers take the fully-loaded costs of the operation and divide that by the number of customer contacts and then use this cost as the incremental cost associated with each subsequent contact on the same issue.

So, let’s say the total cost to operate a center is $10 million per annum and they get one-million interactions annually, the cost is $10 per interaction. Therefore, each time the center fails to resolve the issue on the first attempt, there is an additional $10 cost.

Of course, a 100% FCR is unlikely, but we will use this for the purpose of illustration. In this center, a 75% First Contact Resolution rate, would have a $2.5 million cost penalty versus a 100% FCR. Research published by SQM in 2021 showed that the “FCR performance range for the overall call center industry is between 44% and 92%, with 71% being the benchmark average.” Of course, this means that 29% of customers had to call back to try to resolve their issue.

Research has shown that just having a strategy or program to improve FCR will improve results, due to increased attention by leaders and agents alike.?So, if you don’t have one today, create one, and

• Identify how you will measure FCR; determine how this will be tracked, what data & calculation is needed, or whether the measurement will be client survey-based (phone/email, etc.).
• Analyze the reasons why FCR is not occurring today; is it certain call types, is it your company policies & procedures, is it lack of agent knowledge/training. What factors would hinder achieving improved FCR? Customer feedback and recorded call review can help to spot behaviors that may be impacting FCR.
• Define the strategies you will embrace to improve FCR. The improvement strategies can involve additional agent training or coaching, but it may also involve clearer or more details information on the website, in company policies, and the product instructions. Remember ambiguity creates confusion and confusion leads to customer interaction.

FCR is a powerful metric that gauges your ability to meet your customer needs and improving FCR saves money, and increases customer satisfaction and loyalty. It may not be the only metric you need, but it is certainly one that you will want to watch.

Taylor Reach has partnered with Contact Babel on a major research report on FCR. This free report covers historical & real-time speech analytics, text, predictive, screen, back-office, VoC and customer journey analytics. To find out more, download your copy HERE today!

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