What is meant by First Contact Resolution?
First contact resolution (FCR) is the proportion of customer inquiries that are resolved by support at the first attempt. When measuring first call resolution, follow these steps:
- Count how many inquiries were solved in one interaction.
- Count the total number of requests.
- Divide the number of solved inquiries by the total requests.
The “first attempt” means it only takes one call, email, social media message, or chat to solve a problem well.
As most customer contacts are still made by a phone call, this rate is also known as First Call Resolution rate.
How do you calculate FCR?
The FCR is easy to calculate. When measuring first call resolution, divide the number of inquiries that could be resolved with a single interaction (a customer call, an email inquiry or a chat session) by the total number of requests.
The formula is as follows:
FCR = number of tickets resolved on the first call (or interaction) / total number of tickets received
What is a good first resolution rate?
The industry standard for first-time resolution rate is 70 to 79 percent. If you land in this range, you have every right to be happy about having achieved a good FCR.
According to the call center company SQM Group, values of 80 percent and higher are “world class”. Only five percent of call centers worldwide achieve this. Conversely, values of less than 70 percent indicate that improvement is needed.
However, experience shows that these benchmarks tend to be set a little too high for FCR. People who score below this level do not always provide “poor” service. This is just one of many key performance indicators (KPIs).
In addition, the FCR achieved depends on many factors. For example, a good value could simply mean that there is insufficient self-service. Customers may be turning to support with simple, very easy-to-solve inquiries. This would inflate the rate while still leaving room for support to make improvements.
Why is the first contact resolution rate important?
First contact resolution can serve as an important metric for service quality. Many call centers work with this metric as customers expect a quick resolution to their issue when they contact them. Any delay causes additional frustration. This is especially true when customers have not made progress using a knowledge base or an AI chatbot.
With a good FCR, companies know that customers are receiving quick resolution to any issue. This contributes to their satisfaction.
In fact, the FCR can often be used as a KPI to indicate customer satisfaction, as it contributes to this to a certain extent. Companies can also collect a Customer Satisfaction Score (CSAT) separately. This helps to show that a positive first solution rate also contributes directly to a favorable value.
FCR: the pros and cons
First Contact Resolution is undoubtedly an important metric for contact centers. However, companies should by no means focus on it alone. It should be used with other metrics to make reliable statements about customer service quality and customer satisfaction.
Advantages
Here is an overview of the most important advantages of using FCR as a metric.
- Importance for customer loyalty: A high FCR rate correlates positively with good customer satisfaction. As customers appreciate quick solutions without having to make repeat calls. The first resolution rate highlights an important aspect of customer service management. If this is fulfilled, they are much more likely to remain loyal.
- Correlation with costs: First contact resolution is directly related to business costs. When a good FCR eliminates repeated inquiries, this reduces operating costs. Support teams can invest their manpower elsewhere.
- Statements on service quality: A high FCR value shows that service teams work well. It means they have the right information and are well trained. This is true even if the figures should sometimes be treated with caution. Validation by other key figures is often required in order to be able to make reliable statements.
- Influence on support teams: Support staff often feel frustrated when they have to deal with angry customers for a long time. A good first resolution rate therefore means less stress, less strain and a greater sense of achievement.
- Competitive advantages: Companies with a better FCR rate than their competitors have an edge in customer service. There are also indirect competitive advantages if companies use FCR values for targeted improvements.
Disadvantages
First Contact Resolution only sheds light on part of the truth. If companies rely solely on this key figure, misunderstandings can quickly occur when evaluating the service provided. As a result, the quality of service can even decline.
Caution is advised in the following cases:
- Complex cases: An immediate solution cannot be achieved for every problem. If there is too much focus on FCR, complex inquiries might not get enough attention. They may not be prioritized as they should.
- False signals: If companies only look at a high first resolution rate, they may think the service is good. In fact, there may not be enough self-service options. As a result, customers often ask employees simple questions.
This does not lead to high customer satisfaction. It can also make companies feel falsely secure.
- Distorted value. Many companies set a high FCR rate as a goal. This leads employees to close tickets too soon to meet the target.
However, problems are often not yet solved and customers turn to support again in anger. Mistakes also occur if, for example, it only becomes apparent later that certain solutions were inadequate.
- Need for quality: Closing inquiries (tickets) too soon can mean not giving a complete solution. Some customers also want comprehensive advice. To drive quality service, understand FCR in relation to other important objectives.
- Unfair assessments: Complex cases naturally take longer to resolve. If service employee evaluations are based solely on FCR, performance quality may be skewed for those team members who are responsible for more complex cases.
Conclusion: advantages vs. disadvantages
First contact resolution has earned its place as an important service management metric. However, users need to consider it in combination with other important metrics. Only then can a reliable overall picture of service quality be obtained. After all, FCR measures a large and crucial piece of the puzzle, but not the entire thing.
5 best practices for FCR
When used correctly, first contact resolution makes a lot of sense. The following best practices are important building blocks and optimizations.
#1: Choose targets wisely
A “world-class” FCR can be an important goal, but this does not necessarily have to be the case. A high level of customer satisfaction is the overriding goal. This is measured with values such as the Customer Retention Rate (CRR). Companies should ask themselves to what extent a good first solution rate contributes to this.
At times, other metrics might matter more. Consider objectives such as customer service quality, shorter waiting times or good escalation management (for many complex cases) could be better objectives. However, if customer satisfaction is largely dependent on immediate problem resolution, the FCR proves to be spot on.
#2: Working with a knowledge database
Teams are strong when they work together. Agents can benefit when they have access to the relevant knowledge of other team members. A knowledge base can contain solutions to problems, instructions, how-to descriptions and solutions can be easily accessed.
This has considerable advantages for improving first call resolution. This is especially true in the case of recurring problems. Employees are more likely to be able to solve them at the first customer interactions. If knowledge is important for support cases, such a database fulfills an extremely helpful function.
#3: Combine FCR with other metrics
First Contact Resolution only represents part of the truth. Viewed completely in isolation, it provides little insight.
In combination with the following metrics, the FCR can paint a clear picture:
- Customer Satisfaction Score (CSAT): This measures customer satisfaction via a short survey. It may, for example, ask customers to rate service on a scale from 1 to 5.
- Net Promoter Score (NPS): This metric is used to determine how likely a customer is to recommend the company to others.
- Time to Resolution (TTR): This is about the average time it takes for a problem to be resolved.
- Ticket Response Rate (Reopen Rate): This shows how often closed tickets are reopened. It helps to indicate poor quality problem resolution.
- Compliance with service level specifications: Service level agreements (SLAs) should definitely be adhered to by support. For example, there may be specifications for response or resolution times and the availability of support.
Depending on the individual objectives, other metrics can also prove to be extremely useful and helpful.
#4: Introduce automated ticket routing
If you want to resolve customer issues immediately, it’s a good idea to use new tools. For example, customer contacts are not usually created according to a fixed, expertise-based organization. Tickets could be sent to employees who may not be the best contacts for the relevant topics.
With automatic ticket routing, employees with the right skill sets are assigned cases automatically. This immensely increases the likelihood of a first contact resolution, even for challenging issues. Having the right person work on a case leads to higher FCR and improved customer satisfaction.
#5: Improve the recording of first contacts
It has already been discussed that FCR rates can be deceptive. Many apparent first contacts are actually follow-up inquiries. For example, a customer may first try to get help from a self-service portal. If that is not satisfactory response, they many then open a ticket with an agent.
It is therefore important to classify processes correctly and record unbiased FCR rates. The following can help:
- Consider the entire customer journey
- Link data from self-service portals, chatbots or knowledge databases
- Define the FCR in such a way that self-service attempts also count as initial contact
- Ask the respective customer directly whether a solution to the problem has already been worked on beforehand
- Introduce additional metrics such as the Self-Service Success Rate (SSSR)
- Optimize the self-service area where appropriate
Conclusion: First contact resolution – yes, but correctly categorized
Most customers expect quick, immediate solutions. Against this backdrop, a solid first contact solution proves to be valuable. First contact resolution therefore proves to be an important metric and a crucial building block for customer satisfaction.
However, users should always consider the entire context before prioritizing FCR. Examine values in relation to other metrics. There could be a reason for lower values, such as an inadequate self-service offering.
First contact resolution should therefore be used sensibly in customer service. This includes realistic targets and unbiased data collection as well as clever measures to achieve the highest possible values.
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