The Value of First Contact Resolution

By: Sohail Qasim, Sr. Global Marketing Manager, Portfolio and Offer Management, Siemens Communications, Inc.

First Contact Resolution (FCR) is not a new paradigm. However, in today’s fiercely competitive market it plays a significant role in driving customer satisfaction and retention, cost reduction and considerable contribution to the profitability of the enterprise.

What is First Contact Resolution?

First Contact Resolution is defined as a customer’s inquiry or problem that is resolved in one contact and is measured as a percent of time the contact is completed fully on the first contact. This could be done through an immediate consultation with a subject matter expert or someone with the authority to make a decision. This measure may vary by industry and contact type and is best developed based on a clear understanding of the customer expectations.

Why is First Contact Resolution Important?

First contact resolution rates vary by industry and contact type, however, all are measured based on one thing – customer satisfaction. Consider the following:

• “ … the absence of first call resolution has been found to account for up to of 30% of a call center’s operational cost …” – Niels Ashgrove - Call Center Managers Forum
• “ … the inability to reach the right person with the right information drives 60% of customer service dissatisfaction … “ – Center for Customer Driven Quality, Purdue University, USA
• “ … customers who experience problems that are dealt with quickly and easily have a repurchase intention rate of 89% …” – Center for Customer Driven Quality, Purdue University, USA

How to Achieve First Contact Resolution – By Design?

An extremely important First Contact Resolution enabler in today’s dispersed and mobile enterprises is the ability of an agent to selectively contact other employees to find answers to the customers’ issues. This can be achieved through robust presence and collaboration tools that allow agents to reach through out the enterprise for help to meet its predefined standards of customer satisfaction through First Contact Resolution.

Additionally, other elements should be designed into the contact center to achieve an optimal level of First Contact Resolution. These include:

• Clear understanding of customer expectations regarding the level of FCR
• Access to right skills
• Presence & collaboration-based tools
• Agent training and experience
• Established processes & policies
• Systems & data integration

How to Measure First Contact Resolution?

First Contact Resolution is achieved even if the contact needs to be fulfilled by another employee or department as long as the customer does not have to call back on the same inquiry or problem. However, the important thing to understand is that the customer determines whether First Contact Resolution is achieved, and not the organization.

Tracking First Contact Resolution should be a top priority of any contact center. First Contact Resolution performance is based on percentage of contacts that are resolved on the first contact. Some methods that can yield concrete information and insight into customer expectations, company standards and the gap in between are:

• Agent reported call wrap-up and reporting
• Quality and silent monitoring for all media
• End-of-call customer polling through agent script
• Automated IVR survey
• Online surveys
• Follow up after customer contact

Let’s illustrate the importance of First Contact Resolution with an example. Assume a scenario of a contact center where the agents handle 200,000 customer issues per month. A certain portion of these issues are resolved after multiple contacts because the Agents are not able to access resources and people who could help them in the process.

An estimated 15 percent of customer issues are resolved through two contacts, 10 percent require three contacts, and 5 percent require four or more contacts. This creates an additional contact load of 100,000 contacts. Assuming the cost of $6.50 per contact incremental cost of handling the repeat calls would be $650,000 per month or $7,800,000 per year. If this contact center can reduce the repeat calls by merely a 15 percent it will save $1,170,000 annually!

Let’ reinforce the importance of FCR with the illustration above and calculate the loss of revenue if the customer does not experience a First Contact Resolution. Let’s estimate that the half of the 5% customers (=5,000 customers) who have to make four or more calls decide to take their business else where. If every customer is worth $200 / year, these 5,000 per month loss of customers represent a $12,000,000 per year of business.

All of a sudden First Contact Resolution takes on a new meaning!

If the enterprise was using Presence enabled solutions that help the contact center agents in resolving customer issues in the first contact it would be able to substantially add to its bottom line.

Conclusion

While the level of First Contact Resolution varies with industry and the media type it is easy to recognize that facilitating it will benefit an enterprise. It is an imperative to listen to the customer’s voice to define the standards of operation. Whatever these standards, their achievement is facilitated through solutions that allow resources beyond the contact center to participate in the process. Enterprises stand to lose substantial cost savings and revenue opportunity by selecting the wrong or inadequate solutions. Becoming conscious of this is the first step in the right direction.

For more information on this topic, you may want to listen to an On Demand Webcast.