What is FCR?

What is FCR?

First Call Resolution/First Contact Resolution/ (FCR) is a performance criterion related to the capacity to meet the requests of the customers in their first contact with your company. By measuring FCR, the customer service management determines how quickly a company creates solutions for customers. Focusing on improving this measured rate on a daily basis is one of the most widely accepted facts of long lasting customer satisfaction.

Being intensely used in the call center industry for around 25 years, initially, the FCR was only a measure to evaluate the performance of customer representatives based on “calls.” However, following the transition of customer services management to omnichannel standards, today, it is widely used to measure the ability to provide first-contact solutions to customers through all communication channels.

A 2021-2022 report by Contact Babel, an independent research company that attracts attention with its research in the Customer Experience Management (CX) field, demonstrates that 93% of the customers who communicate with call centers expect to have a first-call resolution for their problems.

FCR makes customer experience performance scalable, is one of the fundamental indicators of operating cost efficiency, and provides insights into the organizational improvement areas. Thus, experts define FCR as a “miracle criterion” among all customer service management performance criteria. Also, it is one of the leading company scorecard metrics which attracts the most attention across all industries.

In the most exclusive and broad sense, we can define “First Contact Resolution” as solving a problem via all communication channels without the requirement to start a second method of interaction regarding the same problem.

Why is First Call Resolution Important?

While customer service and customer experience managers strive to find solutions to ensure customer satisfaction and loyalty, they also tread a fine line between activities that can be regarded as complete opposites, such as increasing company income, improving operational efficiency and employee engagement. Fortunately, no rational customer services operation today seeks to accomplish goals such as shortening call durations and improving call efficiency which will result in the direct loss of the customer. Today, the most critical focus area of the entire business world is to increase the satisfaction and loyalty of existing customers to develop new customer potential continuously. Thus, FCR may be the most important of the three essential criteria that companies closely follow.

Understanding the customer’s request upon the first contact and handling the request to provide a solution as soon as possible is the essential indicator of customer service management success. This success, not only provides a positive experience for the customer, it also lowers total issue costs by eliminating additional interaction costs that will occur for the same request of the customer. A 1% increase in FCR means a 1% reduction in all interaction costs.

We see that customer representative loyalty is also high in customer service operations where the first contact resolution rate is high. Therefore, we can say that FCR has a positive effect on employee satisfaction. We should also note that companies with high cross-selling and promotion rates also have high FCRs.

From the point of view of customers, the result is not much different. Now put yourself in your customers’ shoes and answer this question: What are the top 3 factors that are most important to you when contacting a company by telephone or digital channel?

According to the results of the research conducted on a sample of 1000 people in 2021, 46% of the participants aged 18-44 stated that finding a solution at the first contact was the most crucial factor, while this rate was 69% for the 45-65 age group. This research shows that businesses and consumers agree that first-contact resolution is the most important factor influencing customer experience when communicating with a company.

How is FCR Calculated?

Unfortunately, there is no generally accepted standard calculation formula for FCR. It basically depends on which FCR calculation related values are included.

At its simplest, first contact resolution is the ratio of first-contact resolutions to all issues received by the company in a defined period (day/month/year).

By internal sources, we mean data you will get from your CRM. To determine how many issues in the customer issue pool are solved upon first contact, we should deduplicate these issues and only consider the exact solutions created at the 1st level.

By external resources, we mean calculating the first contact resolution based on the customers’ answers in the surveys conducted after the call. In a separate interaction with the customer following the call, we ask the customer if the customer representative managed to solve the issue in the last call. FCR is calculated according to the answer.

What complicates the FCR calculation at this point is to identify what is included and not included in this calculation. For example, if the customer contacted a wrong department, should this be included in the first contact calculation? Or, can it be considered as the first contact when the customer is directed to a 2nd level working group that will create the exact solution for his/her request, and when that group communicates with the customer through a different channel and solves the problem?
What matters here is that you decide what to take into consideration and what to include or exclude, and to make your periodic measurements consistently.

One of the challenges of calculating FCR has to do with how to determine whether the problem has actually been solved. Because, especially in call centers, due to the performance pressure on customer representatives, you can guess that most of the time, the customer’s issue is not solved, but customer representatives report the issue as if it has been solved. For this reason, we cannot consider that the requests are met without a clear approval from the customers. If a question is marked as answered or an issue is marked as resolved and closed without the customer’s explicit approval, it will only lead to more unhappy customers and an increased number of recurring calls.

In this respect, you can use issue reopening rates as a control mechanism for an objective FCR account. Reopening a closed issue is actually an indication that that issue was not resolved upon the first contact. For this reason, you should define a period for reopening of closed issues and analyze it by focusing on the reopened records during this time. Along with sectoral differences, this period should not be shorter than 24 hours but not longer than 48 hours, either.

Although there are attempts to differentiate the FCR account, in particular the one for the technical support, along with sectoral differences, the important thing is that the customer’s question or problem gets a first call resolution. Regularly monitoring the FCR with a certain consistency will be the guidance required for the business’s customer-centric transformations.

Contrary to popular belief, it has been observed that there has been a decrease in FCR in recent years. This is due to the fact that more denominators have emerged. While the number of solutions created for customers in customer services increases day by day, FCR decreases proportionally as the demand for customer service increases even faster. In addition, due to the widespread use of self-service channels and their increasing impact, we face more challenging and technical demands for live support, especially through call centers or digital channels. This is of the factors that make it difficult to increase the rate of FCR.

So, what should be the ideal FCR rate?

First contact resolution cannot be expected to be 100% in any sector or any company. However, it is not needless to expect continuous improvement with a certain consistency. Reports that can be used for sectoral comparisons are easily accessible. The industry standard for FCR in general is around 70%-80%.
Even this rate means that between 20% and 30% of customers contact you again to resolve their issue, and you can imagine how high the related cost is.
An FCR below 70% indicates an issue to consider. Above 80% is an ideal level. However, companies that exceed this rate in the field of customer services do not exceed 5% of the entire sector.
However, it should be noted that the FCR rate varies according to communication centers, interaction channels, issue types, industries, and products.

How to Increase FCR?

As simple as measuring and analyzing the first contact resolutionis, raising the FCR is that much more difficult and requires dedication. We see that most of the CX managers are incompetent in this area and lack the necessary know-how. The Customer Experience Maturity Model, implemented by Next4biz's experienced teams with sectoral expertise, after evaluation and analysis studies, offers us a proven roadmap for the development of FCR.

1.Perform multidimensional FCR measurement: Probably the most well-known motto of business management is “you can’t manage what you can’t measure!”. Create a periodic FCR report based on product, channel, personnel, and service point and follow up the results in the light of the survey results made both with internal resources (operational reports created with CRM data) and following customer interaction (SMS, email, IVN, etc.).

2.Identify the causes of recurring customer contact: Use dynamic surveys with open-ended questions where you can find out why the customer contacts you again and objectivize the root causes.

3. Identify areas of improvement for recurring issues: In order to eliminate the reasons, you have identified, list the main improvement areas in order of importance with reference to their impact on customer satisfaction.

3. Prepare an implementation plan for the FCR: Plan a transformation process for improvement areas. Make sure that this process develops into an implementation plan created with the support of senior management.

4. This plan will include changes in your products and services, as well as organizational differences in your corporate culture and practices.

5. Set an first contact resolution development goal: Set a clear FCR increase target for your organization, taking into account the research results in industry standards. This target should be between 1% and 5%. Continuously monitor and analyze the progress status according to this goal.

What are Next4biz’s Domains of FCR?

• Next4biz allows companies to offer a “true omnichannel” experience for their customers. Managing all communication channels as a single and holistic channel makes it possible to handle all requests of customers from all channels at once and without being overlooked.
• The categorical infrastructure of Next4biz ensures that all issues are resolved with data fields that can be customized according to the source, subject, type, and response preference of the customer. If any data fields are needed for any subject, the customer representative creates a solution by fully utilizing the relevant guiding data fields.
• This rules out the possibility of customer representatives working with artificial intelligence support to incorrectly determine the category of customer issues, and therefore the risk of providing wrong/incorrect solutions.
• First-level service makes the job of customer representatives easier. Customer representatives can immediately find answers to all questions of customers upon the first contact by using Next4biz’s instantly updated Knowledge Base.
• With the Next4biz agent scripting module, which guides the initial dialogue with customers step-by-step, conversation scenarios, information to be obtained from the customer based on the scenarios, and answers to customer questions are defined on Next4biz, the only screen of customer representatives. With Next4biz, a complete information flow and an error-free customer experience are built.
• Thanks to Next4biz’s ability to integrate with all corporate applications, all kinds of technical information that customers may need at the first contact are presented on the Next4biz single screen. Thus, customer representatives do not get bogged down across different applications or must forward customer issues to other business units for a solution on different applications.
• Thanks to the effective self-service interface, customers can create their own requests on the web page and become a part of the solution. Thanks to the know-how feature of the same self-service interface, customers can easily find answers to all their questions, and customer issues resolve before they occur.
• Customers are proactively informed with automatic customer notifications and recurring records are concluded with follow-up calls defined as foam calls.
• Managing the customer experience end-to-end on a single and holistic platform makes all elements of this experience measurable in all its details. With the Next4biz reporting infrastructure, high-level performance results can be monitored, and detailed root-cause analyzes can be made step by step. Thus, with the reporting and monitoring of the FCR, the true reasons for recurring calls can be easily recognized.
  Next4biz realizes all of these by utilizing code-free adaptation technology that facilitates rapid implementation in accordance with the spirit of the times.

Customers have an idea of the brand from the first time they encounter brands, and this idea differentiates and matures with every interaction with the brand. In fact, a brand is simply a label for the product or service. The most valuable feature of any product and service of any brand is the uniqueness of the experience it offers to the customer. The feeling of trust created by offering a solution that will meet your customer's expectations the first time they reach out in case of need is invaluable. So, in order to create this invaluable value, can you support your customers with the right first contact solution?

Gürkan Platin

Gürkan Platin, a graduate of Hacettepe University Management and Organization, worked as a manager in various positions at Mensan, Citibank, Garanti Bank and Credit Registration Bureau, respectively. Platin has been blogging since 1996 and his articles are published in various national and international publications.