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Benefits from Gains in First Contact Resolution
Customer satisfaction
Empirical research conducted by the SQM Group (Service Quality Management Group, Inc.) showed that every 1% gain in FCR translates into a 1% gain in customer satisfaction. The SQM Group has conducted benchmarking studies for ten years. According to Mark Desmarais, company president, “The measure we believe is most important for measuring and managing call center customer service is – you guessed it – FCR.” Dr. Jon Anton and his team at BenchmarkPortal found that “First/Final” had the strongest positive correlation with customer satisfaction. Finally, strong anecdotal evidence comes from Judy Monger, president of Customer Relationship Metrics. Her company is a recognized leader in customer satisfaction measurement. According to Judy, “Field experience in measuring customer satisfaction indicates that caller satisfaction—both with the CSR and with the company in general—will be 5 percent to 10 percent lower when it takes more than one call to solve the issue than it is when the issue is resolved on the first call.”
Cost savings
According to extensive international research performed by Cornell University the percentage of interactions that are fully resolved while the customer is on-line varies from a low of 58% for contact centers engaged in problem solving work such as technical support, to a high of 80% for centers engaged in basic query-response calls such as taking orders, upgrading services, and answering billing questions. In general, 25 – 30% of queries are follow-ups to prior contacts. Assuming that your agents average about 1200 calls per month and the FCR is 75%, then one-fourth or 300 calls per month are follow-ups. This translates into a direct labor cost of $1.9 million per year for a 200-agent contact center.
By reducing the ratio of repeat calls by only five percentage points, from 25% to 20% the contact center would save $389,120 annually, or the equivalent of ten full-time agents. This analysis considers only direct labor costs. Factoring in network services costs, seat licenses, service contract fees, hardware, training, internal IT support costs, facilities, and supervision nearly doubles the potential savings. Further, the cost of handling a call increases dramatically if it has to be escalated. Work by Resource International, an Australian firm, found that in the insurance industry the cost of a claim call increases by 650% if it has to be escalated to a senior manager. Some of this cost is attributable to the re-work required to unravel a botched interaction.
Revenue growth
It only makes sense that callers will be more amenable to up-sell and cross-sell attempts if they are pleased with the way their initial query was handled. According to the SQM Group “When a customer call is resolved you increase customer cross sell acceptance rate by 20%.” In the Genesys Global Consumer Survey sponsored by Genesys Laboratories, it was found that 75% of global consumers would do business with a company based on a great call center experience and 50% said the last time they stopped doing business with a company was partly or wholly due to poor customer service.
Causes of Repeat Calls
The case for FCR improvement is compelling. The next question is what can the contact center do about it? Our research identified several causes, or “drivers”, of repeat calls.
Long holding times
Callers that have been holding for what (in their view) is an excessively long time aim “to get their money’s worth” when they finally connect to an agent. For example, if the original intent was to call their cable provider simply to upgrade their service package, and they called the special promotional number cited in the latest ad campaign or chose the “service upgrade” option on the VRU, by the time they get to a live agent they are loaded for bear. They will have additional questions about billing, service policies, digital telephone transition, and how to operate the TV remote. The harried agent, not an expert on everything from billing cycles to FCC regulations and pressed to meet handle time targets, may simply sign the customer up for the upgrade and suggest the customer call back later on a different toll free number or make a different selection from the IVR menu.
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