Impact Learning Systems


Does First Call Resolution Lead to Customer Loyalty? Peggy Carlaw

It’s long been thought that first call resolution is one of the main drivers of customer satisfaction. SQM’s pioneering research found that for every 1% improvement in first call resolution (FCR), there’s a corresponding 1% increase in customer satisfaction. Studies done by Customer Relationship Metrics reveal that customer satisfaction ratings will be 5-10% lower when a second call is made for the same issue. And it’s logical that the more satisfied customers are, the more loyal they’ll be.

The Business Case for First Call Resolution

Not only does it appear that first call resolution improves customer satisfaction, improving FCR also reduces the cost of operations. So there’s definitely a business case for improving first call resolution, and as a result, many companies are investing heavily in both analytics software and customer service training to measure and improve FCR. In fact an ICMI poll reported that in 2008, a little over half of call centers tracked FCR and by 2011, two out of three centers track FCR. But is focusing primarily on first call resolution sufficient to secure customer loyalty?

First Call Resolution and Customer Loyalty

Probably not. What if you have to wait on hold with unappealing music for 20 minutes before speaking with an agent? What if your call is routed to a poorly trained rep who takes longer than needed to resolve your issue, putting you on hold every few minutes to confer with a supervisor? What if your issue is resolved, but the representative is rude?

A Case for the Balanced Scorecard

Bob Thompson of CustomerThink wrote an excellent post about how ScottishPower uses a balanced scorecard to drive customer service excellence rather than focusing on a single metric like first call resolution. ScottishPower’s scorecard includes:

  • Short IVR surveys asking customers for their experience on the call
  • A Customer Contact Resolution metric
  • A retention score to determine the likelihood the customer will leave within 5 weeks
  • Average handle time
  • Cross-selling performance

Other customer-focused metrics that might be included in a balanced scorecard include:

  • Average time on hold (callers don’t like waiting on hold)
  • Appropriate escalations (those that will help the call be resolved quicker)
  • Call quality scores (assuming your monitoring form includes customer-focused metrics)
  • Employee satisfaction (happy employees provide better service)
  • Employee turnover (employees with more experience provide better service)

While first call resolution is a key metric that is important to focus on in order to improve customer satisfaction and reduce costs, improving FCR alone is may not be sufficient to increase customer loyalty. If you want to focus on improving customer loyalty, ask a group of loyal customers what is most important to them and where they think you need to improve. Then organize your metrics around those issues and seek improvement there.


Peggy Carlaw is the founder of Impact Learning Systems, a leading training company specializing in improving communications between front-line employees and customers. Peggy is co-author of several books published by McGraw-Hill, including Managing and Motivating Contact Center Employees and The Big Book of Customer Service Training Games.
Peggy Carlaw
View all posts by Peggy Carlaw
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