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The Business Case for First Call Resolution Peggy Carlaw

Cutting costs The Business Case for First Call ResolutionKeep­ing cus­tomer ser­vice costs low while keep­ing cus­tomer sat­is­fac­tion high is espe­cially dif­fi­cult in a strug­gling econ­omy. Many com­pa­nies respond by cut­ting staff in order to meet short-term finan­cial tar­gets. When the econ­omy improves, they then ramp back up in an attempt to regain lost cus­tomers and boost the loy­alty of the cus­tomers who remain.

While this approach can cer­tainly reduce costs, it also reduces cus­tomer sat­is­fac­tion and loy­alty. A bet­ter way to approach the issue is to put more focus on tak­ing care of the customer's issue dur­ing the first call. Improv­ing first call res­o­lu­tion (FCR) not only impacts the cost of oper­a­tions, but simul­ta­ne­ously affects cus­tomer sat­is­fac­tion and reten­tion. By improv­ing FCR and reduc­ing the total vol­ume of repeat calls, you can sig­nif­i­cantly lower ser­vice time and the over­all cost to serve the cus­tomer. From a customer's per­spec­tive, improved FCR trans­lates directly to higher cus­tomer sat­is­fac­tion which ulti­mately impacts the bot­tom line by boost­ing cus­tomer loy­alty and rev­enues. As a mat­ter of fact, hav­ing the issue resolved on the first call has been cited in many stud­ies as being the num­ber one dri­ver of cus­tomer satisfaction.

Let's look at a few numbers:

  • Accord­ing to the Yan­kee Group, 30% to 35% of calls com­ing into the aver­age cen­ter are repeat cus­tomer calls that require expen­sive "rework" by cus­tomer ser­vice rep­re­sen­ta­tives. What does this mean to you?
    • Start with your cost per call. If you're not sure what that is, use $5-$10 for a basic con­sumer cus­tomer ser­vice inquiry and $20-$45 for a Level 1 tech­ni­cal sup­port issue.
    • Mul­ti­ply that by the num­ber of your repeat calls. If you don't cur­rently mea­sure, use 30–35% of your total calls.
    • Cal­cu­late what the oper­a­tional sav­ings would be if you improved res­o­lu­tion rates by only 10%

As an exam­ple, let's say a call cen­ter gets 100,000 calls per month. If the cost per call is $10, and 30% of calls are repeat calls, the cost of the repeat calls is $300,000 per month. A mere 10% reduc­tion would yield a sav­ings of $30,000 per month or $360,000 per year. Make the cost of a call $25, and the annual sav­ings would be $900,000.

  • Met­ric­Net's bench­mark­ing stud­ies indi­cate that first call res­o­lu­tion is the sin­gle biggest dri­ver of cus­tomer sat­is­fac­tion. If you want loyal cus­tomers, you need to have cus­tomer sat­is­fac­tion rank­ing in the 90's and MetricNet's stud­ies across all indutries show that in order to have sat­is­fac­tion rates this high, first-call res­o­lu­tion rates must match.
  • Stud­ies done by Cus­tomer Rela­tion­ship Met­rics reveal caller sat­is­fac­tion rat­ings will be 5–10% lower when a sec­ond call is made for the same issue. What would it mean to your com­pany if you could improve your cus­tomer sat­is­fac­tion rat­ings? Here are some facts that will get you think­ing about the answer.

Not sure this can be done? Met­ric­Net reports that call cen­ters that empha­size train­ing (i.e., lots of train­ing hours for new and vet­eran agents) gen­er­ally enjoy a higher than aver­age FCR. Check out Motorola and Alti­tude Soft­ware. These two com­pa­nies recently improved their call res­o­lu­tion rates while simul­ta­ne­ously increas­ing cus­tomer sat­is­fac­tion. With com­mit­ment from the top and a mod­est invest­ment, you can do it too.

And if you have a com­plex sit­u­a­tion where first call res­o­lu­tion isn't real­is­tic, just reduc­ing the time to res­o­lu­tion can make a big dif­fer­ence. Indus­try Week reported on a large auto­mo­tive man­u­fac­turer try­ing to increase mar­ket share in a new mar­ket by estab­lish­ing a strong brand name and a supe­rior cus­tomer ser­vice rep­u­ta­tion. They wanted to deliver high qual­ity ser­vice cou­pled with quick res­o­lu­tion of cus­tomer issues. One of their biggest chal­lenges in achiev­ing their goal of supe­rior cus­tomer ser­vice was the time ded­i­cated to war­ranty claims res­o­lu­tion. Once the issue was addressed, claims res­o­lu­tion time went from 174 days to 52 days. War­ranty costs were reduced by 34% and cus­tomer sat­is­fac­tion sky rocketed.

How do you improve first call resolution?

Unfor­tu­nately, there's no sil­ver bul­let. You need to focus on three areas: peo­ple, process, and product.

Peo­ple

In order to speed call res­o­lu­tion rates, be sure your agents have good lis­ten­ing skills, are focused on solv­ing the right prob­lem, and employ top-notch trou­bleshoot­ing skills. They need to sound con­fi­dent, antic­i­pate related ques­tions that the cus­tomer might have, and follow-through on the com­mit­ments they make to the customer.

Process

Sit with agents and watch them han­dle calls. They need to have infor­ma­tion at their fin­ger­tips if they're going to resolve issues on the first call. That could be as sim­ple as a binder with pro­ce­dures in it or as com­plex as an online knowl­edge base. Look at the accu­racy of the infor­ma­tion they're giv­ing callers. For exam­ple, are agents say­ing the prod­uct will arrive in 5–7 days when ship­ping has changed pro­ce­dures and it's now 7–10? Can you give agents the author­ity to han­dle basic issues-like autho­riz­ing returns up to a cer­tain dol­lar limit-in order to avoid esca­lat­ing or return­ing the call?

Prod­uct

Are you hav­ing qual­ity issues? Is some­thing con­tin­u­ing to fail time and time again? Are peo­ple call­ing back about the same fail­ure issue? If so, what can you do to fix it?

Lis­ten to the types of com­plaints that are dri­ving repeat calls and exam­ine your peo­ple, processes, and prod­uct to see what you can do to improve first call resolution.

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.
3 The Business Case for First Call Resolution
Peggy Carlaw
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  • http://www.megazzano.com/the-business-case-for-first-call-resolution-%c2%ab-customer-service/ The Busi­ness Case for First Call Res­o­lu­tion « Cus­tomer Ser­vice … | MEGAZZANO.COM

    […] the rest here: The Busi­ness Case for First Call Res­o­lu­tion « Cus­tomer Ser­vice … Jan­u­ary 6, 2010 — Work­force man­age­ment in out­bound call cen­tres | Call Cen­tre Helper (0)January 6, […]

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  • yolanda scott

    would like infor­ma­tion on free webinar

  • http://glennfriesen.com Glenn Friesen

    Yolanda,

    Thanks for your inter­est and help spread­ing the word on fan­tas­tic cus­tomer service.

    We're happy to pro­vide free Webi­nars every cou­ple of weeks. Sub­scribe to our Newslet­ter, this blog, or our Twit­ter account (@impactlearning) for infor­ma­tion on our upcom­ing Webinars.

  • http://www.sqmgroup.com Ryan

    Inter­est­ing infor­ma­tion. If any of you are curi­ous about using a First Call Res­o­lu­tion Return on Invest­ment Cal­cu­la­tor, we have recently built one into our web­site in our Online Tools sec­tion which pro­vides some great insight into the oper­a­tional sav­ings you can gain by improv­ing just 1%.

    http://www.sqmgroup.com/roicalc.aspx

  • Hudsonlindsey43

    Great arti­cle and I agree 100%.Their views on first call res­o­lu­tion are
    com­pletely in line with yours as well.  

    I recently read an inter­est­ing guide about
    how to improve your First Con­tact Res­o­lu­tion Rate. There where some really
    inter­est­ing points about causes and how to mea­sure. Check it out http://www.upstreamworks.com/index.php/first-contact-resolution/executive-guide-improving-contact-resolution/

  • http://blog.inovasolutions.com/2011/fcr-and-customer-satisfaction-a-match-made-in-heaven FCR and Cus­tomer Sat­is­fac­tion: A Match Made in Heaven | Call Cen­ter Insights | A Blog by Inova Solutions

    […] you get the point. To improve your cus­tomer ser­vice, work on your FCR rates. There’s def­i­nitely a busi­ness case for address­ing resolution […]

  • http://rosettacarringtonlue.com/2013/06/09/the-business-case-for-first-call-resolution/ The Busi­ness Case for First Call Res­o­lu­tion | Inno­v­a­tive Cus­tomer Ser­vice Strategies

    […] on http://www.impactlearning.com Share this:TwitterFacebookTumblrGoogle +1Like this:Like […]






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