FCR The Driver of All Other Metrics

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2 At SQM, we measure all major voice of the customer (VoC) metrics, such as customer satisfaction (Csat), ease of effort, net promoter score (NPS) and word of mouth index (WoMI). SQM also measures moments of truth a customer experiences when calling a call center, such as customer service representative (CSR) knowledge, caring, helpfulness, and friendliness as well as hold time and call transfer. All the above customer experience and loyalty metrics are worth measuring; however, when judging a customer s experience using a call center, these metrics are not as insightful or as impactful as first call resolution (FCR) and call resolution metrics. In fact, FCR and call resolution are drivers of all the above metrics. Therefore, in order for the call center to improve customer service, operating costs and customer loyalty, FCR and call resolution should be the primary metrics used to measure a call center s performance. To further underscore that FCR and call resolution are the most important metrics for measuring and improving call center customer service and operating cost performance, we have provided FCR and call resolution VoC research insights as to why they are drivers of all metrics. This whitepaper also shares best practices on how to measure FCR and who (customer or the organization) should determine FCR. SQM s FCR and call resolution VoC research insights are based on measuring over 250 leading North American call centers from all major industries (e.g., healthcare, telecommunications, energy, retail and financial) and conducting over 2 million surveys with customers who have used a call center for the years of 2012 and Call Resolution and FCR are The Drivers of All Other Metrics Figure 1 illustrates, from a customer s call center experience, call resolution and FCR are the drivers of outcome metrics such as call center Csat, satisfaction with the CSR who handled the call, ease of effort for resolving a customer s call, customer loyalty, advocate of organization brand and cost per call resolution. For example, in most cases, when the call is resolved, SQM s VoC research shows that 97% of customers are either very satisfied (82%) or somewhat satisfied (15%) with their call center experience. When customers receive FCR, 88% of them are very satisfied (top box rating). The bottom line is that outcome metrics cascade from call resolution and FCR. It is SQM s opinion that if call center management focuses more on call resolution and FCR metrics they will achieve improvements in Csat, customer loyalty, revenue and operating cost performance. Figure 1: Call resolution and FCR are the drivers of all other metrics 2

3 VoC FCR Correlation to Key Customer Experience Metrics Figure 2 shows VoC FCR correlation to key customer experience metrics. The key customer experience metrics are call center Csat, CSR Csat and ease of effort. The call center Csat metric is based on a customer s overall satisfaction with their call center experience. The CSR Csat metric is based on a customer s satisfaction with the CSR who handled their call. The ease of effort metric is based on the ease with which a customer was able to resolve the reason for their call. The data reveals that call center customer experience is highly correlated to FCR. Positive results for these metrics are the outcome of a customer achieving FCR. Any correlation over 0.50 is considered highly correlated. There is almost a one-to-one relationship between FCR and call center Csat. For example, SQM s call center tracking clients average FCR is and their Csat (top box rating) is. Of all the metrics SQM compares to FCR the call center Csat metric is the most correlated to FCR. The key finding is that FCR is highly correlated to all major customer experience metrics. Figure 2: VoC FCR correlation to key customer experience metrics Metric Call Center Csat CSR Csat Ease of Effort First Call Resolution Repeat Calls Impact on Call Center Overall Csat Figure 3 shows repeat calls impact on overall call center Csat. Overall, there is a 42% difference when the call is resolved in one call compared to taking four or more calls to resolve the customer s issue. Clearly, most customers know how many calls they made to resolve their call and if they make too many calls, they have lower Csat. On average, there is a 14% drop in Csat for each additional call required to resolve a customer s call. The Csat penalty for more than one call to resolve the customer s call is very similar for most major call types. In other words, if the call has higher complexity (e.g., technical and complaint), or has lower complexity (e.g., order and general inquiry), the Csat penalty for the number of calls placed remains relatively the same. Most customers do not differentiate between high and low complexity calls; they expect their call to be resolved, and preferably in one call. The key finding is that there is a substantial drop in Csat for each repeat call a customer makes trying to resolve their issue or problem. Figure 3: Repeat calls impact on call center overall Csat 3

4 FCR and Csat (Top Box) Trending Relationship Figure 4 shows the FCR and Csat (top box) trending relationship. As you can see from the below chart, the trending relationship between FCR and overall call center Csat is very similar. The call center industry FCR average for almost two years has been and the Csat average has been. For any given month there is no more than a 4 point gap difference between these metrics and only a 2 point gap difference for the last 22 months. It is very close to a one-to-one relationship between these metrics. SQM tracking clients tend to have higher FCR and Csat performance compared to benchmarking clients. The key finding is that FCR is highly correlated to overall call center Csat. Figure 4: FCR and Csat (top box) trending relationship 85% Average Call Center 80% 77% 77% 70% FCR Csat 65% Average FCR: Average Csat: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Customer View on Case Status (Call Pending) for Call Resolution Figure 5 shows the customer view on case status (call pending) for call resolution. For cases closed, 13% of customers feel that their call is still unresolved; yet the organization has determined their case to be closed. Clearly, these customers do not agree with the organization s viewpoint that their case is closed. These customers are likely to call back and have low Csat. For cases open, of these customers believe that their call is resolved or is going to be resolved soon. The main reason the customer believes their call is resolved is that they assume the organization will take care of their issue and they will not have to call back to resolve their issue. These customers will only call back if the organization does not resolve their issue. The key finding is that when the organization has determined the customer case status closed, 13% of customers view the call as still unresolved. Figure 5: Customer view on case status (call pending) for call resolution % of Case Status Case Status Unresolved Calls Closed 13% 88% Case Status Resolved Calls % of Case Status Open 12% 4

5 Call Resolution Metrics Impact on Customer Loyalty Figure 6 shows call resolution metrics impact on customer loyalty. The data shows that, of the customers who experienced FCR, definitely would continue to do business (top box response) while only 1% of FCR customers definitely would not continue to do business (bottom box response). FCR had a 14% higher definitely would continue to do business (top box response) compared to non-fcr resolved calls (top box response) and 41% higher compared to unresolved calls (top box response). When a call goes unresolved, only 32% of customers definitely would continue to do business (top box response). Furthermore, for those customers whose calls were unresolved, 10% definitely would not continue to do business (bottom box response), which is 10 times higher than those customers who experienced FCR and definitely would not continue to do business (bottom box response). The key finding is that higher FCR performance results in significantly higher customer loyalty. Figure 6: Call resolution metrics impact on customer retention Definitely Would Probably Would Might or Might Not Probably Would Not Definitely Would Not FCR Calls 22% 3% 1% 1% Calls Resolved (Non-FCR) 59% 30% 7% 3% 2% Unresolved Calls 32% 31% 17% 9% 10% Call Resolution Metrics Impact on Customer Defections Figure 7 shows call resolution metrics impact on customer defections. When the call is resolved on the first call, only 2% of those customers expressed their intent to defect. When it took repeat calls to resolve their call, 5% of those customers expressed their intent to defect. However, what is more alarming, when the calls were unresolved, 19% of those customers expressed their intent to defect. Clearly, for the call center to retain customers, they must resolve the customer s call, and preferably on the first call. Astonishingly, the vast majority of call centers do not measure whether they have retained customers or whether the customers will defect as a result of their call center experience. Another missing practice is to identify the CSRs who create the highest amount of customer defections. SQM s research shows that the bottom 15% of CSR call resolution performers have 8% of customers express the intent to defect versus 4% for the top 15% of CSRs for call resolution performers. Without knowing whether or not they have retained customers, call center leaders have no idea of how much of the company s revenue loss is due to customers defecting as a result of their call center experience. The key findings are that when a call goes unresolved, customer defection is 10 times higher than when a customer receives FCR and is 100% higher for the bottom 15% of CSRs than for the top 15% of CSRs. Figure 7: Call resolution metrics impact on customer defections % of Custom ers % of Custom ers w ho Say They Will Defect FCR Calls 2% Calls Resolved (Non-FCR) 16% 5% Unresolved Calls 11% 19% 5

6 Call Resolution Metrics Impact on Customer Advocacy of Company Figure 8 shows the call resolution metrics impact on the customer being an advocate for the company brand. The data shows that, of the customers who experienced FCR, had a speak positively advocacy rating (top box response) for the company brand while only 1% of FCR customers had a speak negatively advocacy rating (bottom box response). FCR had a 24% higher speak positively advocacy rating (top box response) compared to non-fcr resolved calls (top box response) and 50% higher compared to unresolved calls (top box response). When a call is unresolved, only 22% of customers had a speak positively advocacy rating (top box response) for the company brand. Furthermore, for those customers whose calls were unresolved, 16% had a speak negatively advocacy rating (bottom box response) about the company brand which is 16 times higher than those customers who experienced FCR and had a speak negatively advocacy rating (bottom box response). The key finding is that higher FCR performance results in a significantly higher advocacy for customers speaking positively about the company brand. Figure 8: Call resolution metrics impact on customer advocacy of company 1 = Speak Positively = Speak Negatively FCR Calls 19% 6% 3% 1% Calls Resolved (Non-FCR) 48% 28% 14% 7% 2% Unresolved Calls 22% 21% 27% 14% 16% 6

7 Cost Per Call Resolution for the Best and Worst CSRs Figure 9 shows cost per call resolution for the best and worst CSRs. The below data is for cost per call resolution for the best 15% of CSRs and the worst 15% of CSRs for the 250 organizations that participated in this study. The call center industry s average cost per call is $7.54. Cost per call resolution factors in cost and how many calls it took for the customer s call to be resolved, which is different than just cost per call. The average cost per call resolution for the best CSRs ($7.54 x 1.3) is $9.80 and for the worst CSRs ($7.54 x 1.6) is $ The average cost per call resolution for the call center industry is $ The worst CSRs have a 23% higher cost per call resolution than the best CSRs. The key finding is when both customer defection and repeat call costs are factored in, it would be cheaper for call centers to pay the worst performing CSRs to stay at home and replace them with new CSRs, rather than have the worst performing CSRs take calls. Figure 9: Cost per call resolution for the best and worst CSRs 7

8 Customer Put on Hold Impact on FCR and Call Resolution Figure 10 shows customer put on hold impact on FCR and call resolution. When customers are put on hold, FCR is 19% lower and call resolution is 10% lower compared to customers who are not put on hold. SQM s research shows that 41% of all customers who call a call center are put on hold. Most customers are informed that they are being put on hold and the hold time is typically between 30 seconds and 5 minutes. In many cases, when customers are put on hold, there is music or advertising in the background, both of which can create customer dissatisfaction. In addition, calls that are placed on hold tend to be more complex and therefore have lower FCR and call resolution performance. Customers prefer a live hold practice, meaning that at any time during the call they can talk to the CSR versus a mute hold practice that does not allow them to talk to the CSR. The key finding is that for the live hold practice, average handling time is shorter when there is a live hold versus a mute hold, and most importantly, FCR is 19% higher when the customer was not put on hold. Figure 10: Customer put on hold impact on FCR and call resolution Customer Was Put on Hold Customer Was Not Put on Hold 92% 100% 82% 90% 79% 80% 70% 60% 60% 50% First Call Resolution Calls Resolved First Call Resolution Calls Resolved Customer Call Transferred Impact on FCR and Call Resolution Figure 11 shows customer call transferred impact on FCR and call resolution. Calls that are transferred to another CSR tend to be more complex calls and, as a result, have lower FCR and call resolution performance. It is important to note that SQM s research shows that 19% of customers who call a call center are transferred to another CSR. The primary reason why customers are transferred to another CSR is because the IVR voice menu system did not route the customer to the right CSR in the first place. The key finding is that when a customer is transferred, FCR is 14% lower and call resolution is 4% lower than when a customer is not transferred. Figure 11: Customer call transferred impact on FCR and call resolution Customer Was Transferred Customer Was Not Transferred 100% 88% 84% 90% 80% 70% 59% 60% 50% First Call Resolution Calls Resolved First Call Resolution Calls Resolved 8

9 Quality Assurance (QA) Figure 12 shows the impact of traditional QA practices on FCR. Most call center supervisors use call monitoring as their primary tool to evaluate call quality and to coach CSRs on providing customer service and resolving customer calls. Also, most managers assume that call monitoring is helping them achieve or improve the call center s FCR performance. SQM s research on the impact of call monitoring on FCR shows that there is very little relationship between call monitoring ratings and FCR performance ratings. The data shows that only 19% of CSR call monitoring ratings had a positive impact on FCR performance ratings. The key finding is that traditional (QA) call monitoring has little or no impact on FCR. Figure 12: Impact of traditional QA practices on FCR 81% 100% 80% 60% 19% 40% 20% 0% Percentage of CSRs where QA had "No Impact" on FCR Ratings Percentage of CSRs where QA had a "Positive Impact" on FCR Ratings Most call monitoring practices typically focus on measuring customer experience metrics such as, handle time, adherence to script, policies, screen navigation and call compliance standards. Regardless of which metrics are evaluated, or who is conducting the monitoring, one thing remains clear; call center management, not the customer, is still judging call quality in most call centers today. Astute call center managers must ask, What is wrong with this picture? SQM believes that it is a best practice for the call center to judge call quality from both a customer and an organizational perspective. Based on years of studying call monitoring, SQM has seen that call centers do an effective job using call monitoring to evaluate call quality from an organizational perspective (e.g., caller verification, adherence to policies, accuracy of information provided to the customer, screen navigation and data captured in the CRM system); however, call centers are not effective at evaluating whether the customer s call was resolved. This is primarily because QA evaluators can never accurately assess the customer s call center experience or call resolution only the customer can accurately assess their call center experience and call resolution. 9

10 How to Measure FCR and Who Should Determine FCR Many organizations struggle with whether it should be the organization or the customer who determines FCR and call resolution performance. If the choice is as simple as the organization or the customer for determining FCR and call resolution, SQM is of the strong belief it should be the customer. After all, the customer will determine whether or not they will call back, not the organization. Letting the customer be the judge of FCR and call resolution can be a very difficult practice for some th managers to implement. It has been SQM s experience that 4 quartile call center performers have the most difficulty with letting the customer be the judge of FCR and call resolution. It has also been SQM s th experience that one of the main reasons call centers are in 4 quartile for VoC FCR and call resolution performance is because they want to be the judge of call quality using internal metrics (e.g., speed of answer, quality assurance and case status) and, as a result, have been more focused on meeting the organization s needs versus the customer s. Customer Organization Resolution Index (COR-I) for Determining Call Resolution and FCR Figure 13 shows that SQM considers the best practice for measuring FCR and call resolution is to use a combination of VoC (external) and organization (internal) metrics. The benefit of this dual measurement approach is that you are using VoC to ensure the customer will not be calling back and using the organization to ensure the customer will not have to call back. At SQM, we call these combined metrics, the Customer Organization Resolution Index (COR-I). The COR-I is determined by using the VoC post-call survey method and the organization s QA case status assessment method. The two metrics are then combined to create an index which recognizes that both the organization and the customer have a role to play in determining FCR and call resolution. Simply put, if the customer says their call was resolved and the case status is closed/resolved as determined by a QA evaluator, then the call is considered officially resolved. To determine if FCR took place, the customer must state on the survey that they only placed one call and their call was resolved. In addition, the QA evaluator verifies that the call was actually resolved. Figure 13: Customer Organization Resolution Index (COR-I) for determining call resolution and FCR 10

11 In summary, FCR is the only metric that can help reduce operating costs, improve Csat and Esat, increase opportunities to sell and retain customers. In fact, SQM s research shows that for every 1% improvement in FCR you reduce operating costs by 1%. You can also achieve a 1% improvement in Csat and there can be a 1% to 5% improvement in Esat. Furthermore, when a customer s call is resolved there is up to a 20% increase in the acceptance rate for cross-selling and, most importantly, 98% of customers will continue to do business with the organization as a result of achieving FCR. These compelling FCR facts provide an extremely strong business case for call center leaders to use FCR and call resolution as the primary metrics to measure customers experience calling a call center and to help improve their call center and organizational performance. There are so many competing metrics out there in the call center industry and, as such, it takes a strong leader to adopt and stay focused on FCR and call resolution metrics. Those call center leaders who adopted and stayed on the FCR course have experienced tremendous improvement in their service quality and operating costs. Many of them have done so within 90 days of implementing an FCR and call resolution focused action plan. Of all the different metrics that SQM has seen its clients implement, FCR and call resolution metrics have been the most successful for helping them improve Csat, reducing operating costs and protecting customer loyalty. 11