Forrester View

First-Contact Resolution metrics

How many times does your organisation complete a customer issue at the first instance? That's what first-contact resolution measures. But resolving everything at first contact is not necessarily desirable according to this analysis by Chip Gliedman (above) with John Ragsdale and Elisse Gaynor of Forrester Research

First-Contact Resolution (FCR) measures the percentage of times a customer’s issue is completed and closed following the initial contact. Considering that solving customer problems is the goal of most support organisations, a focus on this metric is not surprising. Monitoring, measuring and reporting FCR provides many benefits to the service department, as well as to the organisation as a whole. For internal IT organisations, focussing on FCR ensures that:

• Business users maximise the time they spend doing their job. Resolving the issue that kept a technology user from performing the task at hand leads to higher productivity and lower corporate costs.
• ‘Telephone tag’ is eliminated. Once an initial contact has ended, it can often be quite difficult to re-establish communications. Meetings, phone calls and other business events can stretch the time to multiple days before the user and the support organisation are both available again.
• Satisfaction is increased. Leaving a problem unresolved decreases the likelihood that the same user will look to the support organisation to solve subsequent problems. This can create a costly cycle-both in time and money-where users look to colleagues to provide support.

For an external customer service organisation, a focus on FCR can lead to:

• Decreased costs and improved profitability. The delivery of customer service is a corporate cost that affects the profitability of the company. An appropriate focus on FCR elucidates the best practices and strategies that are the most successful in resolving issues at minimal costs in time and labour to the customer service organisation.
• Higher customer satisfaction and a greater chance of additional customer revenue. Each contact with a customer must be treated as an opportunity to solidify the relationship and, whenever possible, as an opportunity to increase revenue. However, a customer with an open issue is far less likely to be receptive to an additional product pitch.
• Better training and support technology. An organisation that focusses on FCR is more likely to train and equip the customer service representatives with the tools and authority they need to quickly resolve issues.

Over-emphasis can lead to trouble

While a focus on FCR is good, too much of a good thing can lead to problems. Organisations that over-emphasise FCR can:

• Develop a customer backlash. Forrester worked with one internal IT support organisation that was focussed on FCR to the point where user satisfaction was becoming compromised. Calls were being marked as ‘resolved’ only to have the users call back with a new instance of the same problem or a similar problem. Standard practice was to mark all calls as resolved and treat each new call as a new problem. Users interviewed at this organisation expressed frustration and the belief that the IT staff did not care about anyone other than themselves-not an enviable position for any service organisation.
• Generate more concern about the metric rather than the motivation. Forrester has worked with organisations that seemed to spend more time re-defining the way that FCR was counted than on improving the resolution rates themselves. For example, problems that could not possibly have been resolved at the first contact-such as those requiring a desk-side visit-were ‘carved out’ of the pool used to calculate FCR.
• Shy away from automation. Problem suites that could most likely be automated or provided through self-service are most likely to be solved on the first customer contact. This includes internal service desk issues such as password resets, and external issues such as balance inquiries and ‘where to buy’ calls. Automating these resolutions removes them from the pool used to calculate FCR, and therefore leaves a higher percentage of ‘hard’ problems and a lower percentage of FCRs.

Recommendations: finding the balance point

FCR rates vary by type of service organisation, type of problem, industry, complexity, training of both users and agents, and management focus. Although it is difficult to draw generalisations, organisations should consider themselves out of the norm if:

• Their IT service desk FCR varies far from 75 percent to 80 percent. Internal FCR rates will flow upward and downward depending on technology life-cycles and levels of automation. However, an organisation with FCR metrics much above or below this range should validate existing practices.
• Their external customer satisfaction rate varies far from 90 percent to 95 percent. Numbers this high are unlikely to be attained by customer service organisations in some departments and industries. The complexity of the issue, as well as the amount of information to be gathered prior to resolving the issue, can work to lower the possible FCR targets. However, contact centres whose customers have long-term ties also have a lower requirement to solve all calls on the first contact, as opposed to organisations in a more commodity-based industry with low barriers to customer turnover.

For more information contact Sudin Apte, Forrester India, Country Manager, at sapte@forrester.com or phone 020 2567 4390/91