Does First Call Resolution Lead to Customer Loyalty?

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.

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?

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?

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.