The Most Important Customer Service Metric That Most Businesses Ignore
How to Calculate Your First Contact Resolution Rate, and Why You Need to
It’s never been easier to track just about any metric you want in your online business.
From top-level numbers like revenue and conversion rates, all the way down to granular measures like specific customer flows and behaviors (how many of our customers activated the Slack integration and created a knowledge base article on their third visit?).
This capability—completely unprecedented and, until not that long ago, totally impossible for small businesses without big data-collection budgets—is a good thing, but it also leaves us with a challenge: what’s actually worth tracking?
Which metrics are just going to be numbers on a wall, and which ones can actually help us move our business forward?
In customer service, there are plenty of useless metrics. And there are many businesses that waste time tracking them, just because they can.
But which metrics really matter?
There’s one customer support metric that’s often overlooked in favor of more obvious measures like response time, resolution time and customer satisfaction, but that has the potential to completely change the way your team does support for the better.
That metric is first contact resolution.
What Is First Contact Resolution?
First Contact Resolution (FCR) is pretty much exactly what it sounds like:
First Contact Resolution Definition
Resolving a customer’s issue in a single interaction, eliminating the need for them to contact you again about the issue.
For phone support, that means resolving the issue in a single phone call.
For email and social media support, that means resolving the issue in a single response.
For live chat support, that means resolving the issue in a single chat session.
How to Calculate First Contact Resolution Rate
You can use a simple formula to calculate your first contact resolution rate: simply divide the number of support issues resolved on first contact by the total number of FCR-eligible support issues.
FCR-eligible means that you shouldn’t include any cases that would be impossible to get first contact resolution on (for example, if the customer makes an error in their email to you).
First Contact Resolution Formula
FCR Rate = (number of support issues resolved on first contact) / (total number of FCR-eligible support issues)
Why First Contact Resolution Is an Important Metric
Unlike many support metrics, FCR is all upside. You can’t over-focus on it.
If you focus too much on response time, then your responses will suffer. You’ll rush to get them out the door in order to keep your numbers up.
But it’s hard to imagine anything in your business suffering by focusing on FCR, and here’s why:
If you can resolve a customer issue within a single interaction and your customer doesn’t need to follow up, that means that you’ve made life easier for your customer.
And, as a study cited in the Harvard Business Review suggests, it’s reducing customer effort that actually builds customer loyalty more than any other factor.
FCR is also one of the few metrics that has been directly correlated to real customer satisfaction.
Service Quality Measurement Group’s data suggests that a 1 percent improvement in FCR yields a 1 percent improvement in customer satisfaction.
And not only will good FCR rates increase satisfaction, but poor FCR rates will do exactly the opposite. The International Customer Management Institute studied FCR across 300 businesses, and found the following:
Findings support a high correlation between FCR and customer satisfaction: Among the respondents who reported an increase in FCR over the previous 12 months, 75 percent indicated a resulting increase in customer satisfaction. One more case for adding FCR to customer satisfaction improvement programs is a study, conducted by Customer Relationship Metrics, that found that “caller satisfaction ratings for the company in general and for the CSR will be 35 to 45 percent lower when a second call is made for the same issue.
Simply put, first contact resolution makes your customers happy.
But it can make you and your team happy, too.
If you handle 1,000 interactions per week, and your average first contact resolution rate is 70% (a reasonable industry standard in some industries), that means that 30% of your tickets require multiple responses. Increasing your typical first contact resolution rate by just ten points to an 80% success rate means that you’ll be sending at least 300 fewer emails per week, or 15,600 per year.
That’s a lot of time—and money—saved for your business.
So increasing your FCR rate can make your customers happier, make your team more efficient, and save your business time and money.
But how do you actually improve FCR?
How to Increase First Contact Resolution Rate
It’s not always possible, in every interaction, to handle things in a single response.
Sometimes you’ll need to follow up with a customer for clarification, or get back to them after checking in with another team member.
If you don’t achieve a first contact resolution because of reasons like that, that’s okay.
But if you’re not achieving FCR because you misread the question, or because you provided an incomplete answer, that’s a big miss.
Here are some best practices how to avoid making those mistakes, and get your first contact resolution rate up:
1) Make sure you understand the issue clearly
I always find it so frustrating when I email a company for support (airlines and credit card companies are especially bad at this), and get a response that shows that they didn’t understand my question.
If you don’t completely understand the question, you can’t give a clear answer. So don’t try.
Take your time to read each email, and ensure that you can confidently fill in the blank on “the customer’s issue is _____” before you respond.
And yes, if you don’t understand, you should ask, rather than assuming. A second-contact resolution is still much, much better than an upset customer who thinks you’re not listening.
2) Do it for them
People love to joke about Whole Foods and how the chain can be pricier than its’ competitors. Some have even taken to calling it “Whole Paycheck.”
But here’s a challenge: go into your nearest Whole Foods.
Walk up to any employee in any section, and ask them where a particular item is.
They won’t say “aisle 4.”
They won’t point you to another part of the store.
They won’t give you direction on how to find it.
Instead, the employee will walk you to wherever the item you’re looking for is.
You can apply this example online, too.
Does your customer need to follow a link and fill out a form to make updates to their account? Make the updates for them.
Do they need to take steps to troubleshoot an issue they’re having? Set up a screen share on Skype or Google Hangouts and walk them through it.
When in doubt, do it for them.
3) Know your customer
Some help desk software (including Groove) will let you set it up to display your customer’s support ticket history in the sidebar of any email that they send you.
This lets you add personal touches to support conversations, but it also arms you with valuable information that can help you achieve FCR.
For example, if we know that a customer uses a particular Groove integration, and their issue can be solved through that tool, we can go that route with our response, rather than suggesting something more difficult.
Despite our best efforts and intentions, we don’t always get it right.
In fact, one survey suggests that although 94% of online retailers provide email customer service, 27% of email inquiries are answered incorrectly.
While I suspect that most of you reading this blog average much better than that, the fact remains that there are times that our answers don’t end up being helpful. The problem is that research shows us that most people won’t speak up about problems. So if your reply isn’t helpful, some customers won’t proactively ask you to clarify or help any further.
That’s why asking, at the end of every support email, some personalized version of a simple question like “does this solve the issue for you?” can do wonders in ensuring that our first contact resolutions are actually resolutions, and not just unhelpful responses that drive our customers away.
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Use First Contact Resolution to Grow Your Business
First Contact Resolution is a powerful metric that can guide you to happier customers, a happier, more efficient team, and a stronger business.
Now that you understand it, use the tips in this post to make it happen.