Digital Customer Service

January 28, 2022

Francesca Pisu

What Is First Contact Resolution? - Definition, Formula and Tips

Many companies strive to be available on as many channels as possible and forget about service quality. This spells trouble for customers, who then have to contact customer service again, get redirected several times and repeat their request.

In our study, we learned that having to repeat their requests is onex of consumer’s biggest frustrations with customer service. For companies, it’s also costly to answer repeat questions. Not to mention it worsens customer support’s first contact resolution, an often ignored but important KPI.

As shown in this 2019 study by Ascent Group, companies that focused on their first contact resolution saw significant improvement in customer satisfaction and the overall performance of their customer support. This is yet another reason to include this powerful metric in your report.

In this article, you'll learn what first contact resolution is, how it's measured, and how you can improve it.

1. What is first contact resolution?
2. The advantages of first contact resolution
3. How to calculate your first contact resolution
4. How to improve your first contact resolution

First contact resolution (FCR) is the percentage of customer service requests that are resolved during the first interaction. Basically, this means the customer's inquiry was resolved in the first conversation and they don’t need to contact the company again.

Often, first contact resolution is equated with first call resolution. While the former includes all channels such as phone, website chat or email, first call resolution is limited to the phone channel — an important difference I’ll discuss in more detail later.

As mentioned before, your FCR influences key customer service metrics. However, high FCR also has a positive impact on your company's success in other areas.

Customer satisfaction. According to Metric Net, a high FCR is considered an indicator of high customer satisfaction. This isn’t surprising since customers want to solve their issue the first time they contact support. Customers are then understandably frustrated when this doesn’t happen.

Service performance. Repeat contacts and request reprocessing costs a company time and resources. If your FCR is low, it could mean that your service quality has points that can be improved. The type of customer requests you receive, as well as your support staff’s knowledge and experience, also play a role.

For example, if an employee gives the wrong information to a customer, who then has to contact your support team again, this reveals knowledge gaps and "weak points" in your service. You can then use targeted customer service training to improve these gaps.

Employee satisfaction. Low FCR often means low employee satisfaction. Not resolving the issue during the first contact is not only frustrating for customers, but also for customer service employees. Open tickets, serving frustrated customers, or even repeatedly referring them to different departments means one thing for service employees: stress.

Sales/sales opportunities. A study by SQM shows that high FCR also improves your sales opportunities. Customers who immediately had their problem resolved increased their willingness to cross-sell by 20%. It’s important to solve the customer’s inquiry before making a purchase offer. Otherwise, the customer may think the company only wants to make a sale.

There are two simple formulas for calculating your first contact resolution:

FCR = resolved service cases at first contact / total number of service cases * 100

FCR = total number of service cases solved - service cases reopened / total number of service cases * 100

If you have a system for marking all inquiries solved at the first contact, with an FCR tag for example, use the first formula. Divide the resolved requests by the total number of service requests and then multiply this number by 100.

If, on the other hand, you don’t tag first contact resolution cases, you can instead try subtracting the total number of reopened resolved service cases from the total number of resolved service cases. Your calculated total of first contact resolutions is then divided again by the total number of service requests and multiplied by 100.

An industry standard and good FCR is about 74%. This means that only 25-30% of customer interactions are repeat inquiries.

Before you start calculating, it’s important to consider some key factors and clearly define what should be included in your FCR. We recommend creating a list of criteria that could have an impact on your first resolution rate.

Use the following questions as a guide:

• When is the customer concern truly considered resolved? Since you want to receive the most accurate FCR possible, it’s crucial to keep a record of resolved inquiries. The best way to do this is by asking your customer at the end of the conversation if their issue was resolved and/or if they have any further questions. If the customer is satisfied, the agent can mark the case with an FCR tag and end the conversation. Avoid giving your employees FCR targets. This may make your staff close cases too quickly just to meet their goal, which skews your results.
• Does changing the contact channel affect first contact resolution? Let's assume your customer switches from email to a phone call. Since they have to pick up the phone, dial a number and repeat their request, this is clearly a channel change and isn’t eligible for FCR. But what if there is a switch within the same channel? For example, with Userlike’s website chat, agents can offer to switch to an audio or video call for more complex issues.
  This fluid exchange of channels within the chat has no negative impact on the customer experience and requires zero additional effort. The customer doesn’t have to repeat their request and can explain themselves more clearly using audio/video calls or screen sharing. If you find a solution after the switch and within the chat, the case can be marked as resolved.

• Are referrals also considered in your FCR? Sometimes customers don’t initially speak with the right department or are forwarded to the wrong agent. Even in this case, the customer experience is at risk. On the phone, the customer has to repeat their request; through email, they have to wait for a response, which could take days. However, website chat and mobile messaging work in real time so routing to a different agent is seamless. Since chats are documented, conversations are easy to forward and the customer doesn’t have to repeat their issue to a new agent.
• Should reopening rates be measured? Despite good customer service, your customer may have another question, requiring you to reopen a closed ticket. We recommend setting a “contact window" for reopenings and callbacks. For example, you could set a contact window for 48 hours after the initial contact before a resolved inquiry is added to your FCR. If a customer doesn’t contact you again about the same problem within that time frame, you can include it in your calculation as a resolved case.

Keep in mind that your FCR shouldn't just be based on CRM numbers, a formula or a "done" checkmark. It's important to consider the customer and their perspective for a more meaningful satisfaction metric.

If you want to dive deeper into this topic, read our article "6 proven methods for measuring customer satisfaction."

Now that you’ve calculated your FCR, here are some tips you can use to improve it.

Forward resolving

A great way to improve FCR is with "forward resolution," which means you anticipate potential customer problems and address them so the customer doesn’t have to contact you again.

For example, when customers contact us at Userlike about adding operator profiles within our messaging software, we also use the opportunity to explain operator roles and how to set them up with certain permissions.

In some cases, you can also use forward resolving to first help the customer with their problem and then offer more tips so they can help themselves in the future. For example, after helping with the customer's question, you can show them how to find answers themselves by using your tutorials, product videos or the FAQ page.

Choose the right communication channels

The communication channels you use have a great impact on your first contact resolution. This is because they differ in structure, advantages and disadvantages.

Email. Email isn’t ideal for high first contact resolution. You can’t interact in real time, which often leads to a long back and forth between the customer and the agent. It keeps you from resolving the customer's issue quickly, which is counterproductive for FCR. Also, emails often contain more information than is necessary and don’t always resolve the issue after one response, which can frustrate customers.

Phone. Phone is a reliable channel for resolving the customer's issue during the first conversation. But it also has major drawbacks: it’s expensive and can be frustrating — customers don’t like being put on hold. Also, you can’t document the conversation so that it can be revisited later, and you can’t switch to a video call. Video is especially helpful if your customer would much rather show their problem than explain it.

Website chat. Chat is an instant real-time interaction, making it an ideal channel for high first contact resolution. Many of our customers have seen steady improvement in their FCR by using website chat.

Modern customer service solutions like Userlike offer features that help you resolve inquiries during the first contact and sustain a good FCR.

Operator groups, for example, allow customers to select the department they need before chatting so they’re redirected to the right person. Operator Skills allows you to assign relevant skills to operators so the customer is automatically connected to the employee who can best assist them.

A major advantage, as mentioned above, is the seamless transition from chat to call. If a customer approaches you with a complex issue that can’t be clarified via chat, Userlike lets you directly transition to an audio or video call. Both parties then have the possibility to share their screen.

Another benefit is that every conversation is documented. This means that customers can reread the transcript of their conversation at any time. For example, if they forget how to change certain settings in their account, they can use the instructions from their conversation with an agent.

Mobile messaging. Mobile messaging has similar advantages as website chat. The real-time communication nature of messaging makes it an optimal channel for your first contact resolution rate.

Messaging apps are now an integral part of our daily lives, and consumers use them every day to communicate with friends and family. More and more companies are therefore adapting to these evolving customer needs and now offer service via WhatsApp and similar apps.

An advantage of this easily accessible channel is that conversations can be started or continued at any time and from anywhere - even on the go or when it suits the customer best.

Additionally, being able to send media and text files directly within the chat leads to quicker resolutions.

Improve your first contact resolution with Userlike

First contact resolution is an important metric: it shows you how well your customer service is doing at resolving customer inquiries and has a big impact on customer/employee satisfaction and cross-sell adoption.

At Userlike, we’ve learned that the most effective way to improve your first contact resolution and customer service is to carefully choose your communication channels. Many companies continue to use familiar yet outdated methods like email and phone, while more and more companies are consciously expanding their customer channels and even avoiding phone altogether in some cases.

With Userlike, we’ve developed a customer messaging solution that combines website chat and the most popular messaging channels, such as WhatsApp, Facebook Messenger, Telegram and Threema - all on one platform. Additionally, key features like pre-written messages, tagging, intelligent routing and more are available to help support your customer service team.

If you want to improve your first contact resolution by using professional, modern communication channels, sign up for a free trial.