First contact resolution rate: What it is, and why it matters

As a customer, nothing is more frustrating than repeatedly contacting customer service to resolve an issue. This is where the first contact resolution rate comes into play.

This blog post will explore the significance of first contact resolution (FCR). It will also provide actionable tips for businesses to improve it.

What is the first contact resolution rate?

Customers expect to resolve their issues with as few interactions as possible. When this happens, they are left with a positive impression of the brand. 

First contact resolution (FCR) measures the percentage of requests resolved within one support interaction. 

How to calculate first contact resolution rate

FCR is one of the most significant customer support KPIs. It is also vital for assessing CSAT scores. Let’s see how we can calculate and improve FCR.

First contact resolution rate formula

Calculating FCR formula is simple in theory. To measure it, divide the issues resolved on the first contact by the total number of resolved issues during the same period and express it as a percentage. 

For example, if you received 100 customer inquiries in a week and were able to resolve 80 on the first contact, your FCR rate would be 80%.

In practice, calculating FCR can become a bit complicated. That’s because what constitutes a resolved issue varies among different companies. You should consider internal and external success metrics when calculating FCR. Here are a few questions to help you define FCR internally:

• If your customers used another channel to resolve their issue after an unsuccessful interaction, does it count as FCR?
• Who determines what successful interactions represent? Is it someone within the organization, the customer, or both?
• Are abandoned tickets, calls, or emails considered FCR?
• Does self-service after an interaction count as FCR?

What is a good FCR rate?

Generally, a higher FCR rate correlates to better customer satisfaction. It may also be an indicator of efficient customer service team collaboration. But, what forms a “good” FCR rate can vary depending on the industry type. To determine your FCR benchmark, compare your performance against competitors and industry averages. 

To better understand your ideal FCR, answer some essential questions, such as:

• Which communication channels does FCR apply to in your case?
• What does it mean to resolve a customer’s problem successfully?
• How should standard callback requirements be handled while maintaining FCR?
• What qualifies as a repeat call?
• What is your call abandonment rate?

The more precise you are in defining what counts as a resolved call and what doesn’t, the more accurate your FCR rate will be.

Why you should keep an eye on FCR

Monitoring first contact resolution (FCR) rate is crucial for businesses prioritizing customer satisfaction. By monitoring FCR, businesses can pinpoint areas that need improvement in their customer service operations. This can lead to a reduced churn rate, better customer loyalty, and revenue growth.

Additionally, high FCR rates can lead to cost savings for your business. That’s because it reduces the need for follow-up interactions and frees staff time.

Benefits of using first contact resolution rate as a metric

Here are the main benefits of monitoring and improving first contact resolution rate:

• Improved customer satisfaction. Customers appreciate when you address and resolve their issues during the first interaction. This saves their time and effort and leads to increased customer loyalty. Satisfied customers are more likely to speak positively about your business to others. 
• Increased customer loyalty. Issues resolved on first contact increase the likelihood that customers remain loyal to a business. Even if something goes wrong, customers will rest easy knowing their issues will be resolved.  
• Reduced operational costs. Issues resolved on first contact reduce the need for follow-up calls, emails, or chats. This lessens the workload for customer support agents. A high FCR rate can help businesses identify common issues and improve their self-service solutions. This proactive approach can reduce the need for direct interaction.

The problems with using FCR as a metric

Many companies use first contact resolution Rate (FCR) to measure customer service efficiency. Still, it’s essential to be aware of its downsides. A high FCR doesn’t necessarily mean your customer service is excellent. Instead, it may indicate that you must improve the documentation or self-service systems. It can also indicate the presence of bugs and technical problems that lead to repeated inquiries.

Another drawback of FCR is that it doesn’t consider the time it takes for customer support to reply. Response time is critical to ensure customer satisfaction since customers want help immediately. Even if the support team crafts a perfect one-touch reply, it won’t matter if the customer is left waiting.

FCR depends on how you define a resolved support request. Incentivizing teams to mark tickets as solved at all costs can lead to artificially high FCR rates. Pairing FCR with CSAT metrics and first response time is crucial to understanding your true performance. While FCR can be a helpful metric, you shouldn’t use it exclusively to evaluate your customer service.

Best practices for improving first contact resolution rate

Improving your first contact resolution rate doesn’t have to be complicated. Here are a few quick strategies that have helped us improve FCR for TextMagic:

1. Analyzing helpdesk and call center data 

One of the best practices for improving FCR rates is to analyze helpdesk and call center data. This involves reviewing average call handling time, call abandonment rates and customer feedback. 

These insights helped us improve support processes and provide better training to our agents. Sit down with your support team and analyze what worked and what didn’t in real customer interactions. 

Personalization based on real data also plays a massive role in improving customer satisfaction. Whenever possible, use personalized email templates and provide custom onboarding and support. 

2. Empower your team with comprehensive training

Another critical factor in improving FCR rates is to empower your support team with extensive training. This can include product and service knowledge or soft skills such as effective communication.

Regular training sessions and coaching helps agents stay up-to-date with new products and services, better understand customer needs, and develop problem-solving skills.

Many SaaS companies now introduce members from other departments to customer-facing roles. Each new marketing hire at Ahrefs spends two months on support before doing their first marketing task. This is a great long-term strategy for improving customer communication. Support also becomes easier when the marketing, product, and design teams are aligned on values.

Every new marketing hire at @ahrefs has to spend the first 2 months working in Customer Support, before they get their first marketing assignment.

It’s hard to be an effective marketer if you don’t know both your product and customers in and out. pic.twitter.com/jDh5xFUqwE

— Tim Soulo 🇺🇦 (@timsoulo) February 21, 2023

3. Improve self-serve to reduce the number of support requests

Improving your self-service options can also reduce the number of support requests. That’s because customers often prefer to find solutions on their own.

Providing them with comprehensive self-help resources can be a game-changer. This includes an extensive knowledge base, FAQ section, and instructional videos.

While not directly impacting first contact resolution, self-serve leads to fewer support requests overall.

4. Configure automatic ticket routing 

Automatic ticket routing assigns customer inquiries to the most appropriate agents based on skill set or expertise.

With Touchpoint, it’s easy to configure ticket routing rules. Assign tickets based on availability, knowledge or other criteria you define. This will enable you to reduce the first contact resolution rate and response time.

5. Follow up with your unhappy customers

Following up with unhappy customers is essential for improving customer experience and retention. When a client expresses dissatisfaction, listen carefully to their concerns and take appropriate action to address their issue. This may include an apology, clear explanations, or compensation/discounts. 

How to measure and improve FCR with Touchpoint

Want to improve your business’s first contact resolution (FCR) rate? Sign up for a Touchpoint trial and explore all our support features.

With Touchpoint, you can automatically calculate global and individual FCR rates. Our tool displays the number of requests by the number of agent replies in an easy-to-understand format. This makes it easier to identify areas for improvement.

We also display support interactions from multiple channels under the same dashboard. This removes discrepancies and calculation errors when customers use different channels to get in touch.

With a 360-degree view of customer interactions, agents can quickly identify the root cause of issues and collaborate with other team members to find solutions. This can lead to higher FCR rates and a more efficient support team.

Conclusion

While first contact resolution (FCR) is a key metric, it should not be the only one used to evaluate the support experience. NPS, CSAT, CLV, and other customer success metrics are huge in the customer journey. Use them together to evaluate the customer experience and improve your support.