FCR (First Contact Resolution) rate is a benchmark that directly impact customer satisfaction and contact center savings. Contact centers find their FCR rates hovering between 70% to 76%, according to new research from Contact Babel. Improving FCR from the average rate to the 80th percentile, especially in a high-volume contact center receiving 1,000,000 calls per month, could translate to monthly contact center savings of $500,000 per month. Lets discover how advanced Natural Language Understanding (NLU) technology, specifically Teneo‘s, can transform FCR rates, operational efficiency, and customer loyalty.
What is FCR?
FCR is a KPI and a measure reflecting how effectively a contact center meet its customers’ needs on the first attempt. High FCR rates are synonymous with enhanced customer experiences and substantial operational contact center savings—reducing the need for costly follow-up calls. Conversely, low FCR rates can lead to increased operational contact center costs, customer frustration, and customer churn.
Learn more about the significance of FCR and other strategies to enhance it in The Comprehensive Guide to First Contact Resolution (FCR).
How to Improve FCR?
The most expensive channel for any contact center is human agents. However, with FCR automation, businesses can significantly reduce the volume of inquiries that require live agent intervention and achieve the agentless contact center. What is needed is advanced NLU capabilities for customer service with accuracy over 95%, to enable automated self-service channels like chatbots, IVR (Interactive Voice Response), voice chatbots and self-service portals.
FCR and Voice Calls
The most complex channel for improvement in FCR is in voice automation. Understanding the nuances of spoken language, including slang and colloquial expressions is difficult even in offshore callcenters, where human to human accuracy drop below 90%. In the first generation of voice AI, it has been a daunting task to get accuracy in voice to over 90%, which has made companies abandon FCR in Voice Automation.
But it’s also the voice channel that has the largest ROI potential in a contact center:
- With a better FCR rate and automation fewer human agents are needed. For calling customers it means less contact center wait times and higher customer service satisfaction.
- FCR Automation also reduces operational contact center costs by decreasing the number of follow-up calls required.
What Technology is Needed to Improve FCR?
Natural Language Understanding (NLU) plays a pivotal role in improving FCR, especially in self-service channels. For example, Teneo’s NLU accuracy for contact center is well above 95%, which means customer queries are understood and resolved more accurately on the first attempt, leading to higher FCR rates and improved automation.
Improving the FCR rate from 70% to 95% in a contact center with a monthly call volume of 1,000,000 can lead to substantial savings of $15,000,000 annually.
Baseline Scenario for a 70% FCR Rate
- Monthly Call Volume: 1,000,000 calls
- Average Cost per Call: $5
- Total Monthly Cost: 1,000,000 calls * $5/call = $5,000,000
- FCR Rate: 70%
- Calls Resolved on First Contact: 70% of 1,000,000 = 700,000
- Calls Requiring Follow-up: 300,000
Improved Scenario for a 95% FCR Rate
- Improved FCR Rate: 95%
- Calls Resolved on First Contact: 95% of 1,000,000 = 950,000
- Calls Requiring Follow-up: 50,000
- Reduction in Follow-up Calls: 300,000 (initial) – 50,000 (follow-up calls) = 250,000 calls
FCR Savings for a Contact Center
- Monthly Savings: $1,250,000
- Annual Savings: $15,000,000
These figures highlight the significant impact that FCR automation can have on operational contact center costs, underscoring the value of investing in technologies and strategies that support such improvement. The $15,000,000 annual savings not only underscores the operational efficiency gains but also points to the potential for enhancing customer satisfaction and loyalty through more effective first-contact resolutions.
FAQs
What FCR Means?
First Contact Resolution (FCR) refers to the metric used in customer service to measure the percentage of customer inquiries, issues, or problems that are resolved upon the first interaction with a company. Therefore, the customer does not need to follow up with a second contact for additional information, clarification, or resolution regarding the same issue.
What is a Good FCR?
A good FCR rate typically ranges between 70% to 75% or higher. However, this depends on the industry and the complexity of customer service interactions. Still, achieving a higher FCR rate is desirable, as it indicates a more efficient resolution process and better customer satisfaction. Teneo has the highest FCR automation with +95%.
Why is FCR Important on Every Call?
FCR is important on every call for several reasons:
- Customer Satisfaction: Customers expect quick and effective solutions. Resolving their issues on the first contact improves their overall experience and satisfaction.
- Cost Efficiency: Every call or contact that requires follow-up incurs additional costs. Improving FCR rates reduces these costs by minimizing the need for multiple contacts.
- Enhanced Loyalty: Customers who have their problems resolved efficiently are more likely to remain loyal to the brand and have a higher lifetime value.
- Operational Efficiency: High FCR rates signify that customer service operations are running smoothly. It means that issues are resolved quickly, which can lead to better allocation of resources and time.
What is First Call Resolution KPI?
First Call Resolution (FCR) is a Key Performance Indicator (KPI). It’s used by customer service teams to measure the effectiveness and efficiency of their service operations. Also, it tracks the percentage of customer issues that are resolved in the first interaction with the service team, without the need for any follow-up.
As a KPI, FCR helps organizations to identify areas of improvement in their customer service processes. Furthermore, it helps to monitor service quality and set targets for performance enhancements. It is a critical metric for assessing the direct impact of customer service on customer satisfaction and loyalty.