3 best practices to improve first contact resolution and reduce customer churn

How to improve your first contact resolution rate – the right way 

As the threat of a global recession continues to loom large, more businesses are switching their focus from customer acquisition to customer retention

For customer service leaders, this means a shift in approach is necessary. One of the most powerful ways an organization can strengthen customer loyalty and reduce customer churn is to improve its first contact resolution (FCR) rate. 

What is first contact resolution (FCR) and why is it important? 

First contact resolution (also known as FCR) is a metric used to measure the success of an organization’s customer service operations.

It’s typically expressed as a percentage. To calculate it, divide the number of cases resolved at first contact by the total number of cases, like so: 

Total number of resolved customer cases at first contact  x 100

Total number of customer cases

If you have a high FCR rate, it means most of the customer queries or problems you encounter are resolved the first time customers turn to you for help. In other words, you didn’t have to schedule as many follow-up calls to address their needs. 

FCR is an important key performance indicator (KPI) for all customer-facing organizations because it helps express how well you’re serving your customers. 

It also has a direct impact on other metrics, like your customer churn rate and customer satisfaction scores (CSAT). After all, the longer it takes to resolve customer problems, the more dissatisfied they’ll be and the more likely they’ll defect to your competitors.  

What you should know about first contact resolution

There’s one caveat that you should keep in mind when it comes to first contact resolution: the customer’s perspective is what matters most here. 

When customer service leaders focus on improving their first contact resolution rate, they sometimes put too much emphasis on the “first contact” part. The truth is, customers don’t necessarily expect all of their problems to be solved the first time they get in touch with you.

It all depends on the context. Of course, your organization should always address straightforward customer queries or requests without delay (and ideally let a chatbot handle these) – but other situations will inevitably require follow-up calls. 

What customers really want you to focus on is the “resolution” part. If something’s going to take a bit longer, be transparent about it and let your customers know how and when their issue will be resolved. Even a follow-up email reminding them that you haven’t forgotten them will go a long way. 

Now that you know about the biggest potential pitfall of first contact resolution, let’s move on to how you can improve your FCR rate – the right way. 

Best practices to improve first contact resolution

1. Contextual knowledge

Organizations should equip agents with the information they need to address customer needs—and fast. 

This means your customer service software must be able to show agents a unified view of customer data (e.g. personal details, past transactions, and contact history). Otherwise, they won’t be able to engage with customers in a personalized way, which is key to the success of any modern service encounter. 

But that’s not all. Key decision-makers should also adopt knowledge-centered service (KCS), a service delivery method that focuses on knowledge being the most important thing for any customer service team. 

The purpose of KCS is to help agents solve cases faster by maintaining a culture of learning, knowledge sharing, and collaboration. Businesses that use this approach make documentation a key part of the problem-solving process. As a result, agents are encouraged to proactively create or improve articles in their company’s knowledge base. 

If an agent deals with an unforeseen customer problem, they should create a work-in-progress (WIP) article that outlines the context of the issue, even if they don’t have a solution for it at that time. If other agents encounter a similar issue, they can add to it. 

Once a solution is found, it should be added to the WIP article and marked as done, further reducing the chance work will be duplicated.

KCS can feel like a big time investment, however, with an intelligent knowledge base, AI handles most of the work – meaning your knowledge always stays fresh and your agents are always up-to-date.

2. Intelligent routing 

Another way you can boost your first contact resolution rate is to take advantage of intelligent routing

Intelligent routing is the practice of directing customer cases to the right agent, at the right time, and in the right order.

It’s all about prioritization. Instead of putting customers in touch with agents on a channel-by-channel basis, be strategic about it. For example, you might want to evaluate each customer case using the following criteria: 

  • The urgency of the inquiry 
  • The complexity of the inquiry
  • The caller’s previous reasons for calling
  • The caller’s account status (are they a VIP or high-value customer?)

With these in mind, you’ll be able to automatcially connect customers with the most appropriate agent, according to their skill set, track record, and training. 

By prioritizing inquiries based on specific criteria, organizations won’t need to redirect or transfer calls as often. This reduces wait times and improves the customer experience, boosting FCR rates in the process. And, by ensuring your most valued customers always skip to the front of the line—and customers with urgent inquiries don’t need to wait—you’ll build trust and loyalty. 

So how do you get started? 

You’ll need a software platform with intelligent routing capabilities. Find one that lets you build conversation flows, route customers based on priority, and leverage each of your agents’ skills. 

3. Powerful analytics 

If you want to boost your first contact resolution rate and prevent customer churn, you have to turn to your customers – and the data you have about them. 

There are two types of customer service data: quantitative and qualitative. Both of them are key to understanding the customer journey. Quantitative information lets you understand what’s happening – example metrics include average handling times, number of daily customer queries, and so on. 

Qualitative information, on the other hand, helps you analyze why an issue might be happening. Most of the time, this comes in the form of written or spoken feedback from customers. 

As you place both pieces of data on a customer journey map, you’ll be able to identify any hiccups your customers may be experiencing and resolve them. Just be sure to examine the cause, not just the symptoms. This is called root cause analysis, a problem-solving method that puts emphasis on tracing issues back to the original source. 

Here’s an example. Say your customers are getting frustrated because some of your agents aren’t fully helping them with a payment issue. You take those agents aside and show them how to fix it. Better, right?

But the complaints keep coming in about other agents. You dig deeper and realize that the problem isn’t with your agents – it’s the fact that this particular problem hasn’t been adequately covered during the training and onboarding process. 

So you solve the problem by holding a training session for the entire team and making sure that this topic is included in your training program moving forward. 

By addressing systemic and structural problems in your customer service operations, you can better anticipate customer needs – allowing your agents to resolve more cases at first contact and improve your FCR rate. 

Retention > acquisition

Chasing new customers is a lot more expensive than keeping your current ones happy. That’s why it’s so important for organizations to stand out from the crowd and provide quality customer service experiences. 

Beyond these three best practices to improve first contact resolution rate, the right chatbot can add much-needed steam to your customer service engine, taking care of those repetitive inquiries that, while not particularly high-value, can take up much of your team’s time and energy. Questions like “where is my order?” can easily be solved by a chatbot, and will only help improve your FCR.

This has the added benefit of taking pressure off your agents, so they can focus on customer issues that have a greater potential business impact or are more urgent – building long-term loyalty and keeping your customer base healthy, even during a recession.


Francesca Valente

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