First call resolution and other essential call center metrics
“You can’t manage what you don’t measure.” they say. Knowing what and how to measure is particularly true in the call center, where key performance indicators such as first call resolution, customer satisfaction, cost per call, etc are a prerequisite for effective decision-making. Yet few call centers use KPI’s to their full potential.
In short, performance measurement and management is a critical discipline that must be acquired for any call center that aspires to world-class performance.
Customer service call center track on average more than 25 metrics. They wrongly assume that they are being productive productive without realizing that quantity is not as important as quality.
Yet, only 5 metrics are fully relevant to track performance in the call center. These KPIs represent the 80/20 rule: 80% of the value you receive from performance measurement and management in your call center can be derived from these 20% simple metrics.
- Aggregate Call Center Performance
Call center metrics that don’t matter (as much)
Before we begin, let’s clarify some of the other metrics that didn’t make it in the top 5 but are considered relevant like: Average Speed of Answer and Call Abandonment Rate.
There is a common miss-understanding of these metrics which results from common sense dictating that if Average Speed of Answer and Call Abandonment Rate are low than performance increases automatically.
Yet, what most managers ignore is that you can note lower these metrics without in reality affecting the cost per call.
This outcome is counter-intuitive but this is what happens.
Eric Zbikowski MetricNet’s expert states:
These facts fly in the face of almost all call center wisdom, which holds that ASA and Call Abandonment Rate should be driven as low as possible.
The reality is that these measures can yield unintended results if pushed too low. They will increase your costs without any corresponding increase in customer satisfaction.
Most call centers commit two major mistakes when it comes to performance measurement: 1) they track too many metrics, and 2) they do not exploit the full potential of their performance metrics as a diagnostic tool.
Call center KPIs to measure for success
The two “foundation metrics” that every call center should track on an ongoing basis are Cost per Call and Customer Satisfaction. The next two metrics in the top five are the ones that have the greatest influence on cost and customer satisfaction: Agent Utilization and First Contact Resolution. And the final metric, what we call an aggregate metric because it provides an overall measure of call center performance, is the Balanced Score.
These five metrics not only allow you to effectively measure your call center performance, but they enable you to:
- Identify strengths and weaknesses in the call center
- Understand and diagnose the performance gaps triggers
- Advise actions to improve performance
- Track and trend performance over time
- Benchmark performance vs. industry peers
- Set up performance goals for both individuals, and the call center overall
Cost per Call correlated with Agent Utilization
It is common knowledge that employees – agents represent the single biggest expense in the call center. In fact, for the average call center, 67% of all costs are labor related: salaries, benefits, incentive pay, and contractors.
Labor costs are the greatest indicator for the cost per call metric, and the agent utilization rate is the best way to measure of labor efficiency. Because labor costs represent the overwhelming majority of call center expenses, there are 2 possibilities:
- High agent utilization = low cost per call
- Low agent utilization = high labor costs, and cost per call
You’d be inclined to think that the best call centers are obsessively committed to keeping their agent utilization rates high. And the vast majority of them are, because this which in turn, has the effect of minimizing cost per call.
Yet, in this scenario a problem arises: high utilization rates taken to the extreme, can actually increase your costs by driving agent turnover rates higher. Whenever utilization numbers approach 80% – 90%, the call center will see relatively high agent attrition rates because they are pushing the agents too hard.
Extremely high utilization leads to burnout, and that, in turn, leads to turnover. Turnover is one of the most costly things that a call center can experience.
In order to proactively manage agent turnover, best-in-class contact centers focus on “career pathing,” training, and time off phones to work on projects. The more time spent off the phones, the more training agents receive, and the more career coaching they have, the lower the turnover will be. This has to be leavened, of course, with the need to keep agents productive on the phones. The formula for determining agent utilization is somewhat complicated. It factors in the length of the work day, break times, vacation and sick time, training time and a number of other factors.
First Call Resolution and Customer Satisfaction
Customers tend to be impatient when they want service. They want a resolution to their problem or an answer to their question, right then and there! Thus customer satisfaction strongly correlates with first contact resolution. The first contact resolution (FCR) is the percent of contacts that are resolved on the first interaction with the customer.
For live calls or web chats, this means that the customer’s issue is resolved before they hang up the phone or end the chat session. Calls or chats that require a customer callback, or are escalated to another source of support do not qualify for first contact resolution. For e-mails, which now account for a significant percentage of all service desk contacts, the de facto standard emerging in the industry is that resolution within one business hour of receiving a customer e-mail counts as first call resolution.
FCR is typically measured in one of two ways:
- the agent checks a box at the conclusion of the call or chat session to indicate that the call was successfully concluded on the initial contact,
- customers are asked in follow-up customer satisfaction surveys whether their calls were resolved and concluded on the initial contact with the service desk.
The first method requires periodic audits to ensure that agents are accurately reporting FCR on the tickets they handle. This is done by reviewing a representative sample of tickets each month to determine whether the tickets designated FCR by an agent are, in fact, being resolved on the first contact with the customer. Neither method of measuring FCR is perfect, but it is one of the most important KPIs to track and trend.
FCR is a measure of how effectively the call center operates and is a function of many factors, including the complexity and types of transactions handled, the experience of your agents, the quality of agent training, and the tools that are available to your agents (e.g., knowledge management, remote diagnostics, etc.).
Gross FCR looks at all incoming contacts and makes no adjustment for contacts that cannot be resolved by the level one service desk.
The formula for gross FCR is:
Gross FCR = Number of contacts resolved initially ÷ All incoming contacts
Net FCR on the other hand makes adjustments for contacts that cannot be resolved directly. The formula for net FCR is:
Net FCR = Number of contacts resolved initially ÷ (All incoming contacts – Contacts that cannot be resolved at level one)
Net FCR is by far the more relevant of the two FCR metrics. In fact, most call centers don’t even track gross FCR because it is often misinterpreted.
As it turns out that customer satisfaction is affected by a whole range of other performance variables, including Average Speed of Answer (ASA), Call Quality, and Handle Time, to name just a few. But the single best trigger of customer satisfaction – by far – is FCR!
Nine times out of ten when customer satisfaction needs to improve, this can be achieved by increasing the FCR. This is why the best call centers pay so much attention to this metric.
The biggest driver of firts call resolution is agent training hours. The clear implication is that agent training pays off in terms of improved FCR, and that, in turn, yields improvements in customer satisfaction. Call center managers need to engage in a variety of tactics to continuously improve FCR, including agent training, investments in knowledge bases, and agent incentives tied to improvements in FCR.
Establishing a single, overall score for your call center is critical. We call this measure the Balanced Score because it truly does communicate a balanced picture of call center performance.
This is a mechanism that utilizes the key measures tracked in a call center, including cost per call, average speed of answer and call abandonment rate, and aggregates them into a single KPI of call center performance. The value of this metric, when tracked over time, is that it enables call centers to determine whether overall performance is improving or declining. Oftentimes, when a call center attempts to communicate its performance to other stakeholders in the business, particularly to people who do not understand call center operations, they quickly become overwhelmed by measures like speed-of-answer and abandonment rate, and they are confused as to how to interpret the results.
They are likely to focus in on one, easily-understood measure like abandonment rate or first-call resolution rate, and draw conclusions about overall call center performance from these two (relatively unimportant) measures.
This is a classic case of “missing the forest for the trees”. It is therefore absolutely critical to communicate the overall performance of the call center, and the Balanced Score is perfect for that. It allows the aggregation of a whole series of measures, the normalization of those measures, and the creation a single all-encompassing indicator of call center performance on a monthly basis.
In this way, the call center can track its overall performance, and, in any given month, may see costs go up or customer satisfaction go down or speed of answer increase, but these individual measures take on a secondary level of importance because the Balanced Score provides a more complete and accurate portrait of call center performance.