In a world where the customer is critical, average handle time (AHT) — the average length of a customer interaction from start to finish, including hold times and transfers — is becoming increasingly obsolete as a key performance indicator (KPI) within the contact center.
Why? Average handle time is cost-focused instead of customer-centric.
But wait. What about the bottom line? What about efficiency? What about ROI on contact center staffing? Isn’t ignoring AHT a recipe for disaster?
Hear us out: Contact centers were created to meet the needs of customers. And customers care much more about getting their problem solved right the first time than how long it takes. Measuring agents’ average handle time may seem like it promotes efficiency and speedy resolution, but you risk losing customers (and revenue) along the way.
So instead of average handle time, what should contact centers measure? Say hello to first contact resolution (FCR).
Although there are different ways to measure and define first contact resolution, it mainly focuses on solving client concerns during the first interaction. And let’s be honest, if customers have to contact you a second time for the same issue, it’s not an ideal situation for anyone.
At first glance, average handle time could seem like a smart KPI for saving money and measuring agent productivity. But the truth is, measuring your contact center’s success by AHT is ultimately like making a short-term investment. Let’s see why first contact resolution is a better indicator of success.
Why Is First Contact Resolution Important?
Although it might seem like a cost-saving move, keeping calls short comes at a price. Are your agents hanging up the phone too soon without answering all the client’s questions? Do they use canned answers to wrap up faster? Or, even worse, are they transferring the client from agent to agent so no one exceeds their time limit and stays within the KPI?
Are they ending calls prematurely just to hit average handle time metrics? Such factors might lead to frustrated customer call-backs, or even worse, customers not contacting you again at all and taking their business elsewhere.
In contrast, first contact resolution is a long-term investment. By ensuring that the customer’s call is resolved on the first shot (even if it takes a little bit more time) repeated contacts about the same issue are reduced, time is saved overall, and customers are happier.
It’s not realistic for every contact to be resolved on the first try, of course. But here are a few reasons your contact center should focus on first contact resolution as a KPI instead of average handle time.
1. More Happy Customers
If your contact center can address customer concerns without having them call back, you are most likely experiencing high customer satisfaction. And who doesn’t want a happy customer? Happy customers are more likely to recommend and share your product and/or service with family and friends.
2. Increased Sales
First contact resolution may sound counterproductive to making more sales because more time is spent with each customer. But it’s actually the contrary.
Cross-selling and/or upselling becomes easier with customers who experience first contact resolution as they are more open to hearing about additional products or services that could benefit them from a company that offers quality customer service in the first place.
But making sales is also about not losing them. One unhappy customer can share their negative experience with tens, hundreds, or even thousands of people across their online and physical networks — which could potentially cost your brand hundreds of thousands (and even millions) worth of sales if their reach is large enough.
On the plus side, a winning experience can build a customer for life. And that’s where first contact resolution takes the cake over average handle time.
3. Decreased Agent Turnover
Being a contact center agent is a stressful job. Having to handle a call at lightning speed to meet average handle time expectations, plus unhappy customers who have had to call back can make for an overwhelming role.
By focusing on first contact resolution, agents can take their time to focus on making customers happy and ending on a good note. By adding real value, this focus makes an agent’s job more pleasant and fulfilling, helping them feel confident and satisfied. Happy customers equal happy staff, hence, lower turnover.
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4. Lower Operating Costs
How much can contact centers save with first contact resolution? Spending just a few more minutes on the phone with customers can reduce costs instead of increasing them. Yes, you read that right.
First, a reduced employee turnover rate leads to reduced onboarding costs. No need to hire and train new team members if agent retention is strong. Furthermore, if customers’ responses are resolved the first time, you save money on future interactions.
How Is First Contact Resolution Calculated?
There are several ways to calculate first contact resolution, depending on your organization. But the following two formulas can lay a foundation for establishing this metric:
FCR = (Resolved incidents on first contact/Total incidents) x 100
FCR = (Total incidents resolved – Total reopened/Total incidents) x 100
How To Measure And Improve First Contact Resolution
Measuring the outcome of the call based on the customer’s view can be difficult. Agent feedback can also offer context for first call resolution information, but it’s not an authoritative way to measure performance, as it can be biased. So measuring first contact resolution calls for an integrated approach.
Gauge Customer Perception
Customer feedback can help determine if the issue was actually resolved. If you’re only internally measuring the call, you can’t be sure if the issue was actually solved or if the customer simply gave up.
Obtaining customer feedback promptly is very important as well. Your organization should send a survey shortly after the issue is resolved. Otherwise, you will miss out on a valuable opportunity to help measure performance and improve your services for future interactions.
Using after-call surveys is a great technique to end a call on a positive note and affirm that the caller’s needs were satisfied and reduce any repeat calls. Plus, if survey results reveal the problem wasn’t resolved after all, you’ll have the chance to make things right for your customer.
Ensure You Have The Right Technology
Many CRM systems track customer interactions with the company. But they may not have the capacity to track and measure contact and first contact resolution. Today, customers have many pathways to interact with contact centers. Phone, email, live chat, social media, texting — options are seemingly endless and will only continue to expand.
In today’s omnichannel ecosystem, the channel where a customer starts engaging may be different from the channel where the issue gets resolved. For example, what about when a customer calls about a shipping concern and later receives an email confirmation that the package has been rerouted. That’s two touches, but it could appear to be one without a robust CRM.
This is why your contact center needs to manage every inquiry uniformly and accurately regardless of the form of communication. In other words, the level of service during a phone call must be the same as the service level in an email.
Invest In Smart Agent Training
Invest in your front-line agents by giving them the right training and tools to handle customer calls. Many times, low first call resolution rates are the result of unsupported agents who don’t have the information needed to solve a problem. In hiring, use mock phone calls as part of the process to test out stress levels and understand their phone demeanor.
A great way to improve poor first contact resolution rates is to thoroughly look to see if any of the previous reasons are affecting your rates. Use this information and go to the source of the problem.
When managers put aside average handle time and instead choose to focus on first contact resolution, agents can prioritize the customer above all, delivering the attention they deserve.