In today's tough economic climate, smart companies are trying to maximize the value from existing customers . Even in good times, acquiring new customers can cost five times more than satisfying and retaining current customers. At the same time, a two percent increase in customer retention has the same effect on profits as cutting costs by 10 percent. As a result, companies are struggling with one question: How do we keep and expand our relationships with our existing customers? Customer service, with its direct interactions with a company's customers, is the answer.
This renewed focus on existing customers presents service organizations with a challenge: How do you effectively measure your customer experience ? Current strategies are not telling the real story. According to a recent Bain & Co. study, 80 percent of businesses believe they deliver a superior customer experience, but only 8 percent of their customers agree. This discrepancy, coupled with the increased importance of delivering an end-to-end superior experience, has lead to a shift in how service organizations measure their success — driving call centers to introduce new customer-centric metrics like first-call resolution.
In the era of do-not-call lists, the call center remains a unique hub where companies can interact with customers on a one-on-one basis. However, at most companies, too much emphasis has been placed on efficiency metrics like AHT (average handle time), in which agents are encouraged and rewarded for wrapping up calls quickly, regardless of the outcome. Now, as the market shifts toward a more customer-centric view, there is a renewed focus on effectiveness metrics like first-call resolution.
Why first-call resolution? Simply put, it's the best way to measure the overall performance of your contact center. It tells you how well your service organization handles customer requests the first time. Industry experts agree that it's the only true metric that delivers a clear measurement of organizational effectiveness and customer satisfaction. When companies improve their first-call resolution, they also lower costs, improve customer and agent retention and increase revenue.
Focusing on reducing repeat calls will have a positive impact on your customer experience, but organizations that are only concerned about incoming calls are missing a whole spectrum of valuable customer contacts and insight. Customer research tells us that more than half of phone contacts have a self-service contact related to them either before or after the call. Additionally, 25 percent of customers who use the Web subsequently use a full-service channel to complete a transaction.
By only examining incoming calls, many organizations believe they have delivered great customer service because they have a high first-call resolution rate. However, by examining cross-channel contacts it's possible to track a customer's path throughout the organization and truly begin to understand his or her end-to-end experience.
For example, a cable subscriber is interested in upgrading to HDTV. She researches the rates online and even attempts to use the customer service chat feature offered by the cable company. After running into too many dead ends, the subscriber finally makes a call to the cable company's service center. Her question is quickly answered, she is given a reasonable rate for HDTV and she makes an upgrade all within one call. If management looks at only customer interactions in the contact center, it appears that they resolved the issue in one call; however, since the subscriber attempted unsuccessfully to use two other channels before calling, the true customer experience, and the true assessment of a successful contact, is not reflected in the first-call resolution measurement.
Often times, customers have very different experiences not only from agent to agent, but from channel to channel. This is when organizations realize the value of measuring first-contact resolution. But measuring this is no easy task. You need to track customer movement across channels and relate these contacts to one another to understand the big picture. This kind of tracking requires sequencing the contacts for each customer, and then relating them to one another using a consistent set of contact reasons. When you put the sequence and the contact reasons together, you'll begin truly to understand customer behaviors and the customer experience that is being delivered. You can learn where to prioritize customer experience redesign efforts.
Another valuable result of first-contact resolution is that companies can learn which channels succeed at handling specific transitions and which ones fail. For instance, by measuring how often a Web site transaction attempt is followed up by a full-service contact, you can quantify self-service failures and prioritize Web site updates to increase self-service. In addition, this analysis will also identify where your customers are seeking functionality on the Web that is missing and driving calls to your contact center — prime candidates for Web site expansion.
As part of building a comprehensive program to measure and improve first-contact resolution, companies need to examine three key rates:
Each of these first-contact resolution metrics is critical to customer quality. It is imperative that managers are equipped with technology that allows them to appropriately measure and manage first-contact resolution rates by contact reason or customer segment, not as aggregate averages.
In order to truly change the customer experience, service organizations must take a systematic approach to measuring and improving each contact a customer has with the company. Many companies begin in the call center with measuring and improving their first-call resolution since they lack the ability to track customer movement between service channels. But, companies not tracking first-contact resolution across channels cannot see where self-service might be breaking down, where corporate policy is driving customer frustration or where redundancy can be eliminated for a cost savings. By examining the whole customer experience throughout the organization, companies can gain much insight about their customers, not only how they interact but also which channels work best for each customer issue. By making the switch to first contact resolution, companies can realize significant advantages, in cost savings and customer retention.
Ronald Hildebrandt is the co-founder and senior vice president of marketing at Enkata .
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