First Call Resolution & One-and-Done Customer Service E-Mail

By Dr. Jodie Monger, Marilynne Rudick and Leslie O’Flahavan
Part 1: First Call Resolution—Its Impact and Measurement

**Editor”s Note** For tables referenced in this article, please refer to the print version of this issue.

Editor’s Note: As a buyer of many consumer services, I, like many of you, have probably experienced less than adequate customer service at times. But there may be nothing more frustrating that dealing with companies that can’t get it right on the first call. When you, as the customer, have to redirect the agents to the notes on the account from your previous three or four calls in order to get the issue resolved to your satisfaction, clearly there is a process problem in the company. That’s why I believe this article is so important. It addresses the critical link between customer satisfaction and first call resolution. If you can’t do it for the customer, please, do it for the bottom line!

Of all of the metrics that we capture in call centers, there is one measure whose impact is often neglected—first call resolution.

You know the term and you understand the concept behind it. However, you may not fully realize the direct financial impact that this measure has on your budget. Also, senior executives in your company may not recognize how much first call resolution affects customer loyalty and lifetime value.

In this article, we will discuss the importance of first call resolution. We will illustrate the high cost of failing to resolve customers’ problems on the first call. We will then recommend ways to measure first call resolution effectively. Finally, we’ll discuss ways to improve first call resolution—ways that bring benefits directly to your bottom line.

Why This Matters
Corporate pressure on call center managers to justify costs and cut expenses is never-ending. This pressure is, in fact, escalating. It’s all the rage today to tout the cost savings of self-service technologies. Lower cost offshore centers are clamoring for your business. CSRs are wondering aloud about job security. They are all looking to you for answers.

Well, you can rest assured that customers will never abandon the phone as a way of doing business. All of the self-service technologies and options in the world are not going to remove the need for contact centers. In that, your CSRs should take comfort. Job security, however, depends on low operating costs. So, the cost/benefit ratio of delivering customer service by telephone is something that needs your constant attention.

Unfortunately, many cost-cutting measures have a detrimental impact on customer satisfaction. It may seem that you are regularly pitting one against the other. However, you don’t always have to make this trade-off. The key is to find ways to simultaneously lower costs and improve customer satisfaction. Managing first call resolution is one way to accomplish both because you improve customer satisfaction through lowering costs, and get a double win for both your center and your customers. Let’s illustrate how this can be done by looking at a scenario that uses assumptions typicalof many call centers.

What Repeat Calls Cost
For instance, let’s suppose that you manage a call center where your CSRs handle 200,000 customer problems or complaints in a quarter (three-month period). Naturally, not all of those customer issues are resolved on the first call.

For illustration purposes, let’s suppose that 14 percent of those issues require two calls to be handled satisfactorily, 11 percent require three calls, and 8 percent require four or more calls.

As you can see from the table below, these percentages mean that your CSRs would have to handle an additional 120,000 calls during the same quarter. In other words, in this scenario it takes 320,000 calls to handle 200,000 issues!

Next, let’s assume conservatively that your average cost per call is $5.00. We can then see that the direct cost of handling repeat calls for all incidences that are not resolved on the first contact amounts to $600,000 for the quarter, or $2.4 million per year. there are a lot of savings to be enjoyed if you will only measure and manage first call resolution!

Unless you conduct this sort of financial analysis, you may be tempted to measure performance of your center solely by such standbys as average speed of answer and service level. You could find yourself staffing for unnecessarily high call volumes, which would be a costly mistake. Measuring first call resolution brings balance to your key metrics.

Indirect Costs
So far, we have analyzed only the direct costs of failing to resolve customers’ concerns on the first call. The indirect costs are even higher. They, too, are quantifiable.

Field experience in measuring customer satisfaction indicates that caller satisfaction—both with the CSR and with the company in general—will be 5 percent to10 percent lower when it takes more than one call to solve the issue than it is when the issue is resolved on the first call.

What does this reduction in customer satisfaction mean to the company’s bottom line?

Using the same scenario and conservative assumptions, let’s suppose that each caller represents a customer with expected annual revenue to the company of $1,000. Those 200,000 callers therefore represent a $200 million asset to the company.

The failure to resolve issues on the first call have jeopardizes your revenue stream as well. Research shows that customer loyalty is earned from delighting customers, not merely satisfying them. If you are able to delight 50 percent of your callers through the service they receive via your call center, it means that you are protecting for your company and from your competitors $100 million worth of assets per quarter.

A caller whose problem is not resolved on the first call is less likely to be delighted than other callers. (The metrics of this will be examined later in the article). So, suppose that a failure to resolve that 14 percent of issues on the first call results in a reduction of your “delighted” customers from 50 percent to 40 percent. This means that you are protecting only $80 million worth of company assets per quarter, not $100 million. That’s a potential net loss of $20 million per quarter. This should be a very frightening discovery to you, your management and your shareholders!

What Is Important to the Customer

Without a doubt, the indirect costs of poor first call resolution can easily cost five to ten times as much as the direct costs. So clearly, first call resolution is worth the time, money, and effort to measure, track and improve. Here’s how to do it.

Calculating first call resolution is a simple as plugging in your numbers to the equations above in order to manifest the specifics for your call center. However, You cannot simply guess at these variables. You need to know them. And the best place to find them is directly from your customers. Let the voice of your customers tell you how you are doing with first call resolution.

The essential ingredient here is to measure the effectiveness of your service delivery and your customers’ perception of call resolution immediately after the service interaction. To be accurate, customers’ feedback must be immediate. You can capture this through a variety of real-time survey techniques:

• Voice surveys are valuable because that is the preferred method of communication of your callers, but can be expensive
• Automated surveys are excellent because they eliminate interviewer bias and are more cost-effective than using a live person, plus they can capture qualitative and quantitative information
• Mail surveys, callback surveys and email are less effective. They incur too much delay between the delivery of service and your solicitation of customers’ perceptions. In the instance of mail and email, your callers choose not to communicate with you that way, so don’t try to change their behaviors by switching communication methods.

The type of customer perceptions that you want to capture include:

• the quality of service delivered during the callthe customer’s satisfaction with the company overall, with the call itself, and with the CSR who handled the call;
• whether the call was about a problem or was merely a question; ]
• whether this was the first call about the same issue; and whether the problem was resolved on this particular call.

How To Improve
Once you are capturing a statistically valid sampling of calls, you will have the data you need to perform the cost/benefit analysis illustrated above. Once you know the true costs of failing to resolve issues on the first call, you will be more likely to devote the resources needed to complete a root-cause analysis and to make remedial steps to improve.

If you use completely automated real-time telephone surveysto capture information, , it is best to have your survey branch ask open-ended questions of customers who’ve indicated that their problem was not solved on the first call. You can capture—in your customers’ own words—what they perceive to be the shortcomings in how their call was handled. Qualitative feedback of this sort gives you invaluable insight to determine the right corrective steps that you need to take.

Pull Quote:Stop trying to get a grip on your first call resolution problems via the back door. Your customers are the ones experiencing the pain, so go directly to the source.

Many contact centers have employed a variety of technological and manual solutions to help them answer the first call resolution question. Some of these solutions cost thousands of dollars to implement. But not one of these methods can answer the question better than your customers can. Stop trying to get a grip on your first call resolution problems via the back door. Your customers are the ones experiencing the pain, so go directly to the source.

Customers reasonably expect that problems with your products or services will periodically arise. They are generally willing to accept and forgive the occasional occurrence of such problems. That is why they are glad that you have a call center! In fact, if their experience with your center is a positive one, and their problem is resolved promptly on the first call, it is an experience that may actually increase their loyalty.

Fail on the first call and loyalty will suffer — but don’t believe me — ask them. CP

Part 2: One-and-Done Customer Service E-Mail: Ending the E-mail Loops

When communications consultant Gabe Goldberg found he could pay three cents a minute for long distance with a Costco calling card, he e-mailed MCI, his long distance carrier: “When I can pay three cents a minute, why should I pay you nine cents for weekday calls and five cents on weekends?” An endless round of e-mails ensued. MCI”s responses, said Goldberg, “were obviously boiler plate and utterly unresponsive.”

Eventually, MCI offered Goldberg a better rate—seven cents a minute. Goldberg e-mailed back, pointing out that this rate was actually higher than the five cents on weekends MCI was currently charging him. “Your rates aren”t competitive. Tell me why I should remain an MCI customer.” MCI”s response: “Because we have such great customer service.” Goldberg switched to Verizon.

Goldberg said it wasn”t the higher rates that caused him to leave MCI, but the frustration of endless e-mails that made him feel like he wasn”t being heard. Goldberg said his e-mail to MCI required only one human response: “We”re sorry, but we can”t give you those rates. It”s a great deal and we can”t compete.” A quick, frank response would have kept him with MCI.

Pull quote: With the average cost of an e-mail response at $10, spiraling to $20 for complex technical queries, first contact resolution is a must.

Endless customer service e-mail loops are frustrating for customers and costly for companies. Dissatisfied customers take their business elsewhere. With the average cost of an e-mail response at $10, spiraling to $20 for complex technical queries, first contact resolution is a must. But how do you achieve it? These best practices, culled from the College Board, Carfax, RightNow Technologies and eGain, will show you how.

Reduce E-Mail Volume with Self-Service
One critical strategy for avoiding e-mail loops is simply reducing the number of e-mails your company has to answer by making self-service the cornerstone of online customer service. That means making sure “a majority of visitors to a website can find their answer and don’t have to e-mail,” says Greg Gianforte, CEO of RightNow Technologies, a leader in customer service solutions and support.

Proactive self-service includes well-written FAQs, a robust and accurate knowledge base, and giving customers access to their accounts so that they can manage their interactions—check order status, bills and balances. “No one goes to a website hoping to send the company an e-mail,” explains Gianforte. “It”s the support method of last resort.”

Brenda Davenport, Manager of PROFILE and IDOC Vendor Relations for the College Board, found self-service was key to lowering customer service costs. “The more we put online, the lower our costs,” she explains. “We have FAQs and Help all over” the PROFILE web pages to enable students to file financial aid applications online, as well as on the IDOC pages to enable colleges to access the financial reports of applicants. “Applicants can go online and see if we”ve received their forms. That”s really a cost-savings,” says Davenport, explaining that a typical e-mail response costs $8-$9.

David Silversmith, CTO of Carfax, a company that sells history reports for used cars, said that implementing self-service was a hard sell. “Agents and managers were reluctant to believe that self-service help would be effective,” he says.

But now Carfax agents and managers are true believers. Carfax implemented self-service as part of RightNow”s customer support systems. “We saw a 50 percent reduction in e-mails overnight,” Silversmith explains. But a key benefit of self-service, says Silversmith, is “freeing reps from answering basic questions. That gives the staff time to focus on the really difficult questions.”

Use “Contact Us” Forms for Customer Inquiries
“Some customers go immediately to e-mail,” says Gianforte. “They don”t want to self-serve.” Other customers e-mail when they can”t find their answer on the website. For these customers, the key to first contact resolution is the “Contact Us” form that elicits relevant information. “Forms are the number one best practice for one-and-done e-mail,” says Anand Subramanian, vice president of marketing for eGain, a leading provider of customer service and contact center software and services.

Requiring customers to use e-mail forms rather than allowing them to send free-form e-mail enables you to collect the information you need: model number, date of service, warranty information and accurate contact information. “Structured e-mail response forms allow you to parse, categorize, and route e-mails,” explains Subramanian.

Silversmith says Carfax has made it a priority to “enforce the form”—make sure that customers use the web form to submit information via e-mail. Before Carfax developed a response form, e-mail loops often resulted because the customer service agents needed “one more piece of information” before they could resolve the problem. Carfax”s product, a report on a used car, sells for $20. “If we send more than two e-mails,” explains Silversmith, “it”s costing us more than we”re making.”

Route E-mails to the Right Person
Besides helping you collect necessary information, forms enable you to “put the e-mail on the desktop of the right person”—a subject matter expert, a more experienced agent, or one with good writing skills, says Gianforte. “Free-form e-mails are very hard to route. Customers should be able to categorize their inquiry. Make your categories meaningful and don”t offer too many. If people are offered too many options, they click anything.”

Using forms also enables you to route the e-mail to the agent who has had previous contact with the customer. If each time he sends an e-mail it goes to a different person, the customer has to get the agent up to speed on the problem. Gianforte recommends that companies establish routing rules for e-mail from their best customers. “Inquiries from customer A always go to Sally. This gives the customer a higher level of service and cuts the company”s cost, because not so much interaction is required. Routing rules dramatically increase one-and-done rates,” he says.

Equip Your Agents with Good Writing Skills
Forms, systems and routing rules can’t help if the customer service agent doesn”t have the writing skills needed to answer customers’ questions quickly and accurately. “We found out that good phone skills don”t translate to good e-mail writing,” says Davenport.

Writing e-mail requires special skills. In a phone call, an agent can ask follow-up questions to get more information or determine how to resolve the problem. With e-mail, the customers” questions might be unclear, or they may ask the wrong question. The agent has to read between the lines to know what the customer is asking and what information to provide to solve the customer”s problem. That means knowing that if a student asks whether he can file an application online, he also needs to know how to do it and the deadline for doing it, explains Davenport.

Agents have to “answer not just the question, but the hidden question,” says Silversmith. That requires experience and training. To get their agents attuned to customer needs, Carfax has agents act as customers, and “send in their questions and see how the engagement works.” They learn that “when a customer asks X, they also need Y.”

But finding the question is only one part of the equation for writing one-and-done e-mail. Answering the question quickly and accurately is the other part. Davenport brought in an outside writing consultant “that knew more about e-mail than we did,” to teach agents to write concise and accurate e-mail responses. Agents were taught how to structure an e-mail response, how to write for online readers, and how to write mechanically correct e-mail. “We”re College Board and writing skills are important. A missed comma or incorrect word reflects badly on College Board.”

Davenport found that well-written e-mail responses had to “empower” customers. The agent had to provide enough information so customers could complete the application process themselves, but not offer too much handholding, which encouraged customers to become dependent on agents for assistance—and send another e-mail.

Have an Accurate and Well-Written Knowledge Base
The foundation of all “best practices” for one-and-done e-mail—whether using systems or humans to handle e-mail responses—is a well-written and accurate knowledge base. The knowledge base should power both self-service and agent responses. “A shared knowledge base means consistent customer service across agents, geography and channels—e-mail, phone or chat,” says Subramanian.

Because the knowledge base will be used throughout the organization and by the customer, it”s important that input be well-written. Davenport makes sure the knowledge base that fuels the PROFILE and IDOC programs consist of short, concise chunks. Procedures are broken down into easy-to-follow steps.

Gianforte emphasizes that the knowledge base should be kept up-to-date. “When a customer submits a question, it goes to a human who answers the question and then the answer gets added to the knowledge base.”

One-and-Done: The Impossible Dream?
Implementing self-service, soliciting inquiries with forms, and good writing has helped College Board”s PROFILE and IDOC”s programs achieve one-and-done. “Only one in 200 e-mails requires a second response, and a third is very rare,” says Davenport.

You might never achieve this metric, but with more customers going online for information it”s a worthwhile goal that will save your contact center big dollars and help you retain your customers.

Techniques for Writing One-and-Done E-Mail

1. Restate the customer’s question in the opening paragraph of the e-mail. This technique helps the CSR focus on the customer’s question and gather all necessary information. Seeing his question restated reassures the customer that he’s getting the information he needs.

2. Use headings to organize the e-mail. Many customers send complex e-mail inquiries that include several questions, or require several actions for resolution. Headings allow the CSR to highlight the answer to each question or the action the customer must take. Headings make scanning easier so customers can find the answers they need.

3. Make the e-mail brief, but link to detailed information online. Write e-mail that is as brief as possible. Provide links to detailed information online, such as FAQs and knowledge base articles. This lets the CSR write a concise answer while providing access to the details that the customer may need.

4. Use consistent formatting to indicate procedures or instructions. Make it easy for customers to follow instructions or procedures by breaking them down into short, easy-to-do steps. Use numbers to indicate ordered steps in procedure; use bullets to highlight non-sequential points.

5. Write for easy reading and comprehension. Write and format e-mails so that customers—reading online—can easily understand them. That means writing short sentences and paragraphs, and using bullets instead of dense paragraphs.