The Relationship between Handle Time,
First Call Resolution and Customer Loyalty

The Relationship between Handle Time, First Call Resolution and Customer Loyalty

Executive Summary

Call center operators frequently assert that quality and efficiency are mutually exclusive goals; that reducing transaction times negatively impacts the customer experience and lowers first call resolution (FCR) rates. The underlying assumption, that longer interactions enable effective service, may be intuitively appealing but is not supported by data.
customer-loyalty

Handle Time, First Call Resolution and Customer Loyalty Research

McIntosh reviewed a cross-industry sample of 5,000 call observations and more than 2,000 customer surveys to understand the relationship between average handle time (AHT) first call resolution (FCR), and customer loyalty.  Data was derived based on a comparison and analysis of call length, call observations and survey responses:

  • The customer’s perception of call length was measured through the survey; customers were asked if the call was:
    • Shorter than they expected,
    • About as long as they expected, or
    • Longer than they expected.
  • The actual AHT for each call was collected during the call observation process.
  • Customer loyalty was measured by the customer’s “willingness to recommend” survey response.
  • FCR, a metric recognized as a primary customer experience driver, was based on customer reported resolution; if the customer was not sure if his/her issue was resolved on the first call, the data point was not included in the analysis.

McIntosh categorized calls by the customer’s call length perception and then compared actual AHT to the customer’s perception. FCR rates and customer loyalty were also tabulated by each call length perception category, with additional analysis focused on high AHT drivers.

The data, outlined in the table below, is compelling and statistically valid (95% confidence, +/- 2% margin of error).

Customer Described Call Length As: Shorter Than Expected (30% of calls) About as Long as Expected (58% of calls) Longer Than Expected (12% of calls)
Actual Call AHT (in seconds) 252 305 361
Percentage of Customers Willing to Recommend Firm to Family/Friends 63% 57% 19%
Percentage of Calls that Achieved First Contact Resolution (FCR) 88% 88% 54%

Data Driven Observations

The customers’ perceived call length mirrored reality; when callers described an interaction as taking less time than expected, those calls had an average AHT lower than calls described as longer or about as long as expected. As the customers’ perception of call length increased, the average call length increased.

Customer loyalty, as measured by willingness to recommend, exhibited an inverse relationship to AHT. As AHT declined, loyalty increased. As AHT increased, loyalty declined significantly.

FCR rates were significantly higher when customers described the call experience as taking less time or about as much time as expected. Calls with the highest AHT had the lowest FCR rates with 46% of those customers reporting that they made additional calls for the same issue.

Calls perceived by customers as longer than expected negatively impacted all three areas being measured with loyalty most severely impacted: loyalty (down 70%), FCR (down 38%), and AHT (higher by 43%).

An analysis of the workload impact of higher AHT and lower FCR call rates indicates that, for this sample, a 10% increase in staffing levels would be required to handle the additional workload.

Conclusions

Efficiency and quality are not competing goals; from the customer’s perspective an efficient interaction is a quality interaction as measured by lower AHT, willingness to recommend, and FCR.

While FCR is the primary customer experience driver, ease of effort is also strongly correlated to positive customer survey results. As evidenced by additional analysis of calls with lower AHT, calls that eliminated unnecessary customer effort were rewarded with increased customer loyalty.

High AHT poses risks to both the business (increased workload and expense) and to the customer experience (loyalty). Both top-line and bottom-line growth depend upon understanding and delivering an efficient interaction.

AHT is a key operational and customer experience metric and should be included on all performance scorecards. AHT’s inverse correlation to FCR and customer loyalty combined with its direct impact on operating budgets, requires a fresh and unbiased approach to this much maligned metric. By understanding and correcting the root causes of high AHT, call center organizations have an opportunity to enhance customer loyalty while reducing operating costs.

McIntosh & Associates founded in 1997, is a call center consulting firm that offers its clients unparalleled expertise in the design, implementation and management of call center operations.