Mystery Shopping

Mystery shopping is a tool used by market research companies, retail stores, restaurants, hotels and many industries as a tool to measure the quality of products and/or services. Mystery shopping, or secret shopping, began in the 1940’s as a mechanism to measure employee integrity.

Secret shopping is also known as: mystery shopping, experience evaluation, mystery customers, spotters, anonymous audits, virtual customers, employee evaluations, performance audits, telephone checks and fulfillment assessments.

The concept of mystery shopping is centered on the idea that the customer’s perspective is important to the success of a business. In order to get an unbiased opinion of a company’s service, secret shoppers anonymously pose as customers and later provide feedback on their experiences and how satisfactory the product was. Companies may use this information gained from secret shopping to benchmark their customer satisfaction rates and find ways to improve the customer’s experience.

The purpose behind the concept of secret shopping is to allow businesses to gain improved customer insight into how the customer service related functions of their business are performing, and utilize the information gathered as part of performance management and service improvement initiatives.

Customer service has become a top priority for many sectors of businesses, especially restaurants, hotels and retail businesses. Customers often shop for product and compare two or more businesses before making a major purchase. With so much competition, usually geographically within a block or two of each other, it is imperative for businesses to out perform their competitors by focusing on the customer’s experience. How employees look, their actions, how many times they smile, how often they offer assistance- every little detail is constantly scrutinized by the customer. These businesses thrive on keeping their customers happy. Mystery shopping is a valuable tool that not only ensures the customer is happy; secret shopping keeps employees accountable and maintains that the bottom line of any business is profitable.

According to a recent US and World report that focused on lost customers by major companies, the report found that of the customers that left:14% left a business for better product, 9% went elsewhere for a cheaper product and 68% left because of poor service or the poor attitude of employees within the business. This study clearly demonstrates the significance of service quality and product quality.

In the service industry, it is not enough if the product meets the functional requirements of the customer. Businesses must also meet certain other customer expectations such as desirable behavior and a pleasant attitude of the person delivering the service. The customer’s satisfaction is the combination of product, environment and behavior/attitude. In today’s economy, it is essential to address what enables the customer’s satisfaction in order to see healthy business growth with the utmost importance given to measuring technical processes, product quality and customer service .

Secret shopping assesses the performance of employees and addresses conformance to the standard set by an individual company and within the industry. Mystery shopping provides feedback on behavioral aspects of service and usually deals within these areas which have been indicated by research publications to enable growth for a company.

·        The responsiveness or readiness of an employee to provide service. Customers want to feel that help is available when they have questions or need guidance in choosing between similar products.

·        The level of courtesy, respect and friendliness of personnel in contact with customers. Customers should feel appreciated and feel that the employee they are in contact with is sincere.

·        The timeliness such as delivering product on time and also first contact resolution. Customers should be greeted and offered assistance within a few seconds of entering a business. Service and product should also be delivered promptly and on time, if not taken by the customer directly after purchase.

·        The complete resolution, otherwise known as listening to the customers. The customer should not be talked over. Employees should answer their questions or seek an answer to the question.

·        That there is good communication and empathy, when appropriate. Speaking in the customer’s language is also desirable, especially when the language is that other than the most common language to the area.

·        Credibility is important to any industry and business. Taking ownership for errors and also resolving complaints are important when providing excellent customer service.

If a customer’s experience matches the customer’s expectations that will lead to customer satisfaction. When a customer’s experience exceeds their expectations that can lead to customer delight and the customer will be more loyal to that business. The goal of secret shopping is to highlight the areas in which a business or individual employee meets these areas and also the areas in which the business or individual employee can improve in order to meet these goals.

Customer retention and loyalty results from meeting and exceeding the customer’s expectations. The focus should not be to simply meet the goals, but to exceed them. Customer satisfaction and furthermore, customer retention demands the continuous improvement in an organization’s capability to examine its processes, environment and attitude. A business with good customer satisfaction and customer retention can not stop monitoring and measuring employee performance and the level of customer satisfaction or it would surely diminish. Secret shopping is a way to guarantee an ongoing evaluation of customer satisfaction.

Studies have also shown that a business can increase their profits by almost 100% by retaining 15% more of their customers than their competitor retains. This is because the cost of acquiring new customers is usually higher than the costs associated with retaining customers. Firms and businesses with loyal, long term customers can financially out perform competitors with higher customer turnover.

Focusing solely on attracting new customers and neglecting customer retention is much like adding water to a leaking bucket. Brining new customers in the door while former customers walk through the door of your competitor can harm your bottom line. This is why management must focus on employee behaviors, service issues and the customer’s experience in order to establish a differentiation between the company’s competitors.

The level and quality of service a business delivers to its customers is vital to the company’s success. The customer’s total experience with a business and the employees within that business dictate whether the business will succeed or fail, whether it will be profitable or not. Simply having expectations about what sort of experience customers should have in not enough. Businesses must measure and inspect. Objective, anonymous, third party assessments of the customer’s experience will provide a business the information needed to ensure the expectations for the customer’s experience are carried out in reality.

Customer service happens; good or bad, it continually happens. It is clear that how service happens can be controlled by managing the areas discussed and that the customer’s perspective is everything. Secret shopping helps capture the consistency and level at which a business provides service. Mystery shopping has one objective in mind: to rate the customer experience.

Once a business has contracted a secret shopping company, the mystery shopping is performed randomly from a third party. Tools used for mystery shopping assessments can range from simple questionnaires to complete audio and video recordings to detailed reports with complete employee background history.

The internet has provided an entirely new outlook on the secret shopping industry as many secret shoppers shop online. Video and audio recordings are also more often shared via the internet and the report, or evaluation, of the mystery shopper’s experience can be sent through the internet. Many secret shopping companies are completely administered through the internet. This allows the mystery shopper to use the internet to register for participation, find secret shopping jobs and even receive payment. The internet also allows the corporation or business being shopped to receive the results in a timelier manner than previous methods.

Secret shopping may be performed by physically shopping at the company, shopping online and shopping on the telephone. The avenue in which the shop is performed also affects the degree and points that can be measures by the shopper. For example, a secret shopper that it physically present will be able to judge the cleanliness of a business as well as how long it took to be greeted. A secret shopper conducting as mystery shop online will be able to assess the ease and user-friendliness of the site and also how satisfactory delivery and response times were. A mystery shopper conducting an assessment over the phone will be able to measure behaviors and attitudes and how knowledgeable the employee. These various methods allow nearly any business in the service industry a way to know what really goes on between the customer and employee. Each method provides its own benefit over the other and oftentimes, these methods can be combined to provide the widest view of the customer’s experience.

When a client company comes on board with a secret shopping provider, a survey model is usually drawn up and agreed to that defines what information and improvement factors the client company wishes to measure as part of the mystery shopping process. Common points of measurement and information provided by the secret shopping service are:

·        The date and time of the visit or phone call

·        The name of the store employee

·        The number of employees in the store, or designated department, upon entering

·        How long it takes before the secret shopper is greeted

·        Whether or not the greeting is friendly

·        The questions asked by the secret shopper in order to help find a suitable product

·        The employees willingness or sincerity in helping the secret shopper

·        The types of products shown to or discussed with the secret shopper

·        If or how the employee attempted to close the sale

·        Whether or not the employee invited the secret shopper back to the store

·        The cleanliness of the store and the store’s associates (when conducting an in person shop)

·        The speed of service

·        Compliance with company standards that relate to service, store appearance (when applicable), and behavior/ presentation.

Mystery shoppers are sometimes given specific target areas or a specific assignment. For example, if a restaurant wanted to monitor the service they provide to customers with special needs, the secret shopper may pretend to have a peanut allergy, a secret shopper in a retail store may ask specifically about financing options, a hotel secret shopper may as for certain services, etc. Secret shoppers sometimes measure everything from the moment they drive onto the property of the client company all the way to the delivery of their purchase. However, not all secret shops include a purchase.

Some secret shopping is intended to measure the sales techniques and presentation of the client company. Not all cases require a purchase. In many instances, a secret shopper will enter a facility or pick up the phone and only inquire about a product or service. Because the shopper does not intend to purchase the product or service, this also presents an opportunity to assess how strongly an employee will try to close the sale.

The shopper will submit the date to the secret shopping provider company. These measurements provide the client company with valuable insight into how the customer perceives their service. The information gathered during the secret shop is then analyzed before quantitative and qualitative statistical analysis reports. The data and reports are then returned to the client company that will measure this information against the previously defined criteria or industry standard.

The most common venues to be mystery shopped are retail stores, hotels, restaurants, fast food chains, banks, gas stations, car dealerships, apartments, health clubs, airlines and cruise lines. Even doctor’s offices are becoming game for mystery shopping, as many patients cringe at the thought of waiting beyond their schedules appointment to see the doctor. Virtually any context in which there is a customer/ employee interaction is open to mystery shopping . In the UK , mystery shopping is increasingly used to provide feedback on customer services provided by local authorities and other non-profit organizations.

A 1994 survey indicated that fast food outlets consistently scored the lowest in customer satisfaction among several industries. Due to this criticism, it is estimated that 75% of the 95 largest fast food chains now use a secret shopping program, up from just 45% five years ago. There is no argument that today’s consumers expect the best price, top-notch products and superior customer service.

The secret shopping industry had an estimated value of nearly $600 million in the United States in 2004. In 2004 secret shopping companies experienced an average growth of 12.2%. The report estimates that more than 8.1 million mystery shops were conducted in 2004. Secret shopping is more embedded into company procedures in European regions, and similar reports are available.

Mystery shopping programs are valuable because:

·        Most customers who have unpleasant and unsatisfactory experiences will not raise their complaint to the company. They will not return.

·        Dissatisfied customers are likely to tell several friends and family about their unpleasant encounter. Who in turn, probably avoid doing business with the offending company. Word of mouth greatly affects the credibility and reputation of a business, whether negatively or positively.

o       It should be noted that negative word of mouth travels more quickly and farther than positive word of mouth. Therefore, it is all the more important to guarantee a positive customer experience.

·        The use of secret shopping to provide independent and impartial feedback reduces any perception of favoritism in incentive programs. Secret shopping can also allow the employee to feel more comfortable in the workplace if they don’t hear that the management is scrutinizing their every move because an anonymous, third party will provide the assessment.

·        Secret shopping helps determine whether customer’s actual experiences are intended. Mystery shopping reveals whether or not good customer experiences are consistent and how they may vary. This allows the client company to purposely set in motion a plan of action that can help increase the consistency of positive customer experiences.

·        Secret shopping programs can identify areas of training which need improvement and can identify areas of training that are working particularly well. Knowing what the successes are will help keep morale up while a business focuses on improving the areas that are substandard.

As discussed previously, there are several types of secret shopping . Services offered by secret shopping providers may include:

·        24-Hour Reporting: Reports/ results are delivered or accessible to a client within 24 hours of the store visit/ phone call/ internet visit. (48 hour and 72 hour reporting follow the same logic.) This is the closest form of real time secret shopping available and provides the fastest results. Because of timeframe, the results are often not as detailed as some reports can be generated but require more time.

·        Audio Recorded Secret Shops: These are secret shops in which sound is recorded. They can be used for either customer service or employee integrity issues. Recording phone conversations unknowingly to all parties involved is restricted in some states.

·        Competitive Secret Shops: These are mystery shops in which a client company contracts the secret shopping company to visit the competitor and information is noted on the same survey used by the client company. These shops are usually requested to compare customer service or pricing with a competitor.

·        Customer Service Evaluation: This form of secret shopping is the most typical form in which a secret shopper poses as a customer and then, after leaving the facility or ending the phone conversation, fill out a survey form regarding policy compliance, customer service, selling skills, facility appearance and/ or product quality. This form of secret shopping is also sometimes called General Mystery Shopping.

·        Customer Service Training: These mystery shops are usually requested and conducted as a follow up to a General Mystery Shop. The results of the surveys are tabulated and based on the information acquired, training will focus on areas needing improvement.

·        Cybershops: Mystery shops conducted via the internet are referred to as Cybershops. They are often used to determine how easily a client company’s website is to understand and how easy it was to find what product or service the customer is looking for.

·        Discrimination Testing: Mystery shops can be used by establishments to collect information on treatment of customers with varying demographics. These are sometimes requested by the client company to ensure equal treatment and sometimes requested by the government. Depending on the setup of these programs, these shops may be restricted by law.

·        Incentive Based Shopping Program: This is a mystery shop program whose results may spur a reward to the employees who were secret shopped.

·        Integrity Evaluation: These are secret shops in which employees are evaluated covertly, in order to measure or determine their honesty. These are usually requested as a result of a problem and typically focus on the cash transaction between the shopper and a specific employee. These shops are restricted by law in some states. It is advisable that only licensed private investigators perform integrity testing.

·        Internet Performance Evaluation: This secret shop utilizes the internet to evaluate performance of internet related transactions. These typically focus on measuring the email responsiveness to customer inquiry from a web site.

·        Internet Reporting: This refers to the capability of a secret shopping company to send reports to the client over the internet, or the capability of a client to access the reports via the internet.

·        IVR (Interactive Voice Response) Reporting: This is the capability of a secret shopping company to receive reports from shoppers via automated telephone response systems. Additionally, IVR may be used to capture comments directly from customers, which can be used in conjunction with mystery shopping as a means of measuring customer satisfaction.

·        Merchandising Audits: These can be over or covert visits by representatives who are asked to check merchandising and point of purchase issues; including, but not limited to, the stocking, placement and pricing of specific merchandise and POP materials. These are usually requested to ensure policy compliance by either a retail store or the manufacturer of the product.

·        Mystery Shopping: This is the use of pre-calculated and qualified consumers, such as independent contractors, or professional staff trained to evaluate a business anonymously using a prescribed evaluation form. The evaluation may take place in person at the business establishment or through public media such as the telephone or internet. Mystery shopping is also referred to as secret shopping, spotter services, shopper programs, undercover performance evaluations, anonymous consumers, shopper audits, virtual customers, and so on.

·        Operations Audits: These can also be over or covert evaluations of adherence to operational guidelines. These are usually survey based with yes / no questions and supplemental comments. They are not based on opinion but rather based on actual measurable policy compliance.

·        Price Audit: These can be cover or over as well, and record the prices of various products or services. They are usually used to evaluate pricing compliance by retailer or manufacturer; or to respond to price changes among competitors. A small price audit of most common or high ticket items may be included in part of a competitor shop.

·        Questionnaire and Program Design: This is a service offered by many secret shopping companies or marketing research companies in which they assist the client with survey questions and program design. The vendor may make recommendations as to the focus of the shop, the content and wording of the questions, the number and frequency of the shops, reporting formats, incentive programs and the use of the information.

·        Specific Individual Evaluations: These are usually integrity related. A shop may be requested by a client because there is a reason to believe that procedures are not being followed by a specific employee.

·        Telephone Performance Evaluation: This form of secret shop utilizes a survey to covertly evaluate the compliance with telephone procedures of an employee or call center. These types of shops may also be performed to evaluate the sales performance of the client company.

·        Video Recorded Secret Shops: These are shops in which video is recorded. This could be used for either customer service or integrity. Video recorded secret shops are restricted by law in some states.

Customer experience measurement should include the objective experience data that secret shopping provides. Mystery shopping records a snapshot of the way in which customers are engaged by the business. Specific measurable items are assessed to provide an objective look at the customer interaction. Mystery shopping can answer important questions a client company may have regarding how long is takes for customers to be greeted and if the associates on the phone are friendly and represent the company well. It may be valuable for a mystery shopping program to be augmented by customer satisfaction surveys, interactive voice response (IVR), and other means of measuring how customers feel about a business. However, customer satisfaction measurements such as surveys, should not by used exclusively to guide customer experience management programs because they are not objective. While gathering information about the attitudes of customers can be important, customer feedback is, by nature, subjective and can be influenced by emotion. The objectivity that mystery shopping provides is critical to any effective customer experience management program.

Bottom line performance can be influenced, in either direction, by many factors. As reported and discussed, customers use the behaviors and attitudes of a company and its employee to determine how satisfied they are and if they will return. So quantifying the financial return on investment of any new incentive can be difficult. The behavioral return on investment in secret shopping programs can be readily measured, though, provided the results of the mystery shopping program are effectively used to change employee behavior. For example, if a secret shopping report reveals that fifty percent of the time, employees fail to thank the customer before ending a phone conversation or before the customer exits the building, the company may take specific steps to ensure that employees understand what the expectations are and that employees should thanks each customer. Subsequent secret shopping may later reveal an improvement in this area. The financial value of that improvement may be hard to gage, but consider this: a customer who felt appreciated and valued is far more likely to do business with a company that a customer who is underappreciated or ignored. Acknowledging customers as they enter and exit your building has also been proven to improve loss prevention and reduce the rate of theft. Both of these factors should be weighed when determining the worth or value of a mystery shopping program.

Mystery shopping has proven to be an asset for those wishing to assess heir staff while off location. Insightful feedback from the secret shopper can not only identify opportunities for improvement, but also highlight trends based on the data collected from the secret shopper’s evaluation.

While many companies allocate funds towards training their employees, very few monitor their program’s effectiveness afterwards. In addition to improving customer satisfaction and customer retention, and as a result, the bottom line, secret shopping also validates that money invested in employee training is worthwhile and productive.

Debate has arisen about the effectiveness of mystery shopping. Those who oppose the practice suggest that an individual who knows nothing about a particular workplace has no business analyzing it. This ideal might be counteracted by arguing that customers enter and exit a business without becoming familiar with its inner workings and yet, they still leave with an opinion about that business- an opinion that will affect that business’ bottom line in one way or another. Secret shopping faces opposition in that some managers feel there could be an explanation for why a certain type of poor service was provided. However, studies show that customers expect a high level of service, despite whatever obstacle the company may be facing. Perhaps a mystery shopper is the answer for some, but not all. Meanwhile, those who prefer a tangible report revealing the way customers generally feel when they leave your establishment, can find it in an unbiased, honest evaluation from a mystery shopper.

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