Taking The Mystery Out of Mystery Shopping

Published in Quirk's Marketing Research Review, January 1997

By Mark L. Michelson

Mark Michelson is President/CEO of Michelson & Associates, Inc.., an Atlanta, Georgia based marketing research company that has provided mystery shopping services nationwide since 1984.

Over the past few years it seems everybody has become consumed with mystery shopping. Companies, consumers and service providers are more involved with mystery shopping today than ever before.

What is Mystery Shopping?
Mystery shopping is known by many names. Secret Shopping, Performance Evaluations, Service Monitoring, Anonymous Customers, Quality Auditing, Service Investigations, Trained Consumers, Service Checks and Frontline Evaluations to name a few.

Mystery shopping, by any name, is an evaluation of the shopping / buying process provided by trained shoppers who know in advance what they are to evaluate. Mystery shoppers visit or call businesses posed as ordinary customers and provide detailed evaluations of their experience using written reports or questionnaires.

Mystery shopping provides companies with a means of monitoring service from the consumers' perspective. It gives management the ability to be the proverbial "fly on the wall." Mystery shopping is used in a wide variety of industries such as retail, manufacturing, hospitality (hotels, restaurants, resorts), property management, multi-family housing, banking/financial, petroleum and c-store, entertainment, travel, utilities, business-to-business, even medical.

Mystery shopping is not new. Mystery shopping got its start over 50 years ago as a way to check on employee integrity and minimize theft primarily in the financial services industry. For several decades now, companies have been using mystery shopping to evaluate employee service and sales performance, monitor pricing and product quality, keep an eye on the competition and ensure compliance with industry and government regulations. Today many progressive companies integrate mystery shopping with employee training / incentive programs and customer satisfaction measurement.

So why does it seem everyone is "suddenly" interested in mystery shopping? It may be attributed to any of the following: an apparently increasing decay in customer service; the growth of chain stores; competitive pressures; and the fact that more companies are promoting mystery shopping services. Perhaps it seems more popular now because companies are getting positive, tangible and actionable results with their programs.

For companies in competitive industries where product pricing and assortment are no longer unique selling propositions, customer service is often the key to success or failure. Consider the following well known marketing mantras:

The benefits of a mystery shopping program are numerous. A well designed program can help train and motivate front-line employees. It effectively communicates to employees what is most important in serving customers. It can be used to measure customer satisfaction along with other methods. It's an important competitive tool in monitoring pricing, promotions and product quality. It can be used to identify potential problems before they develop into major problems.

Big Brother Is Watching
Mystery shopping is used most often as an evaluation of an individual's performance. When evaluating an individual, it is critical that the evaluation is objective and factual. To ensure employee performance evaluation is factual, several states even require mystery shoppers to have licenses. While companies should use mystery shopping to improve employee service or sales skills, and not as a device to spy on them to catch them doing something wrong, it is nonetheless reflective of the employee's ability to do their job.

To take "big brother" out of the picture, it has become more popular to use mystery shopping as a vehicle for presenting awards - either on-the-spot or as part of an overall bonus program. The net effect of awards based mystery shopping is that it has become much more important to employees and managers, which is a good thing.

Employees need to be involved in order for a mystery shopping program to be successful. With bonuses and awards at stake, employees and managers may dispute the reports more frequently and often get involved with playing "spot the shopper." This also has a positive side effect in that employees begin treating everyone as the potential mystery shopper. The strangest argument against a poor report is "I knew that was the shopper!" If this were the case, then why didn't the employee go out of their way to make sure the experience was positive?

Who are the Mystery Shoppers?
In most cases, almost anyone can be a mystery shopper. Mystery shoppers are regular people, typically working part-time as either independent contractors or employees, who are trained to conduct performance evaluations. For consumers, mystery shopping is an intriguing concept that allows them to play an important role in improving customer service while earning some part-time income and benefits.

Shoppers are recruited through classified advertising or referrals. Recently it has become increasingly more difficult to recruit qualified, reliable shoppers no thanks to numerous scam operations (see article on Mystery Shopping Facts and Fiction). Due to these scams many applicants today are seeking unrealistic opportunities to get rich quick or get free big-ticket merchandise such as TV's. Most good shoppers are genuinely seeking to play a role in improving customer service rather than an income opportunity.

Most shopping companies will have candidates complete an application, at no cost, and match shoppers with assignments based on the clients' typical customer profile. For instance, when shopping apartments, there are luxury apartments as well as low income housing. How believable would it be to send a low income shopper to a luxury apartment? Also there may be special requirements for the shop such as when evaluating optical stores - a shopper must wear glasses to complete a transaction.

The training mystery shoppers receive depends on the client's objectives and the company that hires them. In most cases, shoppers are trained over the phone and through written instructions. Shoppers may be trained in person or required to perform "test" shops to evaluate their skills before doing an actual assignment.

How Does Mystery Shopping Compare With Other Research?
Mystery shopping is somewhat different compared with other marketing research methods. It requires more involvement with the training and operations departments than the marketing or advertising departments of clients. It is more labor intensive. It is both qualitative and quantitative. It's research by observation.

Shopping programs require a tremendous effort in recruiting, qualifying, scheduling, training and managing shoppers. In addition, individual shopper reports must be distributed, collected, reviewed, tabulated and summarized in a short time frame. Shopping reports are used by all levels of a client company, and distributing the summary reports in a timely manner is critical.

Who Provides Mystery Shopping Services?
There are many different types of companies that provide mystery shopping services. These include marketing research firms, training companies, private investigators, security providers, merchandisers, temporary agencies, insurance agencies and companies that specialize only in mystery shopping. There are well over 500 established companies in the U.S. that provide mystery shopping services. Most are regional or local, though there are many that conduct shopping on a national or international basis.

Some points to consider in choosing a mystery shopping service provider:

•	Assists in developing a custom report based on specific client objectives and employee training guidelines

•	Has a large pool of shoppers to meet the client's needs.

•	An ability to qualify and train shoppers to perform specific evaluations.

•	Can provide fast turnaround on evaluations and summary reports.

•	Has experience with or knowledge of the client's industry. Many shopping companies specialize in particular industries.

•	A good reputation with their clients and shoppers. Does not charge a fee for shoppers to apply.

•	Guarantees the quality of their service and shows a willingness to provide a re-shop or credit for any suspect shops.

How Much Does Mystery Shopping Cost?
Costs for mystery shopping can vary considerably. The cost depends on the complexity of the shop, difficulty in recruiting, incentives for shoppers (such as free meals), frequency and quantity of shops, length of reports and reporting distribution requirements. The costs generally range anywhere from $25 to $125, with an average fee of around $65 per shop.

There are some basic expenses involved with mystery shopping including recruiting, printing, long distance, postage/freight, field labor, management, data entry and analysis. Some companies charge additional fees to set up a program or provide summary reports. However, most companies seem willing to absorb these costs with an on-going, frequent program. Any required purchase expenses also must be calculated into the overall cost of a program. To allow for flexibility when purchases are required, shoppers should be given an option to either return the merchandise (which could be used as another point of evaluation), or keep the merchandise at a minimal or reduced cost (such as 50% on clothing). Of course meals cannot be returned and are typically considered as part of a shoppers' benefits.

What Makes a Shopping Program Effective?

•	Program must be based on clearly defined objectives with emphasis on existing training, desired behaviors and standards compliance.

•	Communicate the program widely among all employees. Let them know what is expected in their evaluation and what would qualify for a possible award. Share results with employees in a positive manner.

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Questionnaires, or evaluation forms, must be designed to provide objective, observational feedback with a system to allow for checks and balances. A mixture of open and closed ended questions with some narrative for suggested improvements from the shoppers' perspective is advised. Questionnaires should specify the behavior to be measured. Do not ask "was the employee friendly, smiling, courteous and professional" as the employee may be courteous, but not friendly and smiling. Break questions such as these into three different questions.

•	Some questions may be more important than others. If using a scoring system, which is recommended, appropriate weighting of questions is critical. Some questions may not need to have points allocated to them at all, but may be necessary for the overall framing of the evaluation.

•	Questionnaires should be easy for shoppers to complete and should include specific illustrations where necessary to clarify the point of evaluation.

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Category summaries make reporting easier to analyze and digest. A summary page with all category scores and location, shopper and date information is very helpful. Category scores are based on an accumulation of points from individual questions within each category. Categories may include areas such as Telephone, Physical Appearance, Product Quality, Greeting, Understanding Needs, Suggestive Selling, Closing and Follow-Up.

•	Recruiting, qualifying and training shoppers that closely match the clients' typical customer profile. Shoppers must be able to provide clear, complete and accurate evaluations.

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Provide shoppers with specific scenarios and clear written instructions. To ensure all shoppers are providing evaluations on the same issues, instruct all shoppers to ask for the same, or similar products and ask the same kinds of questions. At a minimum shoppers should be given training over the phone and through easy to follow written instructions. In addition, try to schedule all shops to be completed during equal periods. i.e. weekends or weekday evenings only.

•	Quality control completed evaluation reports before distribution to the client. Every report must be checked for validity, accuracy, consistency and objectivity. Shoppers may need to be contacted to confirm their evaluation reports.

The Future of Mystery Shopping
With the new technologies, mystery shopping is changing much like other research. The need for faster turnaround on shopping reports has resulted in service providers seeking more efficient ways to distribute and collect reports. Today many service providers have shoppers complete their evaluation forms on the internet, by e-mail, through fax-on-demand or by telephone.

With the burgeoning competition among service providers, the call to form an industry association has been growing louder. An association would need to incorporate the various kinds of service providers, set standards for dealing with clients and shoppers, act as a unified voice to counter damaging mystery shopping scams and vocalize industry concerns regarding use of independent contractors, licensing regulations and government control.

More companies are discovering mystery shopping and developing new ways to use mystery shopping programs to improve their business. Several new uses include problem shopping, where the shopper presents a problem that the employee must solve; using shoppers as coaches - where after the shop is completed, the shopper then consults with the store manager on their observations and suggested improvements; and having employees showcased, when the shopper presents an award, it is an event celebrated throughout the store. No doubt, there will continue to be more growth and innovation of mystery shopping programs.

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