Welcome to Mystery Shopping Matters. The sole purpose of this site is to share and exchange best practices amongst end-users of a mystery shopping program. So if you have experience with managing a mystery shopping program at any level for a retailer, restaurant or financial institution please join in.
Companies who use mystery shopping programs to boost productivity and revenue often incentivize employees who attain good results. After all, mystery shopping goals are met by people, and people enjoy being rewarded for a job well done. There’s nothing inherently wrong with rewarding top performers, and it can certainly go a long way towards motivating other employees as well. To be effective, however, incentives must be awarded correctly, and that begins with analyzing the data.
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Mystery shopping provides a cost-effective and often self-funding assessment and feedback required to maintain high standards of customer service. Good mystery shopping programs use myriad methods to provide businesses with the critical data on customer experiences to accurately measure key benchmarks like customer service, store appearance, product placement, and loss prevention. Mystery shoppers gather this data by peering into the heart of your business through the eyes of the customer, systematically working their way through the business’s front-line operations using pre-set criteria to make meticulous evaluations that assess the overall customer experience.
Is cost keeping you from collecting information that leads to higher conversions? Information programs can cost much less than you’d expect-- in some cases, as little as $35 per store.
Consider the following two cases:
Case 1. A national retailer recently increased its budget for an audit of its customer experience, moving from quarterly to monthly measurements because it was able to see definitive ROI from the insights it gained. Spending just $35 per store per month on its mystery shopping program turned out to be “peanuts” when information gathered allowed associate performance and sales to be improved.
$420 a year per store to increase sales turned out to be a bargain. Compare the costs of new fixtures or carpeting. What payback do they offer in comparison? Consider the cost of the 82% of your customers who walk out without making a purchase.>
Unfortunately, too many CFOs look at expenditures from a direct-cost basis without considering the net cost. They fail to see that dollars spent to improve the customer experience drive their top and bottom lines. Expenditures on improving the customer experience are investment dollars, not expense dollars.
Case 2. Another national retailer is stepping up to the plate, even in these uncertain times, by implementing customer and employee feedback systems. The retailer’s objective is to improve their shoppers’ experiences by listening to reactions from actual customers and sales associates. The retailer has commissioned an IVR-driven customer satisfaction program and a web-based employee feedback program. The cost for both of these feedback systems is less than $800 per location annually.
Combining all programs from these two retailers (mystery shopping, customer satisfaction, and employee feedback) totals about $1,200 a year per store, and gives the retailer a 360° business view, providing dramatic payback potential in the toughest retail economic climate in 15 years.
The message couldn’t be clearer. Reductions in programs and information systems leave today’s retailers vulnerable to competition and prevent an understanding of the more demanding mindset of customers. What’s needed is an aggressive commitment to continued information programs, along with complementary data services to fortify retailers for the long haul. Cutting auditing and feedback programs to shore up the bottom line will ultimately have the opposite effect. Partnering with an organization that assists you in communicating the information and in building action plans to foster system-wide improvements, as well as asking the right questions, will deliver the best experience for your customers.
Even in today’s marketplace, customers still have money, but they will become more selective – and will spend that money with retailers who offer them the better experience, no matter what.
How actively do your sales associates conduct follow-through selling? Mystery shopping can help you objectively assess compliance with selling guidelines, utilizing trained shoppers to visit your stores and observe how guidelines are followed. Shoppers are sent into your stores with a list of observables (cleanliness of the store, attitude of the sales associates, etc.) and a list of actions (approached by an associate, had additional merchandise suggested, etc.). After shopping your store, these professionals accurately document their experience and the extent to which they saw each observable and received each action.
Increase Sales By Improving the Customer Experience
Sales strategies and selling themes developed at the corporate level are often not executed at the store level. Most chain executives are so busy and immersed in their jobs that they fail to objectively audit the real customer experience delivered at the store. Sometimes headquarters personnel do not have enough time to conduct store visits and, if they do, it is rare that they actually experience a visit the same way customers do. It is astounding how little most retailers spend on measuring and managing how customers really feel while shopping in their stores.
How Does It Feel To Be Your Customer?
Customer satisfaction surveys provide an accurate view of the customer’s perspective. Satisfaction surveys are conducted by interviewing a sample of your customers to determine their perceptions of your stores and sales associates. Rather than compliance (mystery shopping’s realm) customer satisfaction identifies perceptions – how your customer feels.
The result of a properly conducted and implemented customer satisfaction program is a store-level action plan defining the key drivers of your business – what most needs to be improved to increase your sales.
And that’s how you define the true customer experience.
In good times and bad, retailers’ sales are related to several basic conditions:
• Store locations
• Merchandise offered
• Inventory
• Proximity to competition
• Staffing
Beyond these basics are three additional, service-oriented ways to improve sales:
1. Increasing Conversions
Typically, 82 out of 100 people who walk into a store leave without making a single purchase. That’s a retail conversion rate of only 18%. While this is a statistic begging for understanding, in harder economic times it makes even more sense to know why shoppers leave your stores without making a purchase.
ICC Decision Services offers a sales calculator that easily helps you determine the lift in sales you would receive from an incremental improvement in your conversion rate. As an example, increasing conversion from the benchmark 18% to 25% results in a yearly additional $115K in sales per store! Contact ICC Decision Services to obtain this valuable calculator.
2. Understanding Why Shoppers Leave Without Purchasing
Now we know 82 out of 100 people leave your store without purchasing. But do we know why? Consider conducting customer exit interviews in select locations to uncover the reasons. Exit interviews are conducted on premise, just as customers leave your stores. Trained interviewers intercept these customers, asking them a series of questions that explore exactly why they did not make a purchase. Exit interviews often dispel intuitive explanations. For example, one, big-box retailer discovered they were losing sales not because of inventory outages, but because shoppers could not find the merchandise they wanted.
3. Improve Suggestive Selling To Increase Sales
Our studies show that improving suggestive selling can increase the bottom-line by millions. To effectively increase suggestive selling, provide sales staff with real reasons customers should buy your merchandise, helping staff to reinforce the customer’s decision process.
Of course, you need assurance that sales associates are following through with each and every customer. You can further expand your suggestive sales programs by increasing sales through accessories and related products. Obviously, the more merchandise the customer is exposed to, the greater the likelihood that they will buy something. This means active selling, not passive assistance. Sales associates need to be reminded to actively sell and need motivation follow through.
Financial institutions wishing to ensure compliance with new industry regulations are partly responsible for the growth of the mystery shopping industry. As more regulations are implemented, evaluating employee performance is quickly taking a back seat to regulatory compliance as the most important reason for implementing mystery shopping programs. In fact, three new trends seem to be emerging.
1) Online mystery shopping will continue to grow as more customers access financial products and services via the Internet. A secure and easily navigatable web site is crucial. Comprehensive product and service descriptions, and ease of interacting with bank representatives is also vital to ensure the optimum online customer experience.
2) As use of mystery shopping programs grows, there may be some unexpected benefits. For example, professional mystery shoppers sent to evaluate a company’s regulatory compliance may uncover problems in employee behavior or store operations. This allows others departments, such as sales and marketing, to benefit from the mystery shopping program, even though that wasn’t the plan.
3) Expect the number and variety of organizations using mystery shopping programs to increase, as mystery shopping moves from the expected retail sector to financial institutions, health care, and other less traditional organizations.
Today’s savvy financial organizations use mystery shopping to gather competitive intelligence. Federal regulators, third-party suppliers and watchdogs use mystery shopping to verify bank branches are selling their financial products properly. As the pressure of competition increases globally for all kinds of companies, mystery shopping will continue to be the best way to find out what you really need to know to continue to compete.
Many times, market research departments are put in charge of finding a mystery shopping vendor. Marketing often requires extensive reporting, because they look at things from their viewpoint. However, in the end, it is the stores and the store management team
(the District & Regional Managers) who have to use the information. Report overkill can actually hinder their effectiveness.
Having 100 reports to choose from, and access to a big bank of data you can slice and dice a million ways, might seem like it would be helpful. But at the end of the day, is that really going to change staff behaviors and drive results at the store level?
My suggestion is to keep things simple. A few targeted reports with meaningful, useable data (like basic trending and top opportunities) is enough for most management levels. If market research needs multiple reports, it can certainly be accomplished. But be careful not to get so bogged down in gathering data that the rest of the organization is hindered.
“Less is More’ is the buzzword when it comes to reporting. Gathering lots of different data might seem useful, but in the end, things can get messy and the ability to use data to effect any real frontline staff change is minimized. If marketing wants reports, they can have them. Help managers do their very best on the floor by providing the targeted data they really need.
Mystery shopping is an excellent way to uncover whether your efforts at sales training are effective. While finding a quality vendor to implement the right mystery shopping program can be a daunting task, choosing a vendor with specific experience in your industry will likely yield more positive results. If the mystery shopping vendor you’re considering is a member of a marketing research association, they may be the specialists you’re looking for. Certainly, membership in the Mystery Shopping Providers Association is key.
A big mistake some institutions are making is using existing customers to serve as mystery shoppers. The last few years have seen this trend, because it is a less expensive option. But this method has drawbacks. How would a customer evaluate an employee’s sales skills if that customer does not know how the company has trained its employees to sell? If real customers are used to evaluate employee performance, how does the company ensure those customers can make fair comparisons, or even possess the background needed to evaluate employees? How can the company prevent ‘popularity’, or personal likes and dislikes, from coloring the opinions of customers? Overall, the opinions of customers are far too subjective, whereas professional mystery shoppers understand exactly what to look for and how to report on that measurable criteria.
Additionally, a good mystery shopping program should ‘fit’ your corporate culture. The program that might work for a bank would likely fail for a grocery store. Questionnaires used to evaluate employees must reflect the goals and objectives of that culture. Some companies are more concerned with compliance, whereas others are more interested in pure customer service.
Bringing employees in on the process of designing a mystery shopping program is crucial for its success. A training program, wherein employees are briefed on what will take place and receive instructions on how to meet the program’s criteria, is important. Managers must take the program seriously as well if they expect employees to do the same. When employees know rewards and recognition will be available to them for meeting the program’s standards, employee motivation to comply will be high.
Do your homework when choosing your mystery shopping provider to find the best fit. David Rich, President of ICC Decision Services, explains, “ICC/DS offers clients a coordinated single source partnership for all CEM measurement needs. Our comprehensive portfolio of custom designed management tools can measure all aspects of the customer experience from mystery shopping and competitive shops to customer satisfaction surveys, employee surveys, and compliance audits. Our expert professional staff monitors multiple input data streams to help our clients maintain a competitive edge in today's marketplace. And our top management team is fully engaged and meets frequently with clients to provide insight, recommendations and share industry best practices.”
Ever have a boss you loved to hate? You’d bite your lip when he or she spoke, afraid you might say what you were really thinking. If so, you already understand how employee satisfaction equals the customer experience.
Not long ago, as I shopped at a local discount store, I overheard several employees bashing their boss. Obviously, the ladies did not like their jobs, but they needed the work.
When I asked for help, I received half-hearted service--just enough to get by, nothing more. My customer experience was sorely compromised. Perhaps the boss was difficult to work for. I’ll never know because I won’t be shopping in that store again.
Conversely, I’ve shopped in stores obviously eager to improve the customer experience. The supervisor had a great working relationship with his employees, and it was a pleasure all around. I felt welcomed and valued and received service with a smile.
A good mystery shopping program uncovers necessary information in both these instances. The boss of the unhappy employees doesn’t realize what’s going on behind the scenes. Mystery shopping would reveal it…and explain why his profits are dwindling. Mystery shopping rewards and motivates employees. If they’re unhappy, it can be fixed. If they’re already treating customers well, mystery shopping ensures the retailer’s future.
Employee satisfaction equals a satisfying customer experience. To cater to customers’ needs, it’s not enough to guess. And they’re probably not going to tell you, even if you ask. Like the unhappy employee in the beginning of this story, they’re biting their lips and hoping you don’t notice.
The only way to give customers what they want is to know what that is. And the only way to really know your customers’ unbiased opinions is through mystery shopping.
How can mystery shopping help you give customers what they want? Here are 6 tips to get you started:
1. Long-term employees are an asset- Regular customers are often more comfortable dealing with employees they recognize, especially if they have a problem or a grievance. The best mystery shopping programs encourage excellence, rewarding motivated employees to continue doing a good job, and feeling proud of their customer service skills.
2. Encourage customer loyalty- Good service is great, but a coupon toward the next purchase is better. Teaching staff how to speak with customers and encourage future sales can really boost your bottom line. And mystery shopping can be a wonderful training and teaching tool to accomplish this goal.
3. Keep your word-If you say you are going to do something for a customer, follow through. Employees who are trained to understand store policies and procedures are better equipped to deal with daily issues effectively. Mystery shopping can accurately assess how well your frontline staff is doing.
4. Treat Your Customer as if he/she is the best- How your employees feel about working for your company begins at the top. Motivated employees who value teamwork create a store atmosphere shoppers love. Happy shoppers stay longer and spend more money. A good mystery shopping program can uncover where your store is weakest and strongest. Fix what’s wrong. Reward what’s right. Watch your sales soar.
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