Sleuthing the Aisles

- How to Take the Mystery Out of Mystery Shopping

Canadian Grocer, November 2004. Shellee Fitzgerald

Your eyes and ears, mystery shoppers can uncover how your store is measuring up, but do your homework before enlisting the services of a mystery shopping firm.

It is a widely held belief in the retail world that for every customer who complains about the service they receive while shopping there are another 26 who don't bother, they simply leave the store and there's a very real risk that they won't return. In fact, according to the U.S.-based Mystery Shopping Providers Association (MSPA), 69% of lost customers are a result of poor customer service.

Fierce competition, not only from other grocers but also from alternative channels, means customers have more choice than ever before as to where to spend their dollars. Obviously, customer service is a critical point of differentiation from your competitors. And although you recognize this and may be spending lots of money training your staff on how to give your customers the best possible experience in your store, how do you know if this training is really being used and that you aren't just throwing your money away?

Mystery shopping companies insist that this is where they can help. Although the concept of using mystery shoppers to evaluate a store's performance and adherence to standards is nothing new – it's been around since the '40's – in recent years, retailers have latched onto it hoping to gain a competitive edge.

Indeed, there are numerous advantages to using mystery shoppers. By providing feedback from the front lines, mystery shopping reports can pinpoint strengths and weaknesses in your business and ultimately help you boost profits, build customer loyalty and improve the performance of your staff.

“They can work, because obviously having another pair of eyes and another set of experiences looking at something that you do all of the time is really good,” says Len Kubas, president of Kubas Consultants in Toronto. “You get a different perspective.”

And unlike customer comment cards, surveys or even focus groups, mystery shopping reports are completed by trained shoppers who go into your store to anonymously measure specific criteria – determined by you – thereby offering an objective, rather than subjective, evaluation of your store's performance.

“It's factual, we're not measuring perception and that is probably the largest difference within that market research environment,” says Sean Cavanagh, president of Oakville, Ont.-based Tenox Appraisal Systems, Inc., a key player in the industry, “It's reality versus perception.”

While there are clearly many benefits to having a mystery shopping program, you'll have to do some investigating of your own to determine which company will best meet your needs. Here are some key points to consider:

•  First and foremost, make sure the company you're considering is reputable. Mystery shopping is a US$1.5 billion industry (worldwide), and a quick web search will yield a seemingly endless number of companies offering mystery shopping services; not all are reliable or above board. Cavanagh says before making any decisions, retailers should ask the company to provide them with references from clients and make sure to “check those references.” How long the company has been in business and whether or not it has a roster of long-term clients is also a good indication of its performance.

Dawn Boyce, mystery shopping division manager at CV Marketing Research in Abbotsford, B.C. says another way to gauge if a company is reputable is to find out if it's a member of MSPA, the largest professional trade association in the industry. Boyce says members “have to agree to certain standards and rules” set out by the association such as conducting services in an honest and ethical manner.

•  Another important factor to consider when selecting a mystery shopping services provider is whether or not it has experience in your industry. Different companies will specialize in different industries so to get the most bang for your buck it's smart to go with a company that understands the specific challenges of the grocery industry. “It's [grocery] a far more complex shopping experience, from the context that it's very departmentalized,” says Cavanagh, whose company counts grocers among its clients, although he would not reveal which ones. “You've got upwards of 10 different individuals who can actually be evaluated during a visit,” he says, noting that mystery shoppers have to go through and evaluate each of the departments: deli, produce, checkout, customer service and so on. The “shop,” therefore, can take longer, than in other retail outlets and the questionnaire the shopper must complete following the visit typically has more questions and thus more data to review, tabulate and summarize.

•  The geographical reach of the mystery shopping company is an important consideration. If you're an independent you need to hire a firm that can deploy shoppers to your community. If you're a chain operating in several communities or provinces, then you need a service provider who has shoppers in all of those areas so you can get a complete picture of what is happening in your stores and measure whether your customers in Halifax are having the same shopping experience as those in Abbotsford, B.C. or Calgary. “If they're [shoppers] not where you need them to be, it's not helpful,” says CV Marketing's Boyce.

•  When consulting a mystery shopping company, you should find out what level of customer service they can provide and how flexible they're willing to be. Will the company customize a program for you? Will it deploy shoppers when you want and deliver reports when you want them? To what extent will it guide you through the process from helping you design your questionnaire to making sense of the information gathered? How fast is the turnaround of the reports? What technologies are used? The industry is largely Internet-driven these days and most companies use the web to make information quickly available to clients. “I think one of the strong points of any mystery shopping company is the flexibility to adapt to their client's needs,” says Karen Dolan, director of sales and marketing at Premier Service Consulting in Montreal.

•  According to MSPA you should also ask about the company's roster of shoppers – does it have a large enough pool of shoppers to meet your needs? David Lipton, president of Toronto's Sensors Quality Management Inc., another big player in the Canadian market that counts at least two grocery chains among its clients – and which boasts a private databank of 10 000 active shoppers – says you should find out if the provider has its own shoppers or if it shares from a common pool. The latter, he says, “presents a lot of conflict of interest and integrity issues.”

Boyce says next you have to ask how shoppers are selected. “It's fairly easy to get a databank of shoppers,” she says, “but what's your application like? Are there some screening-type questions on there? Once you've used a shopper how do you keep track of how well they've performed?” Boyce, like MSPA, suggests that you steer clear of companies that charge shoppers a fee to apply for work. “How they treat their shoppers is important,” she says, adding there are many of websites you can visit to see what mystery shoppers themselves are saying about how a particular company treats them.

Premier Service's Dolan says good companies will put their potential shoppers through a “rigorous” screening process. “We have a lot of testing that we do with our shoppers and they have to do sample mystery shopping projects first before they're accepted to shop for us and we rate them as well.”

•  The quality of the reports the provider generates is, of course, vital. What sort of quality controls does the company have to ensure the integrity of its reports? Once the shopper files a report, most reputable mystery shopping companies will put the reports through an editing and cross-checking process before passing them on the client. Tenox Appraisal Systems' Cavanagh says validation of the reports is key. “Validation is a huge piece in mystery shopping – in our company all of our mystery shoppers have to send back validation of the visit, they have to send us their receipts . . . not all companies do that,” he says.

•  Price is another big consideration when it comes to choosing a mystery shopping provider. The cost of implementing a mystery shop program varies widely depending on the number of shops you want completed, how fast you want to get the results back (many companies can provide a 24 hour turnaround, if you're willing to pay for it) and the level of detail you desire from the reports. Some companies will offer extra services – for an extra fee – such as training in customer service skills to help clients implement an action plan.

But as an independent can you afford a mystery shopping program? Most companies insist you can. Martin Hoffmitz, vice-president of client partnering at Sensors Quality Management, says: “We work collaboratively with each different grocery group to understand what their budgets are and then work within those budgets. That's an important process because there are a lot of different ways to balance the price-benefit equation,” he says. “An independent grocer with two units has to be handled very differently from a large, national chain.”

Although fewer shopping reports, due to budgets constraints, might mean it will take you longer to get a clear picture of what's going on in your business, CV Market Research's Boyce says, “It's still going to be very valid information.”

However, if mystery shopping is simply beyond your budget, Len Kubas suggests you take it into your own hands. He says you can approach this a couple of ways: first, have your managers act as mystery shoppers at other stores within your chain. “Have one manager look at another operation and use that as kind of constructive criticism.” Kubas says that by keeping it in-house you get two people benefiting from it – the person who des the mystery shop and the manager whose store is being “shopped.” He says this alternative way of conducting mystery shopping can be “very” effective but urges retailers to make sure to use it as a learning tool and ensure there's no retribution or one-upmanship.

“The second way, which is a good way, is actually shopping your competitor's stores,” says Kubas. “What you're really doing is having them go and look at the store and the experience and everything like that and see what they're doing that's great and what they're doing that you could be doing.” Kuba advises you to go further a field when doing this to avoid your immediate competitors figuring out who you are and what you're doing.

•  As a final bit of advice, the MSPA says you should find out if the company “guarantees the quality of their service and shows a willingness to provide a re-shop or credit for any suspect shops.” Make sure you ask about this up front.

Since everyone in the retail business knows that it costs much more to get new customers through your doors than it does to keep existing ones, making sure your customer service is top-notch is critical. There are numerous companies out there that can help you measure just how good your service is. So shop around and see which one works best for you.

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