Mystery shopping: Billion dollar industry keeps retailers in check
Broadcast: January 9, 2001 | Reporter: Jacquie Perrin; Producer: Richard Wright; Researcher: James Dunne
You might see them but you probably won't know they're there - if they're doing their job properly.
They're called mystery shoppers. And there are thousands of them across the country: people who shop for a living to make sure that your shopping experience is good enough to keep you coming back.
Everybody's had a bad experience trying to get the customer service they deserve: like checking into a hotel that has botched your reservation. You may have asked for a non-smoking room somewhere on the first few floors of the hotel. Instead, you've been booked into a smoker's room on an upper floor.
The hotel made a mistake, but the desk clerk doesn't seem to care. You want better service and so does hotel management.
"The guest who walks away unhappy and maybe doesn't tell us, is a guest we might lose and we really can't improve on our services if we don't know," says Ina Whitehead, director of rooms at Toronto's Westin Harbour Castle hotel.
Big hotel chains depend on mystery shoppers like David Lipton, to get a customer eye view. Lipton is president of SQM Inc. He once worked at a hotel front desk. Now his company does the mystery shopping for Westin Hotels.
Lipton scrutinizes a hotel from check in to check out. He looks for things like friendly and helpful staff, clean rooms, and good service.
The 'eyes' have it
"There's a real thrill to it, you know. It has all the aura of the undercover agent," says Joan Pajunen, president of Trend Seek International. "You get to do something you love which is to go out and shop. Imagine being paid to go out and shop."
Pajunen used to be a mystery shopper. Now she's a retail consultant.
"Good mystery shoppers have great eyes," Pajunen told Marketplace. "They're really curious and they see lots of little things that should be tweaked."
Pajunen says it costs a lot more to attract a new customer than to keep an old one, so retailers want to please. All successful retailers, she notes, use mystery shoppers.
A growing industry
Mystery shopping is a billion dollar industry in North America. In Canada, the A. C. Neilsen company is one of the biggest players, with 500 mystery shoppers in the field.
Fred Phillips is head of Store Observation Services for A. C. Nielsen. He says today's customer is driving that trend.
"I think there's a definite difference in the customers' approach to how they shop, and part of that is the maturing of the baby boom generation," Phillips says. "They have more disposable income and they want more service. They're not so price conscious, they're more service conscious nowadays."
We accompanied one of A. C. Nielson's top agents on a hidden camera shopping spree.
Dave has four years in the field. He asked us to conceal his identity. He took us to several locations, including a restaurant and a grocery store. Dave told us the two most common problems he finds are store employees' lack of interest and lack of knowledge.
"Some companies just aren't training their employees well enough to give them enough knowledge to give us what we're looking for when we're shopping," Dave explained.
A.C. Neilsen shoppers go through a rigorous training program. Those who make the grade can earn $10 an hour. For Dave there's the bonus of striking a blow for the ill-served consumer.
"It certainly gives me the opportunity to voice my opinion and maybe it's a voice that will be heard down the road... to assist providing a better shopping experience for somebody else," Dave said.
Driven by profits?
But not all mystery shoppers are used to enhance the customer's experience. Brian was a mystery shopper for the Cineplex Odeon theatre chain for two years.
There were certain things Brian was trained to look for, such as whether there was garbage on the floor and whether employees were wearing their name tags. But he had some concerns about some of the other things he had to look for.
"When we went there we had to ask for a small popcorn and a small drink," Brian explained. "At that point they were supposed to say 'Would you like to up-size?' It seemed to me these things were as important to them in the questionnaire as whether the projection quality was good, whether the sound was good."
Instead of promoting consumer comfort Brian felt his sleuth work was really used to pump up company profits.
Retail consultant Joan Pajunen says mystery shopping is only useful to a company that uses the information wisely.
"The performance of the employee... is really the mirror image of management, so this is really a management report," Pajunen explains. "So before that manager gets on the phone and starts to haul some poor sales associate in East Podunk over the counter, he or she should take a hard look in the mirror, because they are just delivering that which management expects."
Putting shoppers to good use
Geoff Hogarth is the marketing manager for Pioneer Petroleums. He says the company uses mystery shoppers because it's a positive tool for change.
Pioneer sends a mystery shopper to each of the company's 160 gas stations once a month. Employees who do well are rewarded with cash bonuses for high scores on a twelve point report card.
"They're looking to see that... there's a friendly greeting provided, that there's a proper uniform worn, that there's a name tag, that they get bonus bucks... and that their payment was processed quickly and efficiently in a proper manner and that they were given a friendly.... 'Thank you very much,'" Hogarth told Marketplace.
Comments from mystery shoppers have inpired Pioneer to change its customer service practices. For instance, as prices kept climbing, Pioneer's employees stopped asking drivers whether they wanted more expensive premium gasoline.
For consumers, there's some comfort in knowing that there is an army of experts shopping on their behalf, and managers who are listening to what they say, but even the most avid proponents of mystery shopping agree that's no substitute for speaking out against bad service.
"Nothing speaks more loudly than a customer that doesn't come back to your business," says A.C. Nielson's Fred Phillips.
The professional mystery shoppers insist the most effective mystery shopper is you.