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Mystery Shops: Retailers – Now Is The Time

mystery shop

Have you heard of the runaway success of the burger franchise Five Guys?

What’s one of the big reasons Five Guys is wildly successful? They send mystery shoppers out twice a week to all locations. The brothers who run the operation also constantly visit the restaurants.

Five Guys knows you need to inspect what you expect.

High standards each and every day ensure the right employees do the right things.

Training new retail employees to 100% and then making them work for managers who don’t run the shifts up to high standards is spinning your company’s wheels and lowering the brand perception in customers’ eyes.

That means it destroys profits. There’s only one way to avoid that: an ongoing program of mystery shops.

The number one thing business owners tell me is, “I just need more customers.”

Wrong, you need them to return. You can’t attract your whole neighborhood to try you, deliver lousy results and expect just getting “more bodies in the door” will work.

You can burn through a neighborhood with bad word-of-mouth and, without mystery shoppers, never know it.

Five Guys franchise with over 1000 locations sees the value in nearly 50,000 shops in a year, shouldn’t you? Oh right, the money.

You might not blink at spending $500 per month in advertising, but balk at spending a fraction of that on measuring customers’ experience in your store.

That’s just plain dumb.  The profit comes from the people wanting to return, not the discount promotions you run to entice new shoppers.

And please, get out of the idea that mystery shops are a way to spy on employees for compliance.  That’s what they’ll think if you don’t present it correctly.  It’s also what many lesser services use as their logo.

If you want to fire someone, you don’t need a mystery shop to prove it.

Here’s the thing, if you aren’t servicing your customers the way they believe you should, you open the door to competitors eager to take your business.

It’s not what your regulars tell you, its what the new customers tell you that matters most.

And one shop every six months is so random that it reveals little. Why? Because a mystery shop is just a moment in time. You aren’t that good if you get 100% and you aren’t that bad if you get a 50%. But over time patterns emerge that make managing your customer experience much clearer.

11 Benefits of Mystery Shops:

  • Monitored and measured service performance
  • Improves customer retention
  • Makes employees aware of what is important in serving customers
  • Monitors facility conditions
  • Ensures product/service delivery quality.
  • Supports promotional programs
  • Allows for competitive analyses between locations
  • Identifies training needs and sales opportunities
  • Ensures positive customer relationships on the front line.
  • Enforces employee integrity and knowledge.
  • Supports hustle by employees to meet customers. See previous post.

But not all mystery shopping companies are the same. Far from it!

One client of mine told me how he found the shoppers had never even BEEN to his store.  (You can check and make sure your mystery shoppers are members of the industry association to assure they are reputable.)

Another client said she’d tried mystery shoppers but it “didn’t work.”  When I looked at her survey it came screaming off the page why it wasn’t successful because every question was subjective. “Did you feel valued as a guest?” “Did they attempt to meet your needs?” “Did you feel welcomed?”

Shoot me.

What would feedback have looked like to the employee who got a low score on her shop? “Gee Sally, the customer didn’t feel valued as a guest. Try harder.”

Reminds me of the old days in chorus when the conductor yelled at us to “sing in tune.”

If Sally or the choristers knew how to do that, they would have done it.

Questions on a mystery shop need to be black and white. The employee either did or didn’t say, “Good morning, good afternoon or good evening.” They either described a product using features  (it has) with benefits (to the customer) or it didn’t. In addition, you need a narrative so compelling you can actually see the transaction in your store.

The final three questions I always ask at the end are the most important section. One of mine is, “Would you be willing to drive past a competitor to return to this location based on the service you received today?”

I work with clients to get their mystery shopper surveys just right and actionable. One client with 14 locations is now tops in her franchise; another’s average check continues to rise. Is it a mystery? Nope, a mystery shop.

Yes you can try to save money by putting those surveys on your receipts and training your cashiers to “circle the web address and tell them what the prize is” but that’s not a true judge of the experience.  Those who had a rotten experience will be looking for some compensation and many will quickly checkoff whatever radio buttons they need to qualify their entry for the prize.

Oh and one more thing…

When you use a mystery shopping company, don’t just print it out and stick on the employee bulletin board. Good or bad it should be gone over with a supervisor in private with who did what when. Then they should go over it in private with the employees who were on.

Only then, after those who were most responsible for the score have been counseled should you share, ideally in a store meeting. Delete the names, dates and times so they aren’t guessing who was responsible or you’ll defeat the learning for the team.

To succeed in a lurching economy, as competitors cry the blues and leave your market, you need to consistently provide clear expectations and demand high standards of well-trained employees.

Cutting another shift or saving ten cents on freight is like a poor marksman looking at the edge of the target.

The real money is on the bull’s eye of selling the customer.

What say you?

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Posted by Bob Phibbs, the Retail Doctor on August 10, 2012.

This entry was posted in Management and tagged , , , , , , . Bookmark the permalink.

10 Responses to “Mystery Shops: Retailers – Now Is The Time”

  1. [...] Interactions found me and thanked me for my blog,” You stated the value proposition of mystery shopping better than I’ve seen anyone do.”  I also had owners, Directors and managers waiting for [...]

  2. I read your post with great interest. I agree with the premise and your observations but not with the underlying conclusion that mystery shopping is the only solution to the problem.
    What you are describing are the benefits of a compliance process. This process must be done regularly. The questions must be unequivocal. We have found that measurement actually breeds compliance. But nothing prevents the organization’s own District Managers from doing this. Indeed some of the most operationally successful QSRs I know do precisely this. They use web and mobile-based operational compliance/store walk tools such as Compliantia and rip many of the same benefits you discuss in your blog.

    • bobphibbs says:

      Thanks for commenting Fabien. While DMs can and do do spot checks, they have no way of being a “new customer” to the business – their eyes are jaded in some ways to some of the things easily apparent to a newcomer. Mystery shops that are well-done with a narrative component let the owner see exactly how the transaction went down, not just a series of checked boxes. I think there is room for both.

  3. Bob, I agree that the two activities are not mutually exclusive. When a District Manager does a visit, I call this “quality assurance”. The visit is meant to be a preventive process to ensure the organization’s operations are conducive to efficiency, safety and customer satisfaction. The DM is encouraged to be a coach, not just a cop. This is partly why compliance is, in and out of itself, a virtuous process that engages the store owner/franchisee. Mystery shopping is more like “black box” testing, less interested in the process, more focused on the outcome.
    The two activities also have different scopes. District managers will typically address the front-of-the-house, back-of-house and health and safety while mystery shopping typically focuses on the front-of-the-house and the customer experience. At the end of the day, you need quality assurance, preventive measures and coaching. You also need unbiased third-party customer-centric validation.

  4. [...] a comment » I read Bob Phibbs’s (you might know him as the Retail Doctor) blog post on mystery shopping with great interest.   Bob stresses the importance of a compliance process that is done regularly, [...]

  5. Nadia Parikh says:

    Mystery shopping is a great way to make some extra money, and to get reimbursed for some big tisket items. I participated in EvaluateIt’s Via Rail campaign. It was great! I was reimbursed for half of my ticket from Windsor, Ontario to Toronto, Ontario.

    I have also done some mystery shopping for a Canadian company called SQM. They are a really great company to work for; they treat their shoppers really well. I would recomend them to anyone who wanted to make some extra cash.

    They do mystery shopping for companies in Canada and the USA.

  6. Patrick says:

    Great article. This is something I’m always interested in knowing from my customers. They’re happy to tell me about service at other businesses, but I’ll never hear about mine.

    This part of the article hit home to me, “The final three questions I always ask at the end are the most important section. One of mine is, “Would you be willing to drive past a competitor to return to this location based on the service you received today?”” I always received fair to poor service from Home Depot. I now drive past 2 of their stores to shop at Lowe’s. Their service is stellar in every department, and as a bonus, their prices are lower. That’s how I want my customers to feel.