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Mystery Shopping As a Marketing Research Tool

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    I. Introduction

                            Mystery shopping is used to measure both the tangible and intangible elements of customer service. It is the practice of using trained shoppers to anonymously evaluate customer service, operations, employee integrity, merchandising, and product quality.  A mystery shopper is someone who visits an establishment, typically a retail store, bank, restaurant or other such places where the public does business, for the purpose of observing and measuring customer service, product quality and the environment of the establishment in general. Shoppers pose as typical customers and are given details, by the mystery shopping company responsible for the shopping program, about expectations for making specific observations during their visits and they complete reports, often using an online form, after leaving the establishment.

                            These shopper’s serve as the eyes and ears for those clients as part of their efforts to enhance the quality of the customer’s experience. Many times, the information collected during mystery shopping programs is used to help mystery shopping company clients improve training programs, better articulate expectations they have of their staff, and otherwise improve the ways in which the client serves its customers

    II. What is Mystery Shopping?

                            Hesselink et al indicate how Mystery shopping aims to evaluate how a business responds to its customers. It is a simple technique where would-be customers who have been previously trained regarding the areas to be evaluated enter a business, use the services available as any random customer would, and report on their experiences. To ensure that a typical experience is captured, the mystery shopper does not inform the employees of their special role. In fact, it is critical for the effectiveness of the program that staff be unaware of who the mystery shopper is. It is extremely important to remember that a mystery shopper evaluates the system, not people.

    II. a. Mystery shopping definition.

                            The Marketing Research Association defines Mystery shopping as:

    “The use of individuals trained/briefed to experience and measure any customer service process, by acting as potential customers / actual customers and in some way reporting back on their experiences in a detailed and objective way.”

    II. b. History of Mystery Shopping
    Mystery shopping has evolved over the years. Initially it was a technique used by private investigators to prevent employee theft, primarily at banks and retail stores. In the 1940’s Wilmark coined the term “mystery shopping” and began using the method for evaluating customer service. It is still one of the most often used research techniques while also being one of the most expensive ways to collect primary data about a customer/employee interaction.

                            In the 1970s, mystery shopping grew exponentially. During that decade, approximately 25 percent to 35 percent of all banks with over $300 million in deposits conducted some type of mystery shopping program. Most often it was a benchmark program with a one- or two-year follow-up. When mystery shopper programs were used in this manner, it was frequently difficult to note changes either for the better or worse because there were no motivational programs in place to encourage change. It was difficult to determine what caused changes that did occur. What prompted the growing interest in mystery shopping in the ’70s was the realization by bankers of the importance of developing a sales culture. And because sales professionalism became increasingly important, a device had to be developed to monitor sales skills, as well as changes in service behaviors in the sales culture. Mystery shopping began to be used as a monitoring device for sales culture development, specifically for tracking sales behaviors and skills. This phenomenon then led to the use of mystery shopping to not only monitor but to motivate performance, set goals or standards and reward performance. Some of the more progressive and sales-oriented banks began rewarding employees based upon the performance of sales behaviors as well as sales successes.

                            In the ’80s, the industry’s new catch-all phrase was “service quality” and, once again, mystery shopping (along with consumer and customer satisfaction surveys) became the industry’s standard for evaluating, monitoring and motivating performance. It was the combination of these two research methodologies that changed the basic mystery shopping methodology to one of a predictor of customer satisfaction. By determining customers’ wants and needs and what satisfies customers most, checking for and reinforcing specific behaviors can be built into the mystery shopper program.

                            The 1990s have called for a much more prominent role for mystery shopping. Some might even call it the decade for “undercover testing.” In this decade, the mystery shopping industry has experienced a rapid growth and acceptance fueled in par by the internet. The 1990s have also brought more demanding, diverse and information-hungry consumers who learn quickly and react quickly, especially when misled. To satisfy consumers’ need for information, companies rely on trained personnel and publications to communicate with consumers. In the 2000’s. the creation of software packages such as ‘SASSIE’ and ‘Prophet’ have revolutionized the industry with estimates of $1.5 billion USD worldwide.

    II. c. Fields Mystery shopping is used in.

                            Mystery Shopping can be used by any business/organization that needs to monitor its operations, facilities, product delivery, and service performance. Newhouse points out its use in banks, retailers, manufacturers, call centers, E-commerce services, government agencies, hospitals, associations, franchise operations, promotions agencies, hotels, restaurants, movie theatres, recreation parks, transportation systems, fitness/health centers, property management firms, and freight/courier services. It is used in all areas and fields where contact channels are to be measured such as:

    ·         Telephone enquiries – where contactability, speed of answering, efficiency, quality, call handling, transfers can be measured.

    ·         Out-of-Hours calls (what do callers meet when ringing out of office hours, what facilities are there for leaving messages and how quickly are they called back)

    ·         Callbacks (returned calls in response to messages left on answer phones or voicemail during office hours)

    ·         Language line (what facilities are there for callers who do not speak English?)

    ·         Text phone / Minicom (contactability, speed of answering etc)

    ·         Fulfillment track (how reliably and quickly is material requested by phone received by post)

    ·         Emails (contactability, speed of answering, efficiency, quality, language, layout)

    ·         Web forms (as for emails)

    ·         Websites (are telephone numbers and email addresses shown valid and up to date? How useable is the site? How quickly can simple tasks be achieved?)

    ·         Face-to-face (are premises easily accessible, well-signed, clean and in good condition, how welcoming are staff, how smart, was there a wait and if so how long, how well did staff handle the enquiry?)

    ·         Letters (contactability, speed of answering, efficiency, quality, language, layout)

    II. d. Different Approaches to Mystery Shopping
    There are two quite different approaches to mystery shopping. These are the market research and performance management approaches.

    ·         The ‘Market Research’ approach, where a reasonably representative sample is used to create a report which provides a snapshot of what a customer encounters when communicating with an organisation, with all data reported at a level which means individuals cannot be identified. This approach certainly provides accurate data but (due to the large sample size) is usually quite expensive. The report will normally provide a set of recommendations but it is left to the organization’s management to take any action required.

    ·         The ‘Performance Management’ approach, where a small sample is used. It is based on a very simple philosophy. If three calls are made to a Switchboard at random times over four weeks, and all score very highly, the chances are that any caller will get a good response from that Switchboard. It doesn’t guarantee that they will, but it does indicate that there are standards in operation and that those standards are good ones. The ‘performance management’ approach focuses less on providing data (though of course it does) than on what is usually the primary objective –performance improvement. This even holds true for a Call Centre where three good calls will give a good idea of the general performance because it is unlikely that a Call Centre will consist of a mix of excellent and awful performers.

    III. Benefits of Mystery Shopping

                            Burnside points out the benefits of a formal program of mystery shopping which include the following:

    ·         Effective ongoing monitoring of customer service performance levels within the organisation.

    ·         Opportunity to ensure that organizational standards and policies are adhered to.

    ·         Ability to identify weaknesses in your current processes with feedback from frontime operations

    ·         Attainment of a better understanding of the perceptions you are fostering amongst stakeholders.

    ·         Creation of an exceptional customer service focus in your organisation as it motivates staff to provide good customer service always.

    ·         Improves customer retention

    ·         Improvement in staff moral and reinforcement of employee-management actions with incentive based reward systems –good customer service is recognized and rewarded and poor achievers are given training to enable them to improve their performance.

    ·         Increase in member recruitment and retention levels as a result of the improved customer service and processes.

    ·         Monitors facility conditions and asset protection while ensuring product/service delivery quality.

    ·         Supports promotional programs and audits pricing & merchandising compliance

    ·         Allows for competitive analyses and identifying training needs and sales opportunities

    ·         Compliments marketing research data

    ·         Ensures positive customer relationships on the front line and enforces employee integrity

    IV. Mystery shopping as a Marketing Research Tool

                            Mystery shopping can be deemed a “cousin” to marketing research (related, but not the same). It is typically more operational in nature than marketing research and is most often used for training and incentive purposes. While marketing research involves determining real customer and prospect opinions, perceptions, needs, and wants, Mystery shopping fills in a gap of information between operations and marketing. Mystery shoppers are not real customers – they know what to evaluate before entering the store and may not typically visit the store they are evaluating. Mystery shopping can not be used alone to determine customer satisfaction. It can compliment, but not replace, satisfaction research and is not predictive of every customer’s experience unless sufficient samples are taken and data analyzed in aggregate.

                            The key advantage of mystery shopping is that it is able to measure the quality of services provided according to pre-set criteria rather than the knowledge or attitudes of service providers or their self-reported behavior. There may be no consistent relationship between provider knowledge and their behavior described by mystery shoppers.

    V. The Reliability and Accuracy of Mystery Shopping in marketing research

                            Jesson says that provided that it is carried out professionally and with appropriate safeguards, Mystery Shopping is a valid and legitimate form of marketing research. It does have certain unique characteristics that distinguish it from other types of research. In particular, “respondents” are not aware that they are the subjects of research. Also, contrary to other Marketing Research standards, identifying the respondent’s name to the sponsor is usually part of the process. This is because one of the most common uses of Mystery Shopping is to evaluate a company’s training program as it relates to customer service delivery. An individual respondent’s performance may be assessed as part of the process. Additionally, it is not unusual for companies to use the outcome of Mystery Shopping as a way to identify employees who need further training or who deserve bonuses or rewards.

                            Mystery Shopping can be considered a legitimate form of Marketing Research when it is employed for Customer Satisfaction purposes; that is, to determine likely customer perceptions and needs. It is not considered Marketing Research when it is used for non-research purposes such as identifying individuals for disciplinary actions, falsely elevating sales by creating a demand for products or services that does not really exist in the current marketplace or obtaining personal information for non-research purposes.

                            In a retail service business, mystery shopping is likely the primary means of measuring customer service delivery along the “production line”.  That is because the most important stages of the production process are marked by difficult-to-measure interactions between customers and employees.  Management cannot possibility witness every exchange between customer and employee.  Yet so much of a customer’s ultimate satisfaction with the company centers on individual interactions.  Mystery shopper studies detail specifics of those interactions, highlighting areas of success and areas needing improvement.

                            Wilson says that when employee performance is critical to customer service delivery, mystery shopper studies provide a consistent performance measure of the human aspect of the service process.   Because the shopper study measures specific performance, it offers opportunities to encourage desired behaviors (incentives) and discourage undesirable behaviors (training).   Mystery shopping studies deal with specific performance criteria expected for each customer’s visit.  Properly designed, a company’s shopper survey provides a clear blueprint for all stages in the process of serving customers. The shopper survey becomes the measure for the benchmark. Resulting date report customer service performance, as judged by the criteria set forth on the shopper survey.

                            Mystery shopping can (if implemented correctly) not only give a good picture of strengths and weaknesses but it can also be the most effective mechanism for addressing any weaknesses found. The use of the technique does help provide a reliable measure of performance relative to an agreed service standard.

    V. a. Value for Money
    Costs for mystery shopping services can vary considerably depending on the method of evaluation – whether it involves physical visits, or using the telephone, internet, etc. It would also need to take into account the complexity of shop requirements, the geographic area to be covered along with the number/frequency of visits and/or evaluations.

    VI. The Efficiency of Mystery Shopping in marketing research
    As Bryson shows Mystery Shopping can be relatively expensive if there are many locations to be shopped. Most mystery shopping programs are objective in nature and miss the subjective “feel” of a location. There is no measure of the atmosphere of the location or the unspoken attitude of the employees even though they are often key to the overall satisfaction of the customer. The mystery shops themselves are usually performed by professional interviewers or others who complete many shops in a short period of time. Although many mystery shopping programs are beginning to incorporate subjective measures, professional interviewers often become biased in their judgments. They become either numbed or overly sensitive to the atmosphere and attitude issues mentioned previously. Therefore, even attempts at measuring subjective variables in a mystery shopping program have questionable results.

                            Further, Mystery shopping does not measure the most important variable of all- the customer’s perception of the service. After all, it is the customer’s perception that really counts, not whether an employee diligently followed each and every operational procedure in the handbook. Another main issue is the common misuse of mystery shopping to use it as a measure of customer satisfaction.

    VI. a. Other research tools
    An alternative to a mystery shopping program is to gain customer feedback on their experience as quickly as possible with a technique known as post transaction sampling. This methodology focuses on the customer and his/her perceptions rather than the employee and his/her adherence to policy. Often post transaction sampling is used in tandem with mystery shopping to harvest the best of both methodologies.

    VII. Current Issues and Challenges

                                The Mystery shopping industry faces certain issues and challenges. Firstly, legal issues could arise regarding private investigator licensing requirements. Tax issues regarding employment of shoppers, consumer scams, maintaining shopper quality and integrity are all issues that could crop up. Challenges facing mystery shopping include faster delivery of reports without sacrificing quality of data, the education of consumers, clients, prospects, and providers on realities of mystery shopping and the wide variety of providers and services.

    VIII. Conclusion

                            Mystery Shopping is a good instrument to create an in-depth insight in perception of customers. It adds value to customer satisfaction data coming from surveys. Mystery Shopping can well be used as an instrument to gather qualitative as well as quantitative information. It is also an instrument to gather objective as well as subjective data. Mystery Shopping should be used in an open transparent way. By communicating through the whole organization the use of Mystery guests, it already gives a signal and stimulus to pay more attention to the perception of real customers. Good communication of the results of Mystery Shopping also can create positive stimuli for improvements.  The empirical research on Mystery Shopping is still scarce. However, the rhetoric and the communication around the instrument might be a much more important factor in relation to the effects of Mystery Shopping in terms of stimulating employees to work on improvements and to become more customer focused.

                            The three main uses of Mystery Shopping can be best summed up as:

    1.      To act as a diagnostic tool for identifying failings and weak points in service delivery.

    2.      To encourage, develop and motivate service staff by linking with appraisal and training.

    3.      To assess the competitiveness of an organization’s service by benchmarking it against that of competitors.

                            As Norris points out “Well designed mystery shopper studies and programs can provide extremely useful data on service quality in a range of settings and subject to appropriate review, they can be ethically acceptable.”

    IX. Works Cited List

    Bryson, Jim. “Mystery Shopping: Uses and Abuses.” 1991. At http://www.quirks.com/articles/a1991/19911104.aspx?searchID=137630&sort=9. Last Accessed May 3rd, 2007.

    Burnside, Arthur. “In-store spies snuff out poor service.” Marketing, 1994. pp. 32-3.

    Hesselink, Martijn; Van Iwaarden, Jos & Van der Wiele, Tan.  “Mystery shopping: A tool to develop insight into customer service provision.” Erim Report Series Research in Management. 2004

    Jesson, Jill. “”Mystery Shopping demystified: Is it a justifiable research method?” The Pharmaceutical Journal. Vol. 272. 2004.

    Marketing Research Association, Inc. “The Code of Marketing Research Standards.” 2007.

    Newhouse, Ilisha. “Mystery Shopping Made Simple.” McGraw-Hill, 2004.

    Norris, Pauline. “Reasons why mystery shopping is a useful and justifiable research method.” The Pharmaceutical Journal. Vol. 272. 2004.

    Wilson, Alan. “The role of mystery shopping in the measurement of service performance.” Managing Service Quality. Vol. 8. 1998.

     

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    Frequently Asked Questions

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    Is mystery shoppers a research tool?
    Mystery shopping is a common market research data collection method where a secret shopper pretends to patronize a business with the intention of collecting information not readily available to the public.
    Is mystery shopping market research?
    Mystery shopping is a form of both qualitative and quantitative market research using professionally trained shoppers to evaluate an experience in a natural storefront or retail environment.
    What is Mystery marketing?
    Mystery shopping is a type of market research that uses a secret shopper to act as a true customer to evaluate the customer experience in-person, over the phone, or online.
    What type of research is mystery shopping?
    Mystery shopping is a type of market research that uses a secret shopper to act as a true customer to evaluate the customer experience in-person, over the phone, or online. The professional mystery shopper evaluates several different aspects of the customer experience which often include: Levels of service.

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