The Marketplace of Shops & Shoppers

If your business is new to mystery shopping, you might be tempted to find the lowest-cost provider out there. But there are huge sacrifices in quality with bargain-basement providers.

As we’ve discussed before, cheaper services always prove to be more expensive in the end due to hidden costs of shoddy work, which is why we argue that quality trumps cost when it comes to mystery shopping.

Businesses should be familiar with two main concepts in the industry, the marketplace of shops and the marketplace of shoppers.

The Marketplace of Shops

Mystery shopping is conducted by many businesses across a multitude of industries. So in any town, there may be hundreds of mystery shops occurring on any day.

Thus, your assignments exist in a marketplace with many other assignments. And as with any other marketplace, there is competition.

Experienced customer service evaluators (aka, shoppers) sign up with many shopping companies, and receive many assignment offers every day.

So how do the shoppers decide which assignments to accept and which to refuse?

The best shoppers develop a keen understanding of the relative value of the assignments in their area, and they understand that some assignments offer better value (more money for the work) than others.

Consequently, talented shoppers will know immediately if your assignment is underpaying (in which case they will avoid it) or offering fair compensation (in which case they will accept it).

The Marketplace of Shoppers

Mystery shopping is an art, and some evaluators are simply better at it than others.

The best shoppers prepare thoroughly, act naturally, possess awesome observational skills, and write highly detailed reports.

When done well, a mystery shopping report can make you feel like you conducted the evaluation.  

But not all mystery shoppers are that good.

Your objective is to enter the marketplace of shoppers and make sure to get the best ones, as they will provide the best feedback, and consequently, the best input for improving your business.

But how do you that?

Setting the Price

Landing the best evaluators is simply a matter of offering competitive compensation relative to the other assignments in their area. It’s really that simple.

If you want the most talented and experienced shoppers accepting your assignments, offer enough compensation so that they recognize the superior value of your assignments.

The Consequences of Cutting Corners

Like any industry, cost is a major factor in mystery shopping.

Clients need to understand that the “savings” promised by cut-rate providers usually don’t stem from greater efficiency or know-how, but from offering less money to the shoppers.

But once you understand the marketplace of shops and the marketplace of shoppers, you quickly realize the gaping flaw in this plan.

Paying less on your assignments means that the best shoppers will avoid them, which means that your assignments will only be accepted by shoppers who are inexperienced or desperate enough to accept them.

Consequently, the quality of your reports drops, negating the program’s ability to actually improve your business.  

So keep in mind the marketplace of shops and the marketplace of shoppers, and your program should thrive.

* * * * * * *

[Update: We received the following email from one of our readers/shoppers commening on this post:

• "Very nice article, Ziggy. I agree totally. I turned down a merchandising opportunity just yesterday because it was not even close to valuable to me. ME and TMG are the best when it comes helping clients set an appropriate value for the shopper to consider." -MM 

Thanks so much for the feedback!!! -ZZ]

Passing the Buck

[editor’s note: In reaction to our recent waitress post, one of our regular readers sent us this great tale of their own awful restaurant service. Thanks for sharing!]

Years before I was a mystery shopper, I was in a group of ten eating at a national restaurant chain. The hostess took us to our table, and she motioned to a server to help us. 

The server copped and attitude and told the hostess that she was about to go on break, and to have “Lisa” cover her section.

Lisa, another server, heard this and said it was the first server's responsibility to cover our table.

They argued for 2 minutes about who wasn't going to serve our table.

Great start, people.

Miss Attitude came to our table with a big chip on her shoulder, and her service reflected her attitude. Our drinks were not refilled and we never had enough silverware for everyone.

One of the few members of our party to not get the salad bar had an entrée tossed down in front of her with a little spin and an indignant, "There you go."

Worse, we quickly discovered it wasn't the meal prepared for our table; the server just grabbed it from the pass.

I had had enough!

I found a manager and asked if I could have a moment of her time. Instead of yelling and complaining, I just told her what had been happening. The horror and embarrassment kept growing on her face as I described our experience to that point.

The manager said she was truly grateful that I had brought this to her attention and said she would personally be taking care of us for the rest of our visit.

She picked up the entire tab and offered everyone a heartfelt apology at the end of the meal. 

As a customer, the way to handle dissatisfaction is just as important as the way management fixes the matter. 

"Have you participated in memory loss research in the last 3 months?"

Over on Volition, there's a fun conversation going on about dumb survey questions.

(Volition is an online community for mystery shopping, so many of the posts are from mystery shoppers, panel respondents, and serious survey-takers.) 

I had no idea that so many survey writers add the unforgivable “or not” to the end of questions, as in, “Are you an American citizen or not?”

As one of my favorite bloggers says: “Bad Research! No Biscuit!”

Wagging the Dog

In a recent post, Ray Sola offered a great observation about the misguided nature of many mystery shopping programs.

Ray is the founder and president of Volition.com, which is “the” mystery shopping community site. It’s completely free and offers incredible resources, especially for mystery shoppers. As such, Ray knows all the ins and outs of this business.

So his remarks carry weight. 

He makes several great points, but I want to focus on an underlying theme:

• Done poorly, mystery shopping actually erodes customer service instead of enhancing it.

There are several reasons why this occurs, but two stand out as particularly ridiculous.  

Frustrated with Success

It sounds impossible but it really happens: management can become frustrated with persistently high scores in certain areas, so they stop rewarding for those behaviors. 

We’ve witnessed this on employee behaviors like making eye contact, smiling, and offering assistance. Typically, a minimum of coaching and sales training can get employees performing these behaviors over 90% of the time.

But as months go by, managers can get impatient and start taking these foundational behaviors for granted. So they’ll reduce the points awarded to these behaviors, or –in the worst cases– stop tracking them altogether.  

Ultimately, the employees learn that these basic requirements of good service are not important to their employer, so service in these areas decreases while they focus on other areas that management deems more important, like up-selling.

(But employees who don’t smile or make good eye contact are not as successful at up-selling!)

Disconnect from Customers

Another huge pitfall that undermines good service occurs when management uses a mystery shopping program to promote behaviors that are not important to customers.

In our recent entry, I discussed a restaurant that emphasized managers visiting every table. So to score maximum points, managers would either perform quick drive-bys of the tables all night, or put a hostess in a manager’s shirt and have her do it.

But focus groups with actual customers who had experienced manager table visits revealed that customers get annoyed by fast, superficial, drive-by table visits.

If a manager visits their table and interrupts their conversation, they want it to be a meaningful interaction.

But too many times, they complained, managers interrupted their meals, asked them if everything was okay, but didn’t even stay long enough to hear their answer.

Such visits are so cursory and perfunctory that customers are actually irritated, not pleased.

If the behaviors evaluated by the shopping program had been driven (and validated) by customer feedback, this error could have been prevented.

But instead, the program was driven by management’s definition of good customer service; not their customers’ definition.

* * * * * * *

Mystery shopping can be a tremendous coaching tool that gives employees first-hand feedback from customers.

But used poorly, the tail can quickly start wagging the dog. And even if scores are improving in the areas that are important to managers, overall service satisfaction may suffer from misplaced priorities.

Shenanigans!!!

Last week, Bruce Temkin discussed the ins and outs of tying employee compensation to customer feedback scores.

He offers a few observations on the issue, my favorite of which is:

• "If there is significant compensation tied to any metric (including customer feedback), then people will look for ways to manipulate the measurement."

We have seen this in action, and it’s sort of like the People of Walmart site, in that you sort of need to see to believe.

Not too long ago, we worked with a national restaurant chain that performed several in-store assessments per month.

For one section of the assessment, the evaluators were asked to identify the manager, and note whether or not the manager was seen visiting tables and talking to guests.

One night, at a particular location, one of our evaluators was approached by a young employee wearing a manager’s shirt.

After a short conversation about how the dining experience was going, our evaluator commented to the manager that she seemed awfully young to be managing a restaurant.

To which the employee replied:

• “I’m not actually a manager. Our secret shopping program gives us more points if managers visit the tables, so the real manager has me wear this shirt and visit all of the tables.”

So yes, tying compensation to customer feedback will definitely lead to some degree of shenanigans, and the challenge is to develop feedback programs that offer as little opportunity for manipulation as possible.  

It’s definitely a learning experience (as opposed to the People of Walmart).

Want New Customers? Assess Your Service

We could fill a CRM date base with stories about businesses gaining new customers by implementing in-store assessment programs.

It’s a terrific way to get people who might never have heard about (or considered using) your company to visit your locations and try your products and service.

Over the years, we’ve seen evaluators purchase mattresses, join health clubs, and even lease cars.

Yesterday, one of our evaluators visited a bank to assess how well the loan officer handles refinancing inquiries. Here’s what she said afterwards:

• “I thought it was a great experience and I am actually considering refinancing my loan here after this experience.”

Best of all, this type of marketing is far more effective than any billboard, commercial, or radio spot will ever be, because the evaluators haven’t just heard what an ad company wants them to hear.

Instead, they’ve had a genuine, in-depth, face-to-face experience with a company. That’s not marketing; it’s evidence.

And that’s what generates interest, builds loyalty, and lands new customers.

Unintended consequences

There's an unfortunate perception that mystery shopping is about getting employees in trouble.

But that's not it at all. Instead, it's about providing training tools so that employees can learn and improve.

Here's a great, two-sentence story about an employee trying to make small talk, but instead infuriating a customer.

But without a mystery shopping program to identify these moments and help the employee learn from it, we won't see any improvement in service quality.