Editor’s note: Karen Gomes Moore is an account representative with Customer Perspectives, a Hooksett, N.H., mystery shopping firm.

Many businesspeople, when they first hear mystery shopping explained, are intrigued. They quickly recognize the value of the information provided, but they aren’t quite sure how to use it.

Mystery shopping programs can be used in several ways. And the more ways it’s used, the more valuable the investment.

  • Preparing for the competition. One of the newest uses is to prepare for outside competition. A long-time client of ours, a mid-sized department store with seven locations in two states, learned that two national chains were locating in or near the same mall as its flagship store. The client asked us to do an intensive, two-month mystery shopping program designed to accomplish two things. The first was to take a snapshot of the state of its employees’ customer service skills. The client wanted to make sure that customers were being greeted, helped and thanked. He also wanted to know if the employees’ stress levels were being communicated to the customer (it was the December holiday season). This snapshot evaluation was designed to identify strengths and weaknesses which could then be addressed.
  • Monitoring the competition. Keeping an eye on the competition is another way to use mystery shopping reports. Many of our clients ask us to shop not only their own locations but those of their closest competitors. Using the same evaluation form and the same shopper at each establishment, we can tell our client how the competition is doing, using the client’s own criteria. This has been used quite successfully by banking clients as well as supermarkets and clothing retailers.
  • Recognizing good employees. Another objective of our department store client was to reward employees for excellent performance, thereby emphasizing that only outstanding customer service would retain the shopper loyalty vital to allowing our client to hold its ground against "the big guys."

This client recognized the value of building employee loyalty (through a recognition of excellence program) in order to foster shopper loyalty. Employees who feel valued and recognized pass on their good feelings to their customers. This particular client wanted his employees to feel part of the "home town team" as they prepared to face major competition from the national retailers. The client knew that some of his employees might be recruited by the competition and he wanted to make sure they knew that he appreciated their efforts on the store’s behalf.

  • Recognition programs. Recognition programs are an increasingly common reason for conducting regular mystery shops. We call it "catching the employee doing something right." When one of our clients told us of his plans to institute an employee recognition program, he said he wanted a way "to put the employee’s name up in lights." To institute an effective employee recognition program, you must first decide what it is you want to recognize. Is it the basic customer service amenities, such as saying "Hello," "Thank you," and "Please come again"? Are you trying to promote a new product or service and want to make sure your employees are mentioning it? Or perhaps you just want to keep employees on their toes with the thought that any shopper might be a mystery shopper. If the employee who gets the best report from the mystery shopper is recognized in some way, those goals will be accomplished.

Recognition can take the form of cash, gift certificates, a plaque, a trophy, a mention in the company newsletter, a preferred parking space, or anything else you can dream up!

Closely tied to recognition programs are incentive programs. Customer service evaluations, a.k.a. mystery shopping reports, are often a part of the formula that makes up an employee’s (particularly a manager’s) bonus. Sometimes they are part of contests, pitting stores or regions against one another to determine who can achieve the best scores for customer service.

One caveat we always stress, however, is that the information relayed on an evaluation is not to be used as the sole basis of individual performance appraisals.

  • Measuring training. The most common use of mystery shopping is to measure training. We recommend a program done in three phases.

In phase one, shoppers are sent in to evaluate the existing level of customer service. This provides a benchmark, a place to start assessing what areas need to be addressed in a training program as well as what areas are going well and need to be reinforced.

In phase two, the evaluations are analyzed and a training program is developed, based on identified weaknesses and company standards. The training program is implemented, either company-wide or as a test in a targeted location or region.

In phase three, shoppers return to evaluate the customer service post-training. In this way, a measure can be taken of the effectiveness of the training program, using a custom-designed evaluation form developed to highlight the areas in which training took place.

Areas of continuing weakness can be addressed and trainers can determine what techniques worked well in getting the message across to employees and which didn’t. Over a period of several months - or longer - continued improvement in specific areas can be documented, as can areas of persistent weakness.

A well thought-out, properly managed mystery shopping program provides important feedback about the effectiveness of employee selection and training. The knowledge, on the part of employees, that a store is being shopped can also heighten customer service awareness and thereby upgrade service. In addition, establishing and monitoring standards is usually well received by employees. Such directives tend to eliminate confusion on the part of employees and increase motivation.

Ongoing training and assessment are key to achieving the type of high-level customer service that commands customer loyalty - and repeat business. Mystery shopping can play an important role in determining the customer service your employees are giving - and what they are capable of once the proper training is provided.