In conjunction with our annual mystery shopping issue, I put a call in to Mark Michelson, president of the Mystery Shopping Providers Association (MSPA), to catch up on what’s going on in the mystery shopping biz. Michelson, who is also president of Michelson & Associates, an Atlanta marketing research firm, co-founded the MSPA in 1998 and has seen the industry grow quite a bit in a short time. "We have more and more companies using mystery shopping and more varieties of companies using it, everything from hospitals to e-commerce companies wanting to test the service of their Web site."

Correspondingly, the number of firms offering mystery shopping services has increased. Many marketing research firms have added mystery shopping departments or capabilities and a host of other kinds of firms now offer shopping services. "From our perspective, it’s good to have research companies entering into it because they know how to use market research techniques in designing questionnaires and in reporting the findings," Michelson says. "Problems arise when you see, for example, people from the restaurant trade who decide to get into the business and they have no experience designing questionnaires and doing reports. These things tend to damage the industry because clients have a bad experience with someone who doesn’t know what they’re doing and they shy away from using mystery shopping because of it."

As the industry has grown, so has public awareness of the mystery shopping process, which in turn has led to a number of scams associated with the shopper recruitment process. Most are "get rich quick" cons that wildly overstate the income consumers can earn as mystery shoppers as an enticement to get them to buy materials (often nothing more than a list of shopping firms) that will help them locate shopping jobs. (The MSPA offers such information free of charge on its Web site, www.mysteryshop.org.) "We’ve been working with postal inspectors and Better Business Bureaus across the country to find these scamsters and shut them down but they tend to move around a lot. Once we put them out of business in one city they move to another one, rent a post office box and they’re back in the game. So we have to be pretty diligent in watching for them. We’ll go out and buy their materials and if we can prove they are misleading consumers, the posta! authorities are happy to assist us in shutting them down," Michelson says.

It’s not just consumers who are being bothered. In many cases the list compilers will add companies to the mystery shopping provider rosters without their permission and subject them to a flood of phone calls and letters from prospective mystery shoppers.

Battling on another front

The MSPA has been battling on another legal front, fighting state laws requiring mystery shoppers to be licensed private investigators. "In California, with the help of a lobbying firm we were able to get a bill passed to allow mystery shopping to be conducted by people who are not licensed as private investigators as long as the evaluation is not used as the sole performance evaluation for employees. We as an organization agree wholeheartedly that you shouldn’t fire someone based on one bad mystery shopping report," Michelson says.

The MSPA has also worked to forge alliances with research industry organizations, including the Marketing Research Association and the European Society for Opinion and Marketing Research (ESOMAR), Michelson says. "We’re hoping that through education we create an understanding in the general research community that mystery shopping has a place in market research. We agree that mystery shopping is not always market research but it can be used as and classified as market research and it can be included in the family of market research tools."

This year the MSPA will begin compiling information for an industry survey, in conjunction with the Jim Moran Institute in the College of Business at Florida State University - Tallahassee, to determine the size of the mystery shopping business. (Michelson’s best guess is that it’s under $1 billion and more than $700 million.)

Shop the shoppers

Before we closed our conversation, Michelson related an anecdote showing that even mystery shopping firms aren’t immune from being shopped. It seems that the client of a shopping firm wanted to test the veracity of the shopping company’s reports, so the client had the shopping company send shoppers to one of its retail locations each hour during one particular day. Unbeknownst to the shopping firm, the store that day was staffed by the client’s senior management, with the CEO running the cash register. The client firm set a few displays awry, tossed some litter in the bathroom, and generally set itself up for some low marks. Unfortunately for the shopping firm, the reports came back saying that everything was fine at the store. Not surprisingly, the shopping firm lost a very big account.

As the saying goes, he who lives by the sword shall die by the sword.