A guide to success
Editor’s note: Chris White is CEO of NOP World Mystery Shopping, New York.
Mystery shopping, also known widely as performance assessment, is a form of participant observation — using trained customers and/or potential customers to observe the processes and procedures used in the delivery of a product or service. Unlike the methodologies employed in mainstream, conventional market research, mystery shopping seeks to measure the service delivery process rather than the service outcome. The emphasis is on what did or did not occur as the service process unfolded, rather than on impressions, attitudes or opinions about the service experience per se.
Establishing service delivery process standards and measuring actual performance against these standards is becoming a critical task for retailers who wish to maintain and, more importantly, grow their brands in domestic and global marketplaces. Global spending on mystery shopping is estimated to be in excess of $500 million in 2004. The methodology is used in almost all major retail markets that touch the consumer: automotive, food service (quick-service and fast-food restaurants), wireless telecom, retail products and services, financial services, petroleum stations, convenience stores, travel and leisure and, believe it or not, local and federal government retail agencies.
Mystery shopping is gaining widespread acceptance as a mainstream management tool for measuring — from the customer perspective — the service delivery performance of an organization, thereby enabling drivers of both employee and customer satisfaction to be better understood — and better managed.
The case for mystery shopping
The use of mystery shopping has developed largely on the back of what is plain common sense — that understanding and meeting customers’ expectations is good for business. Customers don’t buy products or services, they buy results. In any business activity today the most important competitive advantage a company can achieve is excellence in its service delivery process performance. Excellent service will differentiate otherwise similar competitors in a way that is important to customers.
But services are often intangible: they cannot always be measured, tested and verified in advance of sale to ensure quality because the production and consumption of services are inseparable. Thus services differ from products in that quality occurs during delivery. And, unlike manufacturers, service providers do not have a factory to act as a buffer between production and consumption — making the service delivery process especially critical.
Services are also heterogeneous: the quality of the interactions between customers and frontline staff can rarely be standardized to ensure uniformity — in the way, for example, the quality of goods produced in a factory can. The level of interaction, and of customer involvement, makes it difficult to control service quality, while the higher the level of customer interaction, the greater the impact on customer satisfaction (in a supermarket the level of interaction may be low but in a restaurant or call center it is very high).
It is the processes that directly touch the customer (face-to-face, over the counter, on the phone) that are the main contributors to what customers value most and that lead to satisfaction. But the service delivery process is like a chain: only as good as the weakest link. Management must focus on finding the weakest link and uncovering those activities that inhibit the perceived, as well as the actual, performance of the organization. But this can’t be achieved without input from the person most affected by the processes that touch the customer — the customer! The voice of the customer will identify which activities contribute to customer satisfaction and add value.
Any organization interested in delivering quality service must: monitor customers’ perceptions of service quality; identify the causes of service quality failures; take appropriate action to correct failures.
The criteria used by customers in judging service quality are likely to include:
- credibility — trustworthiness, honesty, believability;
- security — freedom from danger, risk or doubt;
- tangibles — appearance of the premises and staff, etc.;
- access — approachability and ease of contact;
- courtesy — politeness, consideration, friendliness and respect;
- communication — listening to customers and keeping them informed in a language they understand;
- understanding — making the effort to know customers and their needs;
- responsiveness — willingness to help customers;
- competence — possession of the skills and knowledge required to perform the promised service;
- reliability — dependable and accurate delivery of the service promise.
These criteria are overlaid with certain core values that influence customer perceptions of the service delivery process when it involves direct contact with frontline staff: tone of voice; facial expression; body posture; grooming; teamwork; empowerment.
Measuring factors such as quality, cost, and asset utilization is straightforward — and objective measures can be used effectively to monitor performance. Measuring the performance of the service delivery process can be done effectively only through the eyes of the customer.
Supplying mystery shopping services
The market for mystery shopping programs has grown significantly over the last 10 years, but so has the number of mystery shopping providers, all now operating in an increasingly competitive market. The Mystery Shopping Providers Association has more than 150 members worldwide. In addition there are as many as 1,000 other companies providing mystery shopping services in the U.S. alone.
Implementing large, complex mystery shopping programs is no longer an activity that traditional market research organizations can simply bolt on to their existing portfolio of services. The barrier to entry is significant. Potential mystery shopping suppliers must be willing to invest heavily in technology, management expertise and online communities to ensure they can fulfill the key prerequisites for today’s discriminating mystery shopping clients. These clients expect and demand high-quality, timely, meaningful and actionable data that is available 24/7 in detailed and rolled up reports that can quickly identify strengths and weaknesses. Indeed, some traditional market research and private investigation organizations claiming mystery shopping expertise may not actually have the necessary processes in place to be regarded as suppliers for large complex mystery shopping services.
Mystery shopping techniques include face-to-face, telephone, Internet and video assessments. While not all suppliers provide all these services, a number have specialized even further, for example in the recruitment of disabled shoppers.
The following summarizes some of the key components that mystery shopping providers and their clients must consider in designing and executing successful mystery shopping programs.
Questionnaire design
The logistics of even a small-scale mystery shopping program are complex. Based on an understanding of the information needs of the client organization, providers must ensure that subjective as well as objective issues are assessed in a way that is both flexible in coverage and useful to all levels of client personnel.
Shopper selection and training
A broad panel of mystery shoppers trained in both generic and program-specific skills is a prerequisite for any supplier. Training resources need to focus on ensuring that all shoppers are familiar with the techniques of detailed observation, memory retention and recall. Further, the recruitment of a broad geographic and demographically representative panel is critical as clients segment customers and look to match shoppers against specific customer profiles.
Quality control
From shopper recruitment through selection and training, fieldwork monitoring, data checking and report publication, quality control procedures validating data and shopper performance must be rigorous and detailed.
Reporting
Mystery shopping providers are obliged to design a hierarchical suite of report formats with content geared for different audiences — the information needs of headquarters management are markedly different from field management, and frontline staff management! Mystery shopping programs must generate information that can be easily interpreted and quickly acted on by the reader. This means that the report design, content and distribution must reflect the needs and functional responsibilities of individual readers, be they frontline staff, field management or corporate management.
For maximum benefit, program findings should be integrated with results obtained from other information sources (such as complaint rates, revenue per square foot, customer satisfaction and competitive surveys), in order to maximize potential benefits and correct weaknesses that may originate outside the service delivery process itself. There should be a continuous linking of facilities, systems and procedures with service standards, staff performance, training and reward mechanisms.
The future?
We see the mystery shopping industry developing along two distinct paths. Small suppliers will continue to collect service performance data, usually at a local or regional level and possibly with the addition of simple summary reports. Larger suppliers are doing this now along with offering services such as interpreting data in order to provide reports and educational materials designed to change the service delivery behaviors of frontline staff. Some companies in the mystery shopping sector are now integrating service performance data along with other forms of research and operational information, thereby providing management with a dashboard-like tool to monitor and manage their customer’s experience in the retail channel.