Editor’s note: Mary Baum is a freelance writer based in St. Louis.

In the summer of 1977, a young woman got a job in a department store - and spent the next three months living in fear that any one of her customers might be a mystery shopper. The customers all seemed nice enough. And she thought she was doing a good job. But what would a mystery shopper say about her to her bosses? What rules had she broken? Worst of all - would she ever know what happened?

Twenty years later, just about every facet of the art and science of mystery shopping has changed - including, sometimes, the name. According to Len Berry in his book Great Service, the phrase "mystery shopping" sounds sinister and makes some people uncomfortable. So one provider of the service, St. Louis-based Maritz Marketing Research, changed the name of its program to Virtual Customers to put a positive spin on its approach to the methodology.

Far from being a sword of Damocles ready to fall on dishonest employees, mystery shopping plays a vital role in measuring and improving customer service. And done right - especially when combined with training, rewards and recognition - it can make everyone a winner.

But as valuable a tool as mystery shopping is, it can only effect change in an organization if the whole company gets on board, from top management to front-line employees. Specifically, management must support the process, believe the report and take action on the results. And front-line employees need to see the big picture and their role in it, to understand that this is a learning and not an evaluation process.

Building buy-in with management

So how do you get management to support the process? With solid objectives, a well-designed program and an action plan that, on re-measurement, demonstrates real improvement.

Al Goldsmith, who directs Virtual Customers mystery shopping programs for Maritz, puts it this way: "We like to position mystery shopping as part of an overall improvement process that incorporates successive waves of measurement and action. For example, we might shop a client’s locations, then do training and incentives based on the results. Then we’ll go back and re-shop to keep the positive results coming."

Showing that cycle of continuous improvement up front lets management know what to expect. And if they’re new to the concept, case studies from other companies in the industry - with documented results in terms of improved sales and customer retention - can go a long way to getting the green light.

That’s how Texaco keeps management interested. "A leading business magazine recently named Texaco Best in the Oil Industry in Customer Service. That, along with steady incremental increases in scores, helps keep management and customers on board," says Terry Fitzgerald, manager, resale marketing, Texaco.

Sales Program Analyst Corey Carver of the Virginia Lottery says it often works to give management ownership in the idea. "When we do a concept, I send out bullet points for feedback and give them an opportunity to add or build in elements."

Another key: tangible incentives for the Lottery retailers and their employees. "Every time a clerk at a Lottery retailer won for performing well in a mystery shop," Carver says, "the store would win too." And there were even incentives for participating. If a given store agreed to let clerks participate - and carry some additional POS - the Lottery would raise the commission it pays the store by a full percentage point. Then if a clerk in that store won, the Lottery would pay an additional 2.5 percentage points.

Finally, management needs to know how the process is going to play on the front line. "It’s kind of a mutual thing," says Goldsmith. "When we show the front line what’s in it for them, often management gets that much more behind the whole process, because we’ve alleviated their concerns about morale."

Building buy-in on the front line

While the threat of being mystery shopped can rattle employees, with today’s approaches, not only do employees have nothing to fear from being shopped - they might even look forward to it.

For the Virginia Lottery, Maritz developed a program in which Virtual Customers visited convenience stores and other lottery outlets after the store employees had completed awareness training about the Lottery’s new game, called The Big Game.

When a front-line employee mentioned The Big Game, the Virtual Customer would reveal his or her true identity and award the employee a certificate good for $25, and if the employee answered a question about the game correctly, he or she got another $25. If the clerk didn’t mention the game, the Virtual Customer would still come clean and say that there would be other shops and that the employee could still win a certificate just by mentioning the new game.

What’s more, every employee who got shopped got an entry in a $1,000 sweepstakes drawing the Lottery would hold at the end of the program. "It was our way of making sure there were no losers," says Carver.

"Not only was it an opportunity to check how well the training had been received," Goldsmith says, "it also reinforced the message on the spot - an extra dose, if you will - and made employees actually eager for their next shop."

By adding a short-term incentive, the program was able to generate some significant long-term results, exceeding projections by 47 percent.

Likewise, Texaco uses the program to reward its retailers, wholesalers and wholesalers/retailers as well, and many of those customers rely on mystery shopping scores to reward individual units.

Sharing long-term results builds the team

Another way to get employee buy-in is to share results of the program over time - how service scores are up, how sales have increased, or anything else that’s relevant. It makes them feel part of the team and lets them know that the company’s objectives are achievable - and shows them their role in the big picture, as if to say, "When you, the employee, do X, and do it well, the company gets Y, which in turn generates both short-term and long-term rewards for you."

As the program progresses through a few cycles of shop, train, shop, train, the company will start to show some tangible business results - more sales, better customer satisfaction and the like. Those results will speak for themselves with management.

The Virginia Lottery, for instance, built three waves of shopping into its initial program. In the first wave, 18 percent of the retailers shopped mentioned The Big Game and correctly answered a question about it. In the second, the number rose to 23 percent; in the third wave, fully a third of the retailers mentioned the game and answered the question.

But to get to the point that a program can progress through several cycles, the initial shop reports have to be credible. Often, there’s a tendency to discount the results of a mystery shop - "Our people don’t do that!" And when people don’t believe the data, they aren’t going to make the changes it recommends.

So how do you build credibility into the program? "A key component is maintaining a force of competent shoppers across the country. At Maritz, we train and then certify every Virtual Customer we send out with three successively more challenging levels of training," Goldsmith says.

Those levels reflect a three-step process: In the first step, Virtual Customers complete a process that demonstrates their ability to do the shop. In the second, shoppers get job-specific, ongoing training that builds their expertise further. Shoppers get third-level status when they demonstrate special expertise with a specific industry or client company.

Another facet of training shoppers is SQEsurveys that help assess how well-prepared shoppers feel as they go out into the field. Over time, these surveys show that the better the preparation, the more accurate the resulting shops.

Experience has shown that this process ensures consistent reporting from shopper to shopper and can give shoppers a deeper understanding of client companies’ business concerns.

Beyond certifying shoppers, another key to building credibility is building enough shops - and shoppers - into the program. That way, the results show trends over time and throughout the target area rather than just specific instances of service levels, making the data quantitative as well as qualitative.

Texaco, for example, sends out information packets to over 700 shoppers every evaluation period, and they each do multiple shops. So when the report comes back that the restrooms were clean a certain percentage of the time, or the windshield-washing equipment was available another percentage of the time, there’s more than enough data to let everyone know that the results are accurate.

The Virginia Lottery program did over 3,000 shops a week during the program, data from which was gathered and verified quickly, to support the report’s recommendations.

How much positive spin is enough?

Even today it’s still possible to find pockets of resistance to the idea of mystery shopping. Experience shows that the more positive spin put on a program, the better it will work.

But is there a law of diminishing returns? Corey Carver hasn’t found one yet. As the Virginia Lottery ran a second and then a third Virtual Customer program, it kept adding improvements. First, it gave clerks the chance to earn the whole $50 in one step, instead of the two steps (mentioning the game and then answering a question about it) of the first program. Then it made it possible for Virtual Customers to give $50 in cash or travelers’ checks, so that winning clerks had the prize in hand instead of having to fill out a form and wait for processing. And they got more retailers on board by sharing the results they were getting from - and the commissions they were paying to - participating retailers.

The results speak for themselves. By the end of the third program, of the clerks helping mystery shoppers who had come in to buy lottery products, 35 percent won the $50 prize, and of the clerks helping mystery shoppers who had come in to buy non-lottery items, nearly 23 percent were winners.

What’s more, a survey of both winning and non-winning clerks found that 94 percent said they liked the program or liked it a lot; 93.4 percent said the shopper they met was either pleasant or very pleasant. So even though nearly two-thirds of the clerks didn’t win money, they still felt good about the program.

Of course, it’s nice that employees and management feel good about a program while it’s going on. But the real payoff of a well-supported mystery shopping program comes on the bottom line, as employees apply what they’ve learned in training and - documented in mystery shopping and properly rewarded - they continue to improve, lifting sales and profits in the process.

Because after all, there’s only one reason to do any kind of research, mystery shopping included: to show long-term, tangible results that grow the company.