It’s simple: Give consumers what they really want– a feeling of being more important than the almighty dollar.

If you’ve ever carted a pocket full of coupons to the grocery store and thought: “Why doesn’t the store just lower its prices and forget about coupons?” you know what we mean. Imagine the popularity of the store that decided to cut all coupons and simply lower prices instead. When customers feel important, loyalty builds. And it begins with a gesture that says profits are not the only important thing.

Mystery shopping is an invaluable tool in determining what customers really want. When a qualified mystery shopper enters your store, he or she accurately assesses store aspects that may be turning off—or turning on—your average customer. Their keen observations can tell you more than the bare basics. Look at the top retailers: Best Buy, Starbucks, Trader Joe’s…what do they have that many stores do not? They all use mystery shopping. They work hard to find out what their customers want and, along with the products and pricing their buying audience expects, they offer an uncommon level of service to match. The customer is happy and reasons, “Why shop anywhere else?” This is the secret to their success.

A solid customer base built on loyalty is vital. Businesses can even charge more, if they are willing to give more. Listening to the customer, providing a hassle free return policy, speedy service, and a simple thing called courtesy wins the battle. And mystery shopping points the way to the policies and procedures that create top retailers.

There are many factors that work together to make a mystery shopping program successful. However, no matter how much support your program receives from management, it will not be sustainable, consistent and successful without the full participation of your frontline staff.

Mystery shopping has taken a bad rap throughout the years. While savvy management may recognize its value, store associates are likely to consider mystery shopping as a way for management to spy on their daily activities, to find fault and criticize. This is due partly to the fact that mystery shopping programs have often been incorrectly implemented and the data from those programs has been incorrectly used.

Mystery shopping programs are not implemented merely to point the finger, but to look for excellence and reward that behavior. When used properly, mystery shopping is positive reinforcement at its best, and there is nothing like positive reinforcement to boost morale and create a happy workforce that gets the job done in the spirit of teamwork.

Of course, your mystery shopping program may uncover weak areas of your operation. This is to be expected. But any weak areas uncovered are simply opportunities to correct the problems and further strengthen your brand, your frontline staff, and your customer base.

Let’s look at several ways you can create interest in your mystery shopping program and keep your staff excited about participating to their best abilities:

First, and possibly most important, is providing individual and team motivation through recognition of excellence. How? Here’s a few ways:

• Instant (non-monetary) rewards by shopper to employee
• Shopper meets with store manager who then rewards employee
• Associate of the month, quarter, etc., (including picture in internal newspaper or similar recognition)
• Team of the month, district, region etc.
• Post survey in store to reinforce importance
• Post “blown up” shop results in store
• Reward top performance
• Reward most improved performance, store team, district, region
• Contests based upon performance i.e. suggestion selling

Next, you might want to try changing your research methods. For example:

• Change your survey questions…ask new questions, change the words, change the order of the questions
• Focus on a limited number of behaviors that are reinforced
• Set up program so managers and associates can succeed
• Give associates chance to perform using scenario-driven Mystery Shop
• Constantly analyze data and provide continuous feedback

Another area where you can make changes that will create excitement for the program and sustain interest in participating fully is through your Program Management objectives. Consider these possibilities:

• Define clear objectives
• Keep it simple
• Hire a vendor that can be a partner
• Obtain buy-in from front line
• Provide adequate internal administration
• Plan for change

And finally, the way you deliver the data compiled from your mystery shopping program can be instrumental in the program’s success. Your deliverables should be provided to store managers on a timely and consistent basis, so that managers can become accustomed to using the data to improve behaviors over time. In this way, managers will feel ‘in control’ of the store environment and can pass that confidence on to frontline staff. Once the staff begins to see the improvements to the store and the positive effect on customers, and feels the pride of individual recognition, your mystery shopping program will have become a true success: a program that created enough interest to get everyone excited, and now sustains that interest based on its own success.

Why is this important? Research shows that 97% of customers who have had a bad customer service experience do not complain vocally. No, they voice their opinion in a way that has much more dramatic impact: they simply don’t come back.

One of our clients, New York and Company (with a successful chain of 470 women’s apparel stores), has said their definition of great service is that the central office never receives a customer complaint. Does this sound like they are ignoring potential problems? They’re not. In reality, they do believe there will be issues. However, they have chosen to face those issues proactively. They are building the kind of PROACTIVE organization I talk about by empowering the store manager to identify and react to issues at the individual store level before or as the incident occurs…..pretty amazing. Of course, this billion-dollar organization realizes this commitment to a proactive attitude will take time to implement. That is why they have been consistently applying proactive principles for over 3 years. They are not yet where they want to be, but they have shown DOUBLE digit improvements in their service metrics. And while they may enjoy this growth and improvement so much that they may never be satisfied with the status quo, they are realistic in understanding that change wouldn’t happen overnight, or for that matter in a quarter or even a year.

How can you know if your policies are turning customers away? One way top retailers find out is through mystery shopping and customer surveys. Professional mystery shoppers pose as ordinary customers, testing out policies, staff, the store environment and your merchandise. They objectively report their observations, which retailers use to amend employee behaviors, environmental or product issues, and policies. Customer surveys are also very useful, offering a subjective look at what your customers really think.

David Rich, President of ICC Decision Services, offers his perspective. “We provide clients with one source for all their measurement tools. We design and coordinate each piece to complement the overall program goals. There is no ‘finger pointing’ – the program responsibility rests with us. And our team of market research professionals and industry experts work closely to optimize the effectiveness of your unique Customer Experience Management (CEM) program. Specifically, our mystery shopping programs drive frontline staff performance improvement, and increased revenue. We recruit, test, certify and closely monitor our shoppers. Fully customized and integrated with in-person, Web site, call center and telephone-based components, our mystery shopping programs include dynamic and static 24/7 graphic reporting powered by our proprietary state-of-the-art Web-based technology. Our programs leave no doubt as to what your customers really think of your store and your products.”

There are 4 Myths in Mystery Shopping:

#1 Scores are ALWAYS Going Up

When a mystery shopping program is introduced, scores do tend to shoot up rapidly. However, over time, they tend to flatten out. Upper management may then assume the program is no longer working properly. The opposite is actually the truth, and here’s why. Looking back and recognizing the progress that has been made is more important than looking forward. Understanding that mystery shopping serves as a guideline for your store associates to understand and to reinforce the behaviors they should be using every day is essential. When a store no longer emphasizes these behaviors, positive reinforcement for the new behaviors ceases. Associates usually return to previous behaviors, since this is human nature.

We’ve had cases where the mystery shopping program was stopped and we went back one, two, or three months later to measure scores, only to find they had gone down. It is important to remember that the program emphasizes behaviors congruent with what is important to the business. Just because the numbers aren’t going up as dramatically as in the beginning of the program, does not mean the program is failing.

Rather than pointing the finger at the program, this is the perfect time to freshen up the surveys and focus on other areas that drive revenue and the brand.

#2 Shops are Perfect

We wish they were! With any market tool including mystery shopping, there’s always some degree of error. Even the Gallup polls state in the fine print that the results of their surveys are + or – 5%. As a mystery shopping company, we shoot for less than a 1% error margin, so essentially less than 1% of the shops we perform are challenged. If those numbers rise to 2 -3%, the program will meet with credibility issues from the client.

Perhaps the problem is not the question itself, but that the question is not being asked correctly. Perhaps the shoppers don’t understand the question, or the stores don’t understand the expected behaviors.

Shops will never be perfect. There’s always a margin of error, but what is important is to focus on the potential for improvement.

#3 All Employees Love Getting Mystery Shopped

The ones getting good scores sure do! But there is a perception that mystery shoppers are there to find all of the hidden flaws, and this is far from the truth. The best mystery shopping programs find and reward the good behaviors that lead to positive outcomes for the client.

Still, America seems overly focused on the negative. A 2005 Department of Labor survey revealed that only 40% of American workers say they were recognized during one year of working for their employer, and only once! That means fully 60% of American employees work all year and never receive even one commendation from their employer. A good mystery shopping program can help to uncover weak areas that need improvement, but the real purpose is to find what’s right and build on that.

We firmly believe positive recognition breeds change. Our mystery shopping program finds associates doing something right and suggests ways to reward them for their positive behaviors. And this is a win-win for the client too. As other associates see the effects of recognition, they’ll want to model the behaviors that lead to accolades, and the client is rewarded with stores across their entire network that perform brilliantly.

#4 The “Ronco Rotisserie” Effect: ….The program runs itself

Did you ever see the commercial for this roasting oven with the tag line, “Set it and forget it!”? Unfortunately, mystery shopping programs are not like that product. You can’t put your program on autopilot and expect it to run itself, and then expect a great outcome. TLC is required from both the provider and the end user. It’s important to understand up front that mystery shopping is as much about proactive activity as it is about collecting data. For mystery shopping to be successful, it takes teamwork, cooperation, and a willingness to see reality as well as potential for improvement. The best mystery shopping programs are living and breathing, changing and maturing as the stores change and grow.

Over the past few years, mystery shopping has gotten somewhat of a ‘bad rap.” When used correctly, mystery shopping is an amazing tool that can effect real, measurable change. Unfortunately, too many retailers have stopped short, simply accepting the collected data without going the extra mile to implement the changes the data clearly tells them they need. The data is meaningless without action.

Can you imagine a sports team without a coach, all the team members standing on the field waiting to take direction from the fans in the stands? Of course, the fans are all yelling at once, and they’re all yelling something different. The team is just standing there, staring at a confusing game plan, waiting for someone else to make the first move. But wait! Here comes the coach, running on to the field! The players perk up, and everyone gets into a fast huddle. A few seconds later, they’re high-five-ing each other and now WE’VE GOT A REAL GAME!

Your fans are your customers. Your team is your staff. And you, the corporate manager, are the coach. Your customers are asking your staff for many different things. Your staff may be confused and may not be sure which ‘game plan’ they’re following. As the coach, it’s your job to get out on ‘the field’ and motivate you staff to help your customers so they’ll BUY. But doing that without a game plan is useless. Mystery shopping is the perfect tool for creating the game plan that will build and maintain a winning team. When properly implemented, there’s simply nothing else like it.

It’s a scary thought, isn’t it? But the truth is, every single interaction your customers have, from the moment they enter your store to the second they either purchase something or walk out empty-handed, impacts your conversion rate. And nothing makes a stronger impact on your conversion rate than the selling behaviors of your frontline staff.

What really is your “conversion rate?” Simply put, conversion is all about turning shoppers into buyers. Isn’t that what you’re in business for? So doesn’t it make sense that you would want to do everything you can to improve your conversion rate? Of course it does.

A recent survey by Deloitte & Touche USA LLP revealed that, out of 4000 customers who walked out of a store without buying, the top reasons for doing so were:

-The item or size they were looking for was out of stock (64%)
-The register line was too long (57%)
-A sales associate was not easily available (52%)
-A sales associate could not answer the question they asked (32%)

So then, what is the one thing you can do to improve your conversion rate? The answer is mystery shopping. Mystery shopping does not measure conversion rates. But it does measure the selling behaviors of your frontline staff, including product knowledge, suggestive selling, upselling, and overall positive or negative customer interaction- all the individual nuances that affect whether or not that customer will buy. Once you know your current baseline conversion rate, you can use mystery shopping intelligently to benchmark and improve individual staff performance. An 18% conversion rate is fairly standard for the industry. Increasing that rate by just a few points can make a dramatic difference in yout top line revenue. A 2% conversion rate can generate a sales gain of 10%! And it’s not difficult to achieve with some simple but important changes.

The estimated total number of mystery shops conducted in 2004 was 8.1 million, with an estimated median growth in the number of shops per company of 12.2%. Further the five largest segments, based on percentage of total market size, were:

-Restaurant – 21.5 % (Fast Food – 14%; Casual/Fine Dining – 7.5%)
-Retail – 16.8%
-Banking/Financial – 14.2%
-Gas Station/Convenience Store – 11.8%
-Grocery – 9.1%

The problem is that the viewpoint is incomplete, and the company (end-user) soon concludes the mystery shopping program “isn’t working.” It’s like taking a picture of a group of people with their backs to you, and then when the film is developed and you can’t see their faces, blaming Kodak.

The best organizatons offer a variety of measurement strategies to form a complete picture of what your customers are currently experiencing as they shop in your store. In other words do not just do a loss prevention mystery shop thinking that it is the panacea to all your problems. Sometimes there may be a need to have several mystery shopping programs targeting different areas of the operation.

So choose your provider wisely. Make sure they understand your needs and are willing to customize their programs to your short and long term goals. Don’t pick one component of an integrated program and focus on it to the exclusion of all others. If so, your data will not show the true picture, your results will be skewed and any improvements based on that data will not bring the hope-for changes. Instead, aim for a holistic approach to the customer experience that gathers data from multiple metrics that address all aspects of the typical customer’s visit, from frontline staff to clean restrooms, for a complete overview of how your customer might perceive your brand.

Increase Sales By Improving the Customer Experience

Sales strategies and selling themes developed at the corporate level are often not executed at the store level. Most chain executives are so busy and immersed in their jobs that they fail to objectively audit the real customer experience delivered at the store. Sometimes headquarters personnel do not have enough time to conduct store visits and, if they do, it is rare that they actually experience a visit the same way customers do. It is astounding how little most retailers spend on measuring and managing how customers really feel while shopping in their stores.

How Does It Feel To Be Your Customer?
Customer satisfaction surveys provide an accurate view of the customer’s perspective. Satisfaction surveys are conducted by interviewing a sample of your customers to determine their perceptions of your stores and sales associates. Rather than compliance (mystery shopping’s realm) customer satisfaction identifies perceptions – how your customer feels.

The result of a properly conducted and implemented customer satisfaction program is a store-level action plan defining the key drivers of your business – what most needs to be improved to increase your sales.

And that’s how you define the true customer experience.