It has been mentioned before – that stigma that the mystery shopping industry faces that the goal is to catch employees up to no good. In most cases, this is not the real goal. Instead, it is to identify where staff may benefit from further training to improve customer service. There may be one exception to this rule, however, and that’s mystery shopping to ensure compliance in alcohol and cigarette distribution.

What Makes Alcohol/Cigarette Compliance Different?

There are certain guidelines that should be followed when providing any type of customer service for the sake of client satisfaction. However, there are also a number of reasons why that isn’t the top priority in alcohol/cigarette compliance:

1. It is illegal to sell liquor or tobacco to underage individuals. Businesses can immediately lose their licenses and their livelihood if caught breaking the law, and there can be hefty fines. The penalties vary by state.
2. It doesn’t matter how friendly or helpful someone is when illegally selling alcohol or tobacco to minors.
3. There is really no “training” that can be provided to someone who is caught distributing alcohol or cigarettes to someone that is underage. It’s not black and white like delivering different levels of customer service – they simply need to check identification for those that look young.

Most mystery shopping companies will not send underage individuals into stores to assess compliance as this would be committing an infraction. However, younger looking individuals of legal age can be used to determine if in fact employees are refusing to sell to anyone with a young appearance if they haven’t checked their ID first.

What do you think? Would you agree that alcohol/cigarette compliance is the one area that the common mystery shopping stigma should ring true?

Customers visiting retail and restaurant establishments care primarily about walking out with what they came for. In the case of retail, it is whatever consumer good they were seeking. In the case of restaurant, it is a good meal and a full stomach. If they get their product, they aren’t as worried about what happened on the journey to it.

Unless of course, they had a really bad experience. Unhappy people tend to be the loudest. It is those unhappy people who had their feathers ruffled that will fill out the customer satisfaction surveys provided to them (often on their receipt.) The people that felt that their overall experience was “as expected,” — whether good or bad — are less likely to share their feedback.

This, of course, is unhelpful to business owners. Customers may feel that their experience was status quo, but that does not mean that they don’t have valuable information to share. There is always room for observation and improvement.

So what needs to be done to get the much-needed feedback?

There needs to be an incentive. After all, if the customer is going to help out a business, they need to feel as though there’s something in it for them. A couple of dollars off, the opportunity to have two-for-one appetizers, bonus points added to a store rewards card; these are all things that can encourage participation.

There are ways for businesses to get something out of these incentives too. Businesses can control who, what, when, where, and how the incentive can be used. This can allow them to drive in traffic during slow periods or sell products that are not meeting sales goals. It ends up being a win/win for all involved!

A mystery shopping company can also help facilitate the survey process and/or work with customers to learn what incentives and programs may appeal to them.

Sometimes, the way customers treat employees is just a reflection of their own bad days. Other times, they’re extreme reactions for justified reasons. For example, said Walmart cashier said that customers often get upset at her when a sale item doesn’t ring through on sale. When they mention it and act like the cashier should have caught the mistake, she thinks to herself “well how would I know that?”

In fairness, a retailer like Walmart sells thousands of products. But they do put out a weekly flyer with  all of their markdowns. It may be too much to ask that cashiers memorize the prices of all of their markdowns, but it’s clear that customers would appreciate them taking note. According to Yankelovich, Consumers in Control: Customer Service, consumers are generally displeased with customer service and this is just one example.

• 62% of consumers believe that most retail employees just don’t care about their needs. It could be interpreted that this example falls into this category. After all, an employee looking out for their customers may try and look out for pricing errors on sale items…so says the consumers.
• 66% of consumers believe companies are about sales, and don’t care what the customer thinks provided they’re seeing profits.

What these statistics indicate is that customers have no brand loyalty – if they don’t feel a business is looking out for them, they’ll go anywhere. When a competitive market often means offering competitive pricing, strong customer service is what can help a retailer stand apart and get the repeat business.

Companies that want to prove to their customers that they do care about customer service can consider mystery shopping as an option, because a program can identify the areas that need improvement.

If the corner market is a microcosm of a bigbox retail store, then a parking lot is a petrie dish where the DNA of all business can be examined unencumbered by the trappings of normal corporate life.

In the film, The Parking Lot Movie, directed by Meghan Eckman, we are given almost 90 minutes of raw examination of the nucleus of business; the exchange of goods or services for money.

The Parking Lot Movie follows a select group of parking lot attendants who work at The Corner Parking Lot in Charlottesvile, Virginia. The eccentric brotherhood of attendants consist of grad students, overeducated philosophers, surly artists, middle-age slackers and more.

Located near the University of Virginia and tucked in behind a number of bars, the assortment of overeducated attendants who work at The Corner Parking Lot have to deal with throngs of drunken frat boys, vandals, and SUV-driving jerks (I have a SUV but probably like you, am not a jerk) who either take off without paying or fight them over sums as low as $0.40.

What makes this lot different from other places of business is the customer is not always right. There are rules, expectations and boundaries. And they are clearly posted so the customer knows what they are. So do the employees.

And the employees are given the authority to enforce these boundaries. Without exception.

Pull into the lot? Pay. Park? Pay. If there is any doubt how much you owe, there is a giant sign with the rates posted in plain view. And the math is simple and universal.

If you’re thinking this is a chance for companies to “stick it to the customer like they have been sticking it to us” kind of approach, you would be wrong. This is about setting clear and communicable expectations. For your money, this is what we will do for you. The boundaries are set, your employees are told what they are and just as importantly, your customers are told, whether you use a big sign, a menu board, a verbal conversation or a legal contract.

And things change. Culture changes. Business changes. Laws change. Technology changes. Having service with boundaries doesn’t mean these boundaries are inflexible. But when they do change, it is because there was a business reason to make that change, not because of “feature creep” or slippage.

It’s important when you reframe your relationship by setting new boundaries, they are clearly and simply communicated to the customer and employees. For service with boundaries to work for your business — whether you are running a parking lot or a big box retail chain — everyone must know and accept the boundaries as the foundation of the business transaction.

SERVICE WITH BOUNDARIES is a service mark of ICC/Decision Services

One thing you’ll notice if you login to the Facebook page of any major retailer is that there is a lot of dissatisfaction being voiced. This is because unhappy people tend to be a little louder than those who are satisfied. In a way, this is a good thing.

An open outlet for consumers to share their feedback means it’s easier to see where changes to policies and procedures could be beneficial. It also helps determine exactly which questions to ask your customers so you know where to start drawing that level of service line in the sand.

People by nature want it all, but the reality is that they can’t always have it or something else may be affected. For example:

• Issues with return policies - people don’t like it when retailers have shorter return periods. But a return policy that’s longer than 30 days means that old stock will be cluttering shelves for an extended period of time. Those that shop at a high end clothing company, for example, may not appreciate this. So, the boundary drawn needs to lean one way or another because these two things aren’t compatible.
• Price vs Manufacturer - with more of a demand for locally manufactured items (again, a great example in clothing retail) this is a common debate among consumers. Manufacturing overseas is cheaper so when people want local production, the costs increase. Of course, consumers don’t like to see costs going up either. So, it often becomes an either/or situation here too.

The industry may have an attitude that the customer is always right, but there are some circumstances where catering too much to demands can make things go terribly wrong.

Implement the policy you feel best fits your brand values, set the boundaries and see how your customers respond.

Toys ‘R Us came out on top, followed by Target and then Walmart. We buy gifts for everyone at the holidays, but who do most of us focus on? Kids if we have them. Toys are a ubiquitous holiday purchase. So why in the world did our secret shoppers find the toy category rating so low on service and sales? What’s wrong with this picture and better yet, what’s the opportunity we see in this?

The opportunity is for any of these retailers to make a small effort toward improving in both these categories and standing head and shoulders above the competition, bringing them more business and ideally increased profits by improving the customer experience and helping people to buy more toys. Pointing out specials, helping people find promotions, being educated and in turn educating the retail customer is absolutely win-win.

In the office supply category, these three placed one, two and three respectively: Staples, Office Depot and Office Max. While all the stores scored well on welcoming and thanking customers, their friendliness didn’t translate into the aisles, making suggestions and increasing sales.

While our Mystery Shoppers rated them fairly high on service, they rated them low on making sales. Employees are friendly and helpful, but they don’t do well when it comes to suggesting what else customers might buy or pointing out items on sale or potential discounts.

A bit more emphasis on selling could go a long way toward a more profitable holiday season – exceeding expectations of what is expected to a better year over all. The customer experience is positive and we believe that means they’re open to hearing what the people who know most about the products think would make most sense for them to buy. It’s simple and it enhances the customer experience.

In the electronics category the top three stores are:  Game Stop, Radio Shack and Best Buy. Here’s the shocker – the number three retailer, Best Buy ranked 23.3 (out of 100) points in the suggestion category. Employees are helpful, they greet visitors to the store, they thank them when they leave and the wait to buy was minimal or none.

When it came to selling to our secret shoppers, it more or less didn’t happen. Electronics are hot. It’s a sector where people are spending money, yet our Best Buy Mystery Shopping indicates the retailer is missing major opportunities for increased revenue.

Most of the time, employees are NOT suggesting other purchases to customers. Encouraging purchases and selling to customers would benefit the electronics retailers and making more sales is an key opportunity to increase revenue in this busiest retail season.

Our mystery shoppers found the top five in the apparel category to be: Delia’s, Charlotte Russe, Coldwater Creek, Burberry’s and Victoria’s Secret. These five, in this order, met the most retail benchmarks in our study.

Let’s look a bit deeper than who ranked first, second and third and ask what opportunities the numbers reveal.

While Delia’s employees greeted and thanked customers nearly 100% of the time, the wait to pay was virtually non-existent and the fitting rooms were impeccable, they scored only 73.3 on suggestions. Suggestions to customers drive sales.

Selling is the missing part of the equation here. Making suggestions, in effect up-selling can be done graciously and easily – there’s no need to be in-your-face or pushy.

Suggesting a blouse that would make a stunning outfit when combined with the pants the customers is about to buy is really helpful and more often than not, the customer spends more when being helped.

Sales, when done well, is simply helping other people get what they want. Just a little more of that kind of sales can make a huge impact on a retailer’s bottom line and may be the biggest take away from our retail benchmark study.

In a first of its kind retail benchmark study, ICC/Decision Services visited over 50 retailers across the categories of apparel, department store, electronics, home improvement, toy, specialty and sporting goods to measure their readiness for the holiday season. From October 26 through November 18, 2010, ICC/Decision Services conducted 1621 nationwide store visits to assess sales helpfulness and employee service. The National Retail Federation (NRF) forecasts a 2010 holiday sales increase of 2.3 percent. But, argues David Rich, President & CEO of ICC/Decision Services, “retailers are still leaving millions on the table.”

In areas such as greeting and thanking customers, and cleanliness, for instance, the majority of retailers scored well, which indicates store associates are focusing on the customer experience. However, in other key areas such as explaining promotions, suggesting additional items, and determining customer needs, many retailers are underperforming. For instance, suggestive selling occurred only 43.7% of the time on average across all 1621 store visits. “Associates may be handling customers graciously,” says Rich, “but they are not converting that relationship into sales.”

The top performing retailer was Yankee Candle, which earned an overall score of 92.8 out of 100, achieving a selling score of 87.8 and a service score of 97.8. Lowest performing segments of the marketplace included sporting goods, department stores and toy departments. Retailers visited included: Aeropostale (ARO), Ann Taylor (ANN), Best Buy (BBY), Build-A-Bear (BBW), Dick’s Sporting Goods (DKS), Game Stop (GME), Gap (GPS), J. Crew (JCG), Kohl’s (KSS), Macy’s (M), Nordstrom (JWN), Office Depot (ODP), Sears (SHLD), TJ Maxx (TJX), Target (TGT), Toys “R” Us (TOY), and more.

For a summary of the “Retailer Behavioral Outlook for 2010 Holiday Season” or go to this link: http://www.iccds.com/benchmarks

About ICC/Decision Services:

ICC/Decision Services was founded in 1979 to design and execute Customer Experience Management programs. ICC/Decision Services offers a wide range of qualitative and quantitative business tools, including mystery shopping, store audits, customer feedback and employee satisfaction surveys. Clients include Coach, 7-11, L.L. Bean, CVS, Foot Locker, Walmart and others. The company is headquartered at 561 7th Avenue New York, NY 10018, U.S.A. Phone: (800) 444-1717. E-mail: info@iccds.com.

When done right, Mystery Shopping is a tremendous asset for retailers. Results can be used right away to improve the customer experience and to motivate employees, optimize resources and improve operations in every way. Sound big? It is. Mystery shopping is observational research at the business level and like any research, you have to know what data needs to be gathered and how to best interpret and use it. Without these metrics in place and properly carried out, the value is questionable. And like most things, something done poorly is usually worse than not doing it at all.

Mystery Shopping Gets Answers to the Questions You Need to be Asking

How do you measure what happens in your stores? How do you know which factors influence your customer’s experiences and perceptions and affect your sales? It’s impossible to know without objective ‘feet on the ground’. Experienced providers employ mystery shoppers who are carefully trained and who make observations that when analyzed will give you a view of your stores you just can’t get in any other way.

Can Mystery Shopping Really Improve Your Business?

When you work with a seasoned provider, here’s what it looks like start to finish: Together you pinpoint exactly what you need to learn from your program. Define your goals in measurable terms and know what determines a valid statistical sample – how many stores, how many employees, what metrics you need to put in place for your situation. Create the questions, get them asked and answered. Interpret the data and translate it into the actionable steps that lead to improvement. It’s important that the provider understand the needs of the company across departments so you can work together to create a plan that provides a useful company-wide perspective, minimizing redundancy and eliminating the waste that comes from repeated effort.

Mystery Shopping Works Nationally

When a national cinema wanted to measure the effectiveness of their training and improve customer satisfaction, they needed to know how employees were performing at locations around the country. They required accurate data and they wanted it quickly. They were looking for a provider who could partner with them to assist with every part of the process. They had failed before and they knew they needed someone to help them establish goals, create a program and help them analyze the mystery shop and put the data to use. Choosing the right provider resulted in a mystery shopping program that improved customer experience.

Mystery Shopping Works Regionally

A regional chocolate retailer was experiencing rapid growth. They had a mystery shopping program in place, but they were so busy managing growth that they had no time to analyze data or make use of it. Their solution was finding a provider that worked with them throughout the entire process. They had help not just establishing and implementing the program, but assistance where they needed it most: analyzing data and determining what actions to take. The process worked smoothly and they were able to make improvements that kept customer satisfaction high, keep pace with their growth and improve their business (instead of imploding it).

Don’t Suffer from Being Information Rich and Execution Poor

Experienced providers work with you to understand your needs and customize a mystery shop that addresses the issues and concerns you have right in that moment. You get information that is real and relevant. Your business is a dynamic entity and what was critical to your company yesterday may not be what needs to be measured tomorrow. A good mystery shop will naturally suggest new issues to audit and improve.

Asking the Right Questions is Critical

Interpreting and using the information generated by the mystery shop is where the rubber meets the road. Too often, even when great data is mined from a mystery shopping program, the retailer is left with information they don’t take action on. That’s why experienced providers keep working after the shops are completed. They show you how to interpret the data and they deliver reports you can understand. They work with you to determine exactly what actions you need to take to make the improvements suggested by the mystery shopping program.

Learn to Love it

Understand the true value of the most objective retail tool available, work with a quality provider to get it right and you’ll learn to love and benefit from the tool that everyone else loves to hate. You’ll have more satisfied customers and a stronger bottom line as a result.

Who would have thought you could patent slower, more expensive shipping? The patent covers many consumer options including the option to have products shipped in smaller boxes, have items packaged together and using a shipping company that has a deliberately smaller carbon footprint.

Some of these shipping options may take longer and/or cost more, but Amazon apparently sees a market niche it can fill. It might just be the answer for people who don’t like all that Styrofoam floating around. We’ll keep an eye on how these new options are implemented and how the public responds.

When customers opt-in to the “Summit Signals” program, they automatically receive SMS offers once they are within a 1.5 miles radius of a North Face location. Customers also receive other information relevant to their location that would be of potential interest such as hiking trails or outdoor recreation areas.

The technology is provided by the San Francisco-based Placecast, using their “Shop Alerts”. The North Face markets the service through email, in stores and on their website and is testing the strategy in 31 of its locations.

1. Conducting an RFP
In this case, the company turns over the job of choosing a provider to purchasing. Why not? They buy supplies, negotiate deals, handle vendors. But this is different. Purchasing does not have the necessary background and understanding of the mystery shopping process to take on this task. Your mystery shopping program, when done correctly, will literally touch every person in your organization AND your customers. This isn’t the same as purchasing pens in bulk or negotiating a maintenance contract. Most programs with high turnover rates are ones in which RFP’s are involved. Bottom line? Some things are just too important to leave to an RFP”¦your mystery shopping program is one of them.

2. Going with the lowest price
As the saying goes, “the cheapest option is the most expensive.” Check for hidden costs, upfront fees and changes to reports and management structure. Sometimes, the lowest cost alternative will end up costing more in money and headaches than you ever imagined.

3. Over Emphasis on Reporting Capabilities
Great reports are nice, but all of that pretty data means nothing if it is not “good data.” Do not be fooled by fancy reporting. What really counts is data integrity and a provider that not only collects that data correctly, but can show you how to apply it to achieve the improvements you’re going for.

4. Being wowed by claims of hundreds of thousands of shoppers.
As is true in other areas of life, it is quality, not quantity that counts. Hundreds of thousands of shoppers can sound impressive, but it doesn’t speak to how those customers feel about your products and services and what kinds of interactions are taking place with your frontline staff.

Hot tip: Your mystery shopping provider should be able to cover all primary, secondary and tertiary areas with qualified shoppers. Additionally, they should have a process in place for tracking shopper performance, and should be able to tell you about each shopper’s talent for adhering to stated guidelines.

5. Not checking ALL references
Will your potential provider allow you to call other clients besides the ones they offer as references? If not, this is something serious to consider. What are they hiding?
When speaking with the provider’s clients, find out how long they’ve been with that provider. Big retail names may have an influence on you, but a long-standing, loyal client list is far more impressive. Any provider can pull it together long enough to build a short term client list.

As the electronics business gets more competitive with discount stores like Target and Walmart fighting specialized stores like Best Buy for a larger customer base, stores realize they need to do a lot more than just stock shelves with the products customers want–and need. In an effort to become more of a destination electronic store, Target announced new services for electronics shoppers.

Among the new offerings, Target is adding a free telephone technical support service for purchases, an electronics recycling program that offers store gift cards and more wireless phone choices.

“Electronics are getting more complicated and more of us are connected to the Internet and wireless,” Senior Vice President Mark Schindele said. “Guests want a seamless experience.”

Like Best Buy’s Geek Squad and Apple’s Genius Bar, Target’s new services hope to bring more traffic to the store. Time will tell whether consumers will buy what Target is selling.