Those perceptions turn into realities that you tell your friends and family. Or maybe you tweet and Yelp! about your experience. You exaggerate the facts. You’re human. It happens.

This past weekend there were thousands of airline passengers who experienced this scenario with Hurricane Irene. And many recounted their perceived experience as fact to anyone who would listen.

Except one.

Jordy Leiser, the chief executive and co-founder of StellaService, a company that researches and ranks customer service, asked himself; “what is really happening?” and set about to find out. He devised a survey to evaluate performance that methodically queried the airlines over multiple media between 12 a.m. and 6:30 p.m. on Friday. The results were interesting, if not surprising.

The most significant thing I gleaned from the survey is that we are moving beyond perceptions, surveys and reviews from customers and into a realm of fact-based feedback. Twitterstorms and paid Yelp! reviews have made it easy for large companies to dismiss the relevance to these opinion-based reviews. But fact-based information, collected dispassionately, methodically and scientifically is harder to ignore and not easily explained away with a PR campaign or free beads.

The large companies are no longer in charge of the data and they are feeling the frustration as evidenced by the email sent by American Airlines spokesman Patrick Martelle in response. Yet many continue to fight a battle of facts with perceptions.

This is where mystery shopping can step in. Obviously customer perception remains something you want to manage, but when you change an operational procedure or a response as a result of knowing how customers factually experienced your product or service, the need for managing negative perceptions drops precipitously.

Manage what really happens — not anecdotes — and you also manage perceptions.

1. What’s Their Track Record?

The increasing recognition that mystery shopping programs can be used as an indispensable tool for increasing revenue and improving service has recently generated a proliferation of fly-by-night providers. And, while many of these providers assuredly offer quality services, researching the history of your potential mystery shopping provider is vital.
To get a read on any potential provider’s track record, here’s what you should consider asking:
Where has the provider been doing business, and for how long? Look for a provider with proof of a six month track record, minimum (obviously, the longer the better!).
Can you contact satisfied customers for a recommendation? In the customer service world where the “customer is king,” be suspicious of any provider who can’t offer such a list.
What qualitative and quantitative data gathering and analysis measures does the provider use? If they can’t clearly outline such measures in the abstract, can they really do it with your actual data?
What they will offer you and how much it will cost? More importantly, how do their rates and services compare with at least one other provider?

2. Who do they serve?

Just like your business, mystery shopping providers offer specific services to specific industries. Some of the most commonly serviced include retail, manufacturing, hospitality, and entertainment, but industries that deal with property management, banking, travel, and even medical fields also employ the services of mystery shoppers.
The following questions can help you assess a provider’s knowledge and expertise within your particular field:
Can they provide examples of previous clients in your industry?
Can they provide specific information as to how the mystery shopping programs they’ve provided for others in your industry were conducted, and what outcomes were recognized?
Note: Don’t be afraid to ask questions about the impact of their programs upon profits and revenues, as well as how the data was constructively analyzed for the client.

3. How do they work?

Your prospective provider might provide mystery shopping programs, but that doesn’t mean the way they conduct their business should be a mystery, too. It’s essential that your potential provider explains in detail exactly:
a) How they plan to conduct their research;
b) How they will compile and analyze the data;
c) How they will present this data to you in a highly useable and easily implemented way.
You may also want to ask for the following:
A layman’s explanation of the provider’s methodology, including their qualitative and quantitative approaches. (Check to see if their methodology extends beyond the store by finding out whether or not they offer strategic assessments, retail study tours, presentations, and workshops to help inform and educate your workforce).
The “So What” question of their methodology: “So what does this mean for my business and my bottom line?”
The provider’s ability to custom-design a mystery shopping solution for your specific needs.
Because effective mystery shopping programs don’t end with the mystery shopper, make sure the provider offers a full suite of customer service strategies in addition to mystery shopping, including:
Onsite site audits;
Customer Surveys
Exit interviews;
Social Media & E-Com.

4. Who are their shoppers?

Knowing how shoppers are chosen, trained, and equipped to do what they do is important if you want to feel confident in the data collected; after all, the old adage “garbage in, garbage out,” is usually true. And while you obviously don’t have to get out there and introduce yourself to the shoppers themselves, it is a good idea to have the provider explain the qualifications of their workforce. Remember, their shoppers could soon be shopping in your stores and you want to make sure they pass the muster.
To determine the qualifications of their shoppers, ask about the following:
Qualifications (e.g., What requirements must shoppers fulfill? Do shoppers have to hold a High School diploma or is there a minimum age requirement?);
Experience (e.g., What is the average number of years in the industry of their overall workforce);
Training (e.g., Are shoppers trained specifically by the provider? Are there ongoing educational opportunities offered?)
Rules of Ethics and Conduct (e.g., How is shopper conduct monitored? What measures are in place to make sure shoppers are not submitting biased data?).

5. What about their own customer service?

A good mystery shopping program can often be a long-term investment—one that can pay dividends—so, beyond the fancy letterhead and slick sales presentations, you need to make sure the provider has its own customer service standards. While it’s hard to define, providers that offer that “something extra” are usually the ones committed to working for the best outcome of your business in both the short- and the long-term.
Here are a few ways to spot the “something extra” – a sign you’ve found the perfect provider for your needs.
The provider doesn’t simply collect data; they show you how to benefit from it.
The provider doesn’t just amass statistics; they empower you to use the data by providing the proper tools to help you make sense of your business.
The provider offers complete service programs that show a direct impact on increasing sales, boosting average sale per transaction, yielding a higher number of units per transaction, motivating your workforce, and monitoring employee adherence to corporate policy.
With so many providers on the market today offering programs that all sound alike, finding the one that offers you true value through an emphasis on excellence, passion, and quality is essential to making the most of your mystery shopping program.

Maximization vs. Optimization is based on a very sound mystery shopping formula:

When budgets are limited, it is generally better to shop fewer stores on a more frequent basis than all stores less frequently. You may, for example, decide it is more important to shop your top 30 best-performing stores. Or you may want to establish different frequencies, or rotate your stores and districts. There are an infinite variety of ways to create the program that works best for you, but the bottom line is to remember that there are enough variations possible to allow you to get the most out of your program without sacrificing the crucial data you need to meet your program goals. When it comes down to whether you should conduct your program quarterly, monthly, weekly or daily, there are other factors to consider:

Quarterly
Great for compiling a snapshot of data but, with so much time elapsed in between shops, it is very difficult to use data to effectively make consistent changes or drive behaviors. Acceptable for monitoring and data collection.

Monthly
Monthly programs are the most popular and budget-friendly choice. A monthly program means a more consistent view of store/team performance, more dependable behavior reinforcement, and more effective identification of strengths and opportunities over the long term.

Weekly or Biweekly
For those wishing to implement a variable program based upon stores types (i.e. such as with high and low volume stores, loss prevention, etc.), a weekly or biweekly program is very effective in driving behavioral changes through constant reinforcement.

Daily
Unless your main goal is loss prevention, a daily program is most likely overkill. In fact, if your main goal really is loss prevention, you are probably more in need of hidden cameras than mystery shopping. Daily programs produce a lot of data that will prove to be useless, since the Manager will not have the time or opportunity to understand and use the data that is produced on a daily basis.

The second most popular question I am asked (especially by naysayers of mystery shopping or those who get low scores) is something along the lines of…Hey this is only one shop a month. How can this really demonstrate what is happening in my store?

Sadly, statistically it cannot. And therein lies the mystery shopping conundrum. Stores with a smaller budget perform fewer shops. Fewer shops lead to less credible data. Less credible data leads to less opportunity to change behaviors and delayed gratification in meeting overall program goals. It also translates into fewer opportunities for training for the entire store. This is exactly why we advocate the Maximization vs. Optimization formula we talked about earlier. Simply put, you are getting the biggest bang for your buck without compromising.

The truth is, anything can happen anytime. But if it happened once, it will happen again. When it does happen again, that is when it is time to become concerned. Can you imagine a sports game being played where no one announces the score? Sounds ridiculous? Well just imagine for a moment, what that would be like……those basketball teams are running up and down the court, throwing baskets on both sides, but since no one is keeping score, no one is leading! Soon, the players begin tiring out. They start walking off the court and sitting down. After all, who cares about working hard if no one is winning? Then, one by one, the fans begin to get up and go home. If the team does not care, why should they?

Do you see the point? Just like in basketball, where the players play harder when they know the score, your frontline staff and store managers will be far more effective when they can see the results of their hard work. Regular, consistent data delivered as expected, in an easily digested format that can be used to direct and change staff behavior, is what wins the game.

Greg Stuart, former CEO of the Interactive Advertising Bureau, stated, Marketers generally distrust research and data. The same can be said for retail managers and owners. Data is gathered and then sometimes skewed to suit the manager’s notion of what is really going on in the store. One of the reasons for distrust stems from the belief that consumers often do not tell the truth, or at least contradict themselves, in surveys.

The Advertising Research Federation, offers this explanation. There is a general belief that over 50 percent of the research done at companies is wasted. Often all we do is present numbers. We don’t present insights. Customer surveys measure what customers really think and feel about a company. Customer feedback determines if customer needs are being met. All-inclusive customer service assessments that include mystery shopping and customer surveys should offer data that largely reflects and supports the findings of the other. If a manager consistently dispute or ignores the findings, reevaluate your specific program, examining the data to ensure the criterion for measurement is appropriately capturing the results you desire, then use the truths of that data to meet customer expectations.

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.

Business people always look for ways to gain an advantage for their company. It’s often the small (and sometime not so obvious) edge that makes all the difference in results. In the current economy, the typical apparel retail store has a conversion rate of 18%. That means 100 people walk through the doors and 82 walk out without having made a purchase. Just a small uptick in percentage can have a huge financial impact. An increase of just 5% – from 18% to 23% could result in $8,176,000 in sales per 100 stores. 5% = over $8 million dollars.

Could the Customers Who DON’T Buy Be the Key to Success?

We’re used to asking for feedback from shoppers. Most retailers focus their data gathering on customers who’ve made a purchase. Surveys on the sales receipt, in the shopping bag or on your website and email follow up are commonly recognized and effective tools. It’s important to know what your customers think and get a critical understanding of their observations and experience of your stores, your merchandise and employees. What if you could find out why the ones who didn’t buy left your store empty-handed? Asking the right questions of those shoppers provides insight you can’t get any other way. Understanding their perceptions of your stores and learning what they see, think and feel gives you the edge you can use to improve your stores, your customer satisfaction and your bottom line by turning shoppers into buyers.

Improvement Can be Quick

Sales increase in direct proportion to customer satisfaction. Much of the measure of customer satisfaction is wrapped up in customer perception. How shoppers feel in your stores. How they feel about your sales associates, about your stores cleanliness and your displays. Knowing what people experience, think and perceive – particularly those who don’t buy gives you a fresh perspective on the key drivers of an improved experience. Often the answers are simple and the improvements quick and easy. But if you’re not asking the right questions of the right shoppers, you’ll never gather the information that will give you the edge.

How Customer Intercepts Work Best

Start by asking carefully designed questions of the shoppers who leave your stores without buying. What if you learned for example, that a large percentage of your customers in a certain region just weren’t finding what they were looking for? Perhaps you’re an apparel retailer and you overlooked the fact that your customers wanted a greater selection of seasonal sweaters in the Northeast and brighter colors in the Southwest? Maybe you’re an electronics retailer who learns that your employees don’t have enough knowledge in various departments and without answers your customers lose confidence and don’t buy. Suppose you were to learn that customers’ ‘feelings’ caused them to leave you stores? They might tell you the displays are too crowded or the stores weren’t clean enough. Maybe you’ll learn that customers couldn’t find a salesperson to answer their questions and they didn’t feel properly cared for. Maybe they just couldn’t find what they wanted.

Asking The Right Questions Translates to Critical Improvement

When a national pharmacy chain needed to understand what was happening in the aisles of their stores they relied on shopper intercepts to find a solution. Specifically, their Market Research Manager wanted to know why so many shoppers came to the pain aisle, but didn’t make a purchase there. Intercepting customers in the aisles and asking the right questions resulted in the manager getting the data needed to improve that aisle; increase sales and to improve other aisles so their customers could more easily find and purchase exactly what they were looking for. The right answers from the right shoppers increased their bottom line. They just had to ask the questions.

Using the Data to Make Actionable Changes

It’s not an uncommon for retailers to gather data but be at a loss to understand and implement actions from it. An experienced provider makes all the difference. They’ll work with you to create the questions, determine what you need to get a workable, statistically valid sample. They’ll show you how to interpret the data gathered and translate it into the actions and improvements that convert more shoppers into buyers. It can be a big ‘aha moment’ when you realize that the best information can come from the people who aren’t buying. You’ve done the work to get them into your store. Finding out why they’re not buying by running a strong Shopper Intercept program can turn things around quickly and profitably.

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.

The In-Store Marketing Summit is the premier educational conference for agencies, CPGs, retailers and P-O-P producers looking to improve their retail marketing strategy.

David Rich is the President & CEO of ICC/Decision Services, a privately held company headquartered in New York City serving customers across North America. David has spent close to two decades in the retail and customer experience management and, as President and CEO of ICC, he develops creative solutions for some of the world’s leading retail brands in many of the largest retail vertical markets.

This story on CRM.com discusses the subtle, but very important differences achieved in giving the customer experience a high profile in your day-to-day operations. Here are a few of the major points:

It is true that the customer experience has a lot to do with sales and marketing, but to limit it to these silos is to miss the larger point. Everyone in your organization is a touch point to the consumer.

It’s also true that the customer experience reflects the emotions or feelings of your consumers. However, there are also tangible elements like contract clarity, financial options, web support, or even something as simple as the ease of transporting your product.

There are those who believe customer experience is a “tradeoff to profitability.” This “necessary evil” attitude is misleading. A healthier viewpoint is to see your operations as a means to solving your customers’ problems. The better you can do this, the more profitable you will be.

The truth is that there is a grain of truth in every attitude toward the customer experience. The only trouble is that many of these approaches are incomplete. Try thinking of the customers’ need in all phases of your operation.

The answer is simple. Mystery shopping is not a bad tool?it’s a tool that’s (all too often) used badly. There’s so much frustration out there resulting from poorly designed, badly maintained mystery shopping programs that the lousy reputation is no mystery at all. But to abandon mystery shopping because of a bad experience makes about as much sense as doing without a car because your last one happened to be a lemon.

How to make sure mystery shopping works for you

You spend a great deal of time and money designing customer service and product display protocols?elements that define your customer experience and provide crucial differentiation from your competition. A good mystery shopping program is the only way to get objective information about how well those carefully crafted strategies for service, display, and loss prevention are actually being implemented”¦and yet a bad mystery shopping program is almost sure to be a waste of time and money. How can you be sure you get a good one?

There’s no one answer to that question?just as there’s no one-size-fits-all mystery shopping program that can meet every company’s needs. However, the good news is that when mystery shopping programs are intelligently designed to meet a company’s specific needs, they are almost guaranteed to function beautifully. Working with an expert provider who can act as a true partner (not just a generic data-generating service) is the best way to ensure that you’ll get a customized program that’s right for you.

Here are a few questions you can ask yourself to help determine whether your mystery shopping program?and your provider?are working for you:

Do you know exactly what data you need? Your provider should be able to help you pinpoint precisely what you want to learn from your program, and then help you define those goals in measurable terms. In addition, they should be able to suggest ways to integrate the needs of your different departments into an overall plan that minimizes redundancy and creates a true company-wide perspective.

Is your mystery shopping audit routinely refreshed to reflect new concerns and new processes? A mystery shopping audit form shouldn’t be “frozen in time”. What needs to be monitored today will probably be substantially different from what needed to be observed yesterday. And, if a mystery shopping program is correctly indexed with other information tools (like a customer satisfaction program), insights from these tools ought to be suggesting new issues for your mystery shoppers to observe and objectively audit.

Are you correlating your data with other metrics? Mystery shopping programs provide an objective view on how your stores are working, while customer feedback provides a subjective view. Taken together, these metrics create a complete picture of the customer experience in your stores, and allow you to make concrete changes to meet or exceed your customers’ expectations. As a simple example, let’s say a customer survey indicates dissatisfaction with your stores’ restrooms. If your mystery shopping data indicates that the restrooms were clean and stocked with toilet paper at 100% of visits but that no paper towels were available at 50%, you can conclude that paper towel availability is an important part of your customers’ expectations. You can also give specific direction to your employees to fix the problem (i.e., “keep the restrooms well stocked with paper towels”) rather than providing more general direction (i.e., “maintain the restrooms better”) that might not get to the real problem.
Because correlating mystery shopping data with other metrics is so important, using a provider that can analyze and help implement a wide range of customer service evaluation metrics can provide a great advantage. When the same provider is designing and administrating, for example, your mystery shopping program and your customer exit interviews, both programs can be designed to mesh well and to be optimally useful in tandem.

Are you properly “mining” your shopping results for greatest insight? Getting good data is important, but even the best mystery shopping data is useless unless it’s put to practical use. A good mystery shopping provider should be able to show you ways to translate your findings into measurable improvements in your bottom line. After all, pinpointing problem areas is only helpful to the degree that it allows you instigate positive change. Remember that your standards for performance improvement can?and should?be high: if your front-line employees are following procedures correctly 90% of the time, that’s not good enough. Interactions with employees are a critical part of your brand, and hitting brand standards only 90% of the time isn’t acceptable. (Just to put things into perspective: imagine if your company logo were printed in the right colors only 90% of the time!)

The bottom line has to be your bottom line

Simply put, a mystery shopping program is only as good as the data it produces?and the data is only good to the degree that it helps you make improvements to your business that impact your bottom line. Unfortunately, too many mystery shopping programs fail to produce good, usable data, and frustration is the inevitable result. But it doesn’t have to be that way. Good mystery shopping programs do exist, and choosing an expert mystery shopping provider?one who can truly be your partner in planning and execution?is your best guarantee of getting one.

A report filed by DEI Worldwide called, “The Impact of Social Media on Purchasing Behavior tells us that 70% of consumers consult Social Media Websites when searching for information on a product or service. That is the number one source ranking ahead of Company Websites (68%). The reason for this is obvious. Because of the endless supply of communication outlets available, it is no longer acceptable to take a number, be batch processed, or be put on hold. Customers want a place to rant and rave right here, right now.

That sounds like bad news if you’ve been off the planet for the last year and a half. But companies shouldn’t panic. All they have to do is join the conversation. According to DEI, “Companies not engaging in social media as part on their on-line marketing strategy are missing an opportunity to reach consumers.” The report says that talking to a brand representative online sends a powerful and positive message. Sixty-seven percent said they are likely to pass information from brand representatives on to others.

Maybe it’s the tail wagging the dog, but Social Media outlets enable both the customer service challenge and the solution. It’s this simple: customers require direct, individual one-on-one attention or they are going somewhere else and will bring their friends with them. Being comfortable enough in your own skin to engage these consumers online, immediately closes the loop on an individual basis and provides invaluable word of mouth that your newfound friend will text, tweet or telephone with others.

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.

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%

Unfortunately, some IVR vendors have chosen to position IVR surveys as a replacement for mystery shopping. This is erroneous, since these approaches provide different types of data, one based on subjective recollection and the other based on objective observation.

Mystery shopping provides an objective service evaluation based on factual observations, using people who are trained to know what to look for when conducting evaluations. IVR, or for that matter, any form of customer satisfaction surveys, capture highly subjective feelings and emotions only. Facts may or may not play a part in the responses, skewing the final data.

The core difference between the two is that mystery shopping is a customer experience measure based on a predetermined set of assessment criteria. IVR surveys, however, are used either as customer satisfaction measures or as customer experience measures based on the customer’s recollection of subjective memory.

While IVR may be useful to a company seeking information on extremes of service (i.e., excellent versus poor), as extreme experiences often motivate customers to respond to IVR opportunities, the fact is that when seeking benchmarks from actual customer experiences, mystery shopping is better able to provide valid data.

The MSPA believes that a company should consider using both services if their budget allows, so that they have both objective, fact-based research as well as subjective, opinion-based research on which to make important, organization-changing decisions. Using both services provides a more complete picture of the customer experience. The MSPA does not advocate replacing either service with the other.

Less publicized than most aspects of a mystery shopper program, competitive audits (sending mystery shoppers to assess various aspects of a competing brand or store) provide an opportunity for you to observe, test and analyze the operations and performance of those competing for your market share. In this case, mystery shoppers offer you a consumer-based perspective through the mind of a trained market researcher. As with using a mystery shopper within your own operations, the resulting data can be used as a benchmark against your own brand experience. It can also reveal areas of quality, service or performance that fall short in comparison, providing yet more quantifiable data from which to generate additional training or redesign existing employee education.

Mystery shopping focuses on staff performance- how well the company executes its operations and customer service objectives based on the fact based observations of the mystery shopper. Since shoppers are given detailed guidelines in advance on what to look for, mystery shoppers typically visit the store 1 ““ 4 times each month and focus on quality control, training and incentives. Additionally, Mystery Shoppers are recruited based on demographic profiles that closely match those of a company’s real customers. Mystery Shoppers are paid to be very objective and detailed, reporting on specific visits or calls and observing 100% accurately the precise #’s of customers and employees in-store, service times down to the second, what was in or out of compliance during the visit.. Each evaluation is then used independently to make improvements to operations and training. It is not difficult to see how much valuable information can be gathered from the mystery shopper’s point of view of employee performance.

However, customers have a completely different vantage point- a thoroughly subjective one ““ and many see employee performances in a completely different light. This is where customer surveys, 50-150 per month on average, become very important, measuring what the customers really think and feel about the company, its services, its products and its marketing. Customer surveys are not based on fact; they’re based on individual opinion, but this opinion is as valuable as a mystery shopper’s report. Generally, Customers are sampled at random from a qualified population to extrapolate results that represent a significantly larger population. Encouraged to freely express their highly subjective opinions, individual surveys are not predictive of every customer’s experience unless sufficient samples are taken and results analyzed in aggregate. Although customers lack the pre-arranged guidelines and objective focus of the mystery shopper, customers aren’t dummies. They’re not afraid to express their opinions on whether there were enough employees available to serve customers, if service times were adequate, and whether other criteria met their standards. Customer’s attention spans are typically short, limiting the details that can be gotten, but that does not make the information any less valuable. The best mystery shopping programs combine the viewpoints, perceptions and facts from both sides of the register, so to speak, for a complete picture of the customer experience.

For retailers, the challenge of finding helpful, cheerful store employees who care about treating the customer well grows greater each year. While technology can measure many quantifiable aspects of store management, customer service or the lack thereof is much more difficult to quantify and correct. Certainly, employees are not robots, so it is a challenge for stores to help employees see the value in treating customers well, rather than simply punching the clock to earn a paycheck.

Mystery shopping is a proven method for quantifying performance data and offering constructive suggestions for change. Used correctly, mystery shopping can improve employee morale and overall outlook. The employees win, the store wins, and the customer most certainly wins

Wal-Mart continues to heavily dominate the list with an 11.7% increase from 2005 to $348.65 billion in 2006. Home Depot and Kroger are 2nd and 3rd and, although both companies saw good increases, both are surrounded by talks of changes or takeovers of late. Costco and Target hang on to spots #4 and #5, with both giants sweating it out to reinvent themselves to ensure future appeal. Bringing up the rear are Sears, Walgreens and CVS, Loew’s and Safeway at number ten.
SAP America, who sponsored STORES Top 100 List, recognizes the importance of growth and innovation to retail. Senior VP and General Manager Jim Mattecheck stated, “”Successful companies continuously find ways to offer a differentiated shopping experience that inspires customers to shop with that retailer again and again. SAP has a proven track record of helping retailers achieve their goals. In fact, more than 4,300 retailers worldwide are SAP customers.”

This year’s list included restaurants for the first time, including McDonald’s (at #16), Yum! Brands (at #35), Starbucks (at #42), Darden Restaurants (at #53), Brinker International (at #73), and Outback Steakhouse (at #80). STORES’ Reda commented that while “consumers may have changed, their needs have not. Americans still have to put dinner on the table every night, but now they are looking to restaurants to fill a larger portion of that need rather than relying exclusively on traditional supermarkets. Successful restaurants understand how to cater to today’s consumers, and there are some ideas they’re trying that traditional retailers may want to borrow.”