The most recent HBR (Harvard Business Review) features Kevin Peters, president of Office Depot, taking on mystery shopping himself (at first) to drive results. He discovered what most of our clients tell us; Mystery shopping works.

The problem is most companies (and unfortunately sometimes their supplier) don’t do it correctly. When they don’t get the results they hope for, they end up “throwing out the baby with the bath water.”

In summary,
- Office Depot had a mystery shopping program that did not work.
- The president went out the stores and did the job himself.
- Peters found they were not measuring the right things.
- Office Depot is now recalibrating and rolling out to its stores
- Talking directly to his customers in the store yielded information that Peters was not getting through his executives or customer satisfaction survey program.
- Peters wanted to find more ways to find out why people are leaving the store without making a purchase.

Our take on the story
The mystery shopping program was set up for failure before it ever began.

It is unfortunate that Office Depot probably wasted hundreds of thousands of dollars in what could have been easily identified upfront. “If you don’t ask the right questions, you will not get the right answers.”

We love Harvard Business Review but they did sort of take the angle of the president doing the old “if you want the job done right do it yourself” mantra. While this was novel for the article, in reality really cannot happen across any chain in a meaningful or sustainable way.

Although we do not know it for a fact, the provider they mention is probably not doing their new program anymore (nor is Peters) and the person or team who brought the provider in and managed the program is probably not at Office Depot either. The person or team in charge of Customer Experience has a great opportunity in front of them; not just because they recalibrated their mystery shop program, but because they still have huge opportunities.

The opportunity is the huge open gap on the non-purchaser side of the customer experience.

There was something else that was alluded to but not pointed out. What about the people who made a purchase, but would have bought more? They are screaming for customer intercepts. I wonder if the president will do them too?

My bottom line
I love that Peters got his hands dirty in the store and actually talked to the customers. it is a great lesson for all retail executives. We just want them to be successful in the long term; not because HBR said so, but their customer, their employees and their stock price need them to be.

If you would like additional insights on why most mystery shopping programs do not work (and what to do about it) or are interested in finding out how to understand why customers leave your store and do not make a purchase, let us know. In the meantime, we look forward to sharing future insights that can help you succeed in your position and create a future full of possibility.

Whether employees recognize it or not, the financial industry is one where they have substantial responsibility. After all, they are tasked with guarding the investments of and personal finances of their clients. People walking into a bank, for example, have far more to lose from a “poor” customer service experience than someone making a purchase at a retail outlet. A lack of attention to detail by an employee could mean (at least temporary) financial stress for clients.

Mystery shoppers can help in the financial industry too, in order to ensure that the highest level of customer service is being delivered to protect the assets of their clients. It is often a stigma that it is the job of mystery shoppers to catch employees doing something wrong. In the financial world, there might be an even greater perception that this is the goal, because employers can then have grounds to fire individuals that they’ve suspected of stealing if they are caught in the act. This, however, is not the only thing that can be accomplished.

As stated above, in the financial world customer service is important – both in the traditional sense and in another definition of the term as well. Of course the attitude of employees matters, but even more importantly, clients care about attention to detail and accuracy. A client in a bank will always appreciate someone who is friendly yet focused on their job over someone that goes out of their way to make nice, because that may distract them from what is important.

As a result, the evaluation of mystery shoppers in the financial sector may be a little bit different than in other industries. The jobs are simply more demanding when there is more at stake and that cannot be overlooked. So in this world, using mystery shopping for security doesn’t mean that it strictly takes on the role of walking and talking security cameras – it’s about ensuring people are doing their jobs well and providing feedback on areas where employees may benefit from further training.

• The majority of the shops in Cambridge are smaller retailers that have staff more dedicated to customer satisfaction (in many cases, the staff are also the owners or there is a large owner presence).
• One of the businesses, Catherine Jones Jewellery, says that the secret is really valuing customers and having customers that appreciate good customer service.
• Customers surveyed claimed that they appreciated the experience the city had to offer because of a good mix of stores, the fact that the shopping area was always clean and tidy, and 90% said that feeling safe makes for an ideal shopping experience.
• The fact that price was not one of the top factors mentioned by individuals surveyed indicates that a bargain shopping experience does not necessarily forgive poor customer service.

Many retailers brush off the importance of mystery shopping, thinking that the results will not have an impact on their business model. What this shows is that customer service truly matters and those that do not put their focus there should be looking at making changes.

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.

I will be moderating a panel discussing the future of social media in mystery shopping from 1:30 pm – 3:00 pm on Day 2, Wednesday, October 19. The members of the panel are Benj Miller, Eyespeak; Erin Steinbruegge, The Loud Few and Rich Wilson, Big Scary Cranium. It should be a lively discussion.

Leading up to the conference, we will be discussing social media in several blog posts here, so subscribe to our RSS feed in Google Reader (or your favorite reader) if you have not already.

Social media is changing the dynamics of the customer’s experience at every level, delivering power that once resided solely in corporate offices to the individual consumer. As these changes in the customer’s interaction with business take place, businesses are making adjustments in the ways they view the customer experience and the ways they measure and respond to customers. These changes already have altered the mystery shopping business, but the changes to come will dwarf those we have seen thus far.

Using social media to seek mystery shoppers is the tip of the iceberg. Today and tomorrow, mystery shopping will be part of the “big data” discussion about integrating customer experience information, including data extracted through social media, interactions with marketing communications, and innumerable other customer-focused practices. In this session, you will hear from experts who will discuss emerging developments in social media and SEO, as well as practical ways for mystery shopping companies to position themselves both to better serve their clients and better position themselves to get and keep new clients.

As a provider of mystery shopping services, I get a bit anxious every time a story about our industry appears in the press. When words such as “stealth” appears in a headline and mystery shoppers appears in quotes, the media is unwittingly contributing to further degenerating the perception of what mystery shopping is. It’s not their fault; our industry itself may be contributing to the mis-perception with titles like “secret shopper.”

Mystery shopping is not “stealth.” It is not employing “gotcha tactics” to expose anyone. It is gathering objective, measurable data so an organization can make decisions based on what is really happening rather than on what they think is happening. As it relates to the story that appeared in the Times, most of the doctor shortage we hear about is anecdotal evidence. A quality mystery shopping program could have helped establish an objective view of the availability of doctors.

An objective survey is necessary because we don’t know what new patients are being told when they call and ask, “Are you taking new patients? Are you taking new patients with Medicaid/Medicare?” Today we can guess at the doctor shortage issue by calculating the number of doctors per capita and slice and dice those numbers, but suspecting we don’t have enough doctors is not the same as knowing we don’t have enough doctors available who will take new patients.

Under the Affordable Care Act, there are an estimated 30 million new patients who will need a primary care doctor. Measuring the ability of the medical industry to accommodate the additional demand is the responsible thing to do. Scaring patients and getting doctors riled up about distrusting government is not. A quality mystery shopping program for health care would benefit the medical provider industry as much as it would the government.

In 2014, the ACA will become law. It makes sense that the medical industry would want to be structured to reduce the stress an additional patient load of 30 million would cause.

Change is hard for everyone. But going into change without knowing what you are up against is irresponsible at best, reckless at worst. Mystery shopping helps gather objective data so responsible decisions can be made at all levels; from the patient through the health care providers to the universities who train them.

It may be time for us in the mystery shopping industry to take a realistic view at how the retail and other service industries view our services. In the end analysis — through an objective lens — we may find that we’re contributing to our own worst public relations.

Editor’s note: Volition posted a link to this article and mystery shoppers are weighing in on the discussion.

It is important to look at all areas of brand identity and how it is being received by your customers. Ensure that your mystery shopping service focuses upon the following:

• Your return policy
• The availability of product
• The kind of customer service that is offered when a shopper walks through the door
• How you troubleshoot problems that occur
• The cleanliness and overall appearance of the environment
• The consistency with the level of service provided in multiple franchises
• The availability of customer service by phone, email or other online methods
• Your brand values
• The perks you offer to your employees

You want to be consistent in all of the above areas if you want your customers to know who you are. But the brand identity that you establish must also adapt to fulfill the needs or those customers.

Here’s the reality – the best tools to reach customers and learn how to effectively market to them are more attainable than most would think. You don’t need to find the holy grail, because mystery shopping will offer the solution that any business needs. Is there a better way to find out exactly what your customer wants than through direct observation?

Here’s what mystery shopping can offer than traditional marketing cannot:

• The ability to zero in on the needs/wants of customers
• The ability to identify the areas where staff meet company policies and objectives or where they fall short
• The ability to gather very targeted data and change the definition and needs of said targeted data with a moment’s notice

At the end of the day, you can gather all of the data you want through marketing with regards to who your target market is and what they want. Or, you can acquire that information directly from your target market – the people shopping in your stores – to know what works and what doesn’t for them.

You’d be surprised at the frequency that a repeat mystery shopper is requested. It might be stating the obvious, but here are the reasons why that is a bad idea:

• The store employees may start to recognize the mystery shopper - although retail stores do get repeat customers, the same mystery shopper clearly being a very thorough shopper may get suspicious. The first time a real shopper visits a store, they may have a lot of questions about policies and require guidance on where to find what.  A real shopper doing that every time is either high maintenance, or they have a job to do.
• They can no longer be objective – a mystery shopper needs to be objective when providing their reports. After a visit or two they start to form expectations that can taint the next experience.
• They may form relationships - whether they realize it or not, they may start to form an attachment to certain staff members, which can work both ways. When this happens, a mystery shopper is no longer getting the experience of the average customer; they’ve been boosted to VIP level!

Hire the mystery shopping program, but if you want results, make sure more than one shopper is on the job. A reputable place will have more than one mystery shopper prepared to do a great job anyway!

To help you accomplish this, here are some tips on developing your mystery shopping survey questions:

• Avoid questions that could be subjective. You don’t want your mystery shopper to make assumptions; because that does not give you reliable data to improve your business. For example, asking if the staff seemed to be enjoying their job leaves too much room for interpretation. Instead, use your question to obtain more information about the level of customer service provided.
• Be specific with your questions. The example used above already has one flaw (as outlined), but its second flaw is that it’s far too vague. What are you really asking with that question? Get specific and instead ask things like: were you greeted upon entering? What did the staff seem to be doing (helping customers? Stocking shelves? Making personal calls on the phone?) ?
• Focus on things a customer would know. Your mystery shopping service may be familiar with some of your specific policies and procedures, but an average customer entering the business environment may not be. As a result, it is more prudent to ask only about those things a mystery shopper would judge based on observation alone.

Even if you have questions about the things happening at your business when you’re not there, your mystery shopping service should only focus on objective data that allows you to make improvements. After all, if you want measurable results. You can’t gather data that is intangible.

A mystery shopping service can help a company turn itself around, but the process takes time. The assessments completed can help identify procedures that could be improved to deliver a better customer experience. A program like this looks at the big picture as well as all of the minor details that they encounter along the way. When the mystery shopping service has worked their magic,* the store, the staff, the management and the atmosphere all have a positive impact upon every customer that walks through the doors.

Of course, this takes time so the mystery shopping service can gather all of the required data, advise the business on the changes they could make, and then complete additional review. Those that expect that hiring a mystery shopping service to dig them out of a hole fast, are never going to get what they expect.

All good things are worth waiting for, and the mystery shopping route is a journey, so this applies.

*When we say magic, we really mean a time-tested formula based on objective data and experience.

If you are not yet convinced that this multi-faceted approach is essential for the greatest success, then we’ll show you the benefits:

How Mystery Shopping Works

• Mystery shopping relies upon observations on how the staff members perform
• They evaluate things like how many staff members were on the floor at the store, checkout times, compliance to known company policies, the overall level of knowledge of staff, and the speed of checkout.
• Mystery shoppers are objective in their approach, but they are looking at the fine details.

How Customer Satisfaction Data Works

• Actual customers are subjective, and at the end of the day, it isn’t always the fine details that determine how pleased they were with their shopping experience. The overall vibe they get can determine whether or not they will come back, even if they can’t pinpoint something about the experience that they didn’t appreciate.
• While customers may not be totally objective, they are the ones that have a direct impact on business revenue.
• Customers are surveyed at random.

Essentially, a well-rounded mystery shopping program that incorporates both of the components outlined above, provides feedback from two different and essential perspectives. As a retailer, you may choose to focus more heavily on one type of feedback over another, but having it all available to you will have the greatest benefit to your success.

Mystery shopping focuses on staff performance — how well the company executes its operations and customer service objectives based on fact-based observations. 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 number 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. Many see employee performance in a completely different light. This is where customer surveys 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 that opinion is as valuable as a mystery shopper’s report. Generally, comsumers 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 for a complete picture of the customer experience.

We are used to seeing Amazon as a leader in e-commerce. In many ways, it is a bit surprising that they have come so late to the party with the introduction of their own flash sale site, Myhabitat.

But let’s not write Amazon off too soon. They’ve had the chance to see what works and what doesn’t  by watching other sites like Rue La La, Hautelook and Gilt that started the flash sale trend. Considering Amazon’s connections with many major retailers of designer clothing, there is a good chance they might just be in a position to one-up their competition. Or at least attain a strong position as a major player.

Instead of rolling our eyes that Amazon is following a trend rather than setting one, let’s look at what Amazon is doing to set themselves apart from others offering something similar.

• Amazon can fulfill orders much faster than their competitors because they actually have access to the warehouses before the sale has even begun. Other sites only obtain and ship the items that have been sold, taking time for them to get the items from the retailers. Sometimes, they have to rely on the retailers ship on their behalf, pushing them one step further from the process.
• Amazon offers free shipping and free returns so those that purchase on impulse don’t have to hesitate. Often with online shopping for clothing, people order multiple sizes or colours to ensure they get something they love. The fact that they don’t have to pay extra for this luxury means even more sales will be made. Amazon credits all returns with funds that can be used at any of Amazon’s sites (Amazon.com, Endless or Myhabitat).
• They are in a position to offer flash sales from 800 major brands with which they already have an affiliate relationship.
• Amazon has strong online merchandising. Amazon ensures people can see what they’re buying with images that offer a 360 degree view of each garment.

Pulling the plug on a mystery shopping program because scores plateau temporarily is one of the most common mistakes retailers make. Ensure you don’t fall into this trap.

Below are some some guidelines on what you can do as a retailer to make sure your mystery shopping program works to its maximum benefit.

1. Shop the right stores – you may not feel it’s necessary to use a mystery shopping program to see what’s happening at your stores with the top sales volume. But wouldn’t you like to know what they’re doing right that could help other stores? Or what they could be doing to perform even better than they are already? Ensure you don’t forget about your top shrink stores either; it’s not just the least profitable stores that can benefit.
2. Recognize all positive efforts of stores based on shopping results – just because you haven’t seen a sharp incline of profits doesn’t mean your stores aren’t doing something right. When reviewing your shopper reports, ensure you give kudos where it’s due. Recognize the stores that have been showing an improvement with customer experience initiatives, efficiency and more.
3. Make sure you communicate throughout the process – using a mystery shopping program doesn’t replace the need for hands-on actions. Schedule regular meetings with store management, and stay engaged with customers. The latter can be accomplished by keeping customers informed of initiatives with contests and customer satisfaction programs.

Remember, a mystery shopping program will take you much of the way, but you’ve got to take steps to make sure you make the most of the tools you’re given!

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.

Where are the gaps in your brand promise to your customers? Do you know?

Mystery shopping lets you know and gives you the tools to help correct the gaps.

.

Using social media for this purpose can have both pros and cons.

Pros of Using Social Media for Customer Experience Feedback

• Social media encourages individuals to be open and voice their opinions
• When one consumer voices an opinion in a public forum, others are apt to jump in
• Word of mouth created by consumers may cause businesses to share best practices
• Consumers can ask questions and reach out to consumers and get an assessment from real shoppers
• When negative experiences are shared, retailers have the opportunity to publicly resolve the issue

Cons of Using Social Media for Customer Experience Feedback

• There’s the risk that dirty laundry will be aired, and social media users may only see one side of the story
• Competitors might be aware of weaknesses

As a retailer, it’s up to you to determine where you draw that line. You may choose to air it all online to benefit from social media, or you may encourage customers to provide extensive feedback in a private venue.

What’s your opinion on this?

.

A women goes into Nordstrom to return snow tires and they take them back without a receipt. Right now, you are probably not questioning the “without a receipt” part. But you are probably scratching your head over the snow tire part.

I didn’t think Nordstrom sold snow tires

You are right, they don’t. But they took them back anyway.

Now, I’m not sure if the story is true or when it began, but this is pretty extraordinary. The snow tires and woman may be fictitious, but the return policy at Nordstrom is true. Stories like this make me feel comfortable that if anything goes wrong with anything I buy at Nordstrom, it will be taken care of without a hassle.

That is what I call service without boundaries. No doubt, it is good for business. But more often than not, these scenarios backfire because most store associates are not empowered to provide service without boundaries.

A different approach
I recently took a trip to Switzerland. The weather was beautiful one day and we decided to sit outside at a local restaurant. The only problem was the tables available were directly in the sun. I didn’t feel like squinting the whole time I was eating, so we asked the hostess if we could sit on the other side of the deck.

The only empty tables needed to be dried a bit since they were not in the sun and some ice melted on them. Her response was: You can sit here (sunny table #1), here (sunny table #2) or leave.

Was I insulted? No. And if I was, I was quickly won over by the wonderful food.

Part of this conversation could have gotten lost in translation. English was not her first language. But as days passed on my trip, I noticed it more and more in other situations. The Swiss have a reputation for quality, order and timeliness. They have a system and that system works; partly because they set boundaries. Even in service.

One more story…
When we were in Zurich, we went into a restaurant. They said they could seat us, but we only had one hour. To underscore this rule, they gave us a card to remind us when we had to leave. We understood the rules. The service was super-fast; the server understood the rules as well.

The food was delicious and we finished in thirty minutes. What did we do then? We had an hour and only spent half of it. So, we ordered another entree, which we split, and another round of beers. That food also came quickly. After we finished that round, we saw we still had another fifteen minutes. So, we ordered two desserts and two cappuccinos and we paid our bill with three minutes to spare! Oh, what fun. And the restaurant increased our tab by 40% because they set boundaries. We left feeling like we won a prize. Next time, we’ll beat that three minutes.

How this differs from American service
One of the cultural expectation that is hamstringing US companies is this: Companies say “do whatever it takes to satisfy the customer.” The problem is that people — both the company and their customers — don’t know what that means.

Service with boundaries not only helps associates understand what they can and cannot do to help customers, but also the companies themselves. When they know the rules, customers will never be disappointed. The problem comes when everyone has different expectations of what the experience should or shouldn’t be.

Creating alignment in your organization begins and ends with the customer. But you and your associates are the bond, the glue that very specifically defines the perfect customer experience for everyone to see.

And then measure the heck out of it. And be willing to change if needed.

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

.

There is some truth there, but only when you link up with the right mystery shopping company. You hear the bad press on businesses getting taken by the less than reputable mystery shopping firms; but it can happen to those that work for them as well. Before signing on the dotted line to become a mystery shopper, ask the company the following questions:

1. Do I have to pay to join? Some mystery shopping companies require candidates to pay in order to get added to their roster. You should never have to pay anyone anything when you take a job. Particularly not when work is not guaranteed.
2. Do I have to pay for my purchases? Many mystery shopping companies will have you shop at the stores that you’re already familiar with. As a regular customer, they believe you’re in a better position to make a judgement. Just because you’re on a mystery shopping assignment at a store you’d purchase from already doesn’t mean the purchases should be entirely on your dime. Purchase guidelines should be set before you start shopping.
3. What am I responsible for? The workload requirements vary with regards to your deliverables as a mystery shopper. Get your responsibilities in writing, plain and simple.

Even if you aren’t a prospective mystery shopper reading this and happen to be a business looking to hire one, recognize the importance of the above.

Happy, satisfied mystery shoppers will be a much greater asset to the integrity of your shops.