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.

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.

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!

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.

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.

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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?

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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

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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.

It may not be realistic for every CEO to go undercover within their own company, fun as it may be,  but mystery shoppers can provide many of the same benefits that are seen on the show, including:

1. Insight on employee satisfaction – this seems to be the main focus of Undercover Boss as the executives take the time to sit down and discuss job satisfaction. Secret shoppers can gauge this through the actions and job commitment of employees that they encounter during a visit. From there, businesses can run with the feedback and try to improve in areas that staff feel are lacking for even better morale!
2. Customer response to company policies - all retail establishments have practices in place that employees are expected to uphold when dealing with customers. Some might be better in theory than in practice, as the Undercover Bosses learn when working on the front lines. Certain sales tactics, for example, might not get the desired response from customers. Mystery shop reporting may help understand the unintended consequences of these policies.

These are just a couple of the links to mystery shopping that appear on Undercover Boss. You might be tempted to tune in just to see executives embarrassing themselves, but you’ll find your interest piqued about secret shopping.

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.