How Does Mystery Shopping Work?

Mystery shopping isn’t a new market research tool. As a matter of fact, it has been around for decades already and is currently a billion-dollar industry worldwide. In the U.S. alone, companies spend more than $600 million every year to fund this activity.

Fig. 1. Annual global spend for market research (Source: Statista)

Mystery shopping takes only 1% of the total spend that businesses allocate to market research. However, the information gathered from this tool is invaluable to organizations worldwide.

But what is mystery shopping? How can an organization benefit from this market research tool? Let’s dive into it.

What is Mystery Shopping?

Mystery shopping is a market research tool that can help businesses asses a certain area of their operations. Retailers often evaluate their stores with the help of individuals called mystery shoppers. These shoppers are instructed to pose as typical customers and buy particular items. Their experience and observations upon visiting the store are reported back to the client who hired their service.

Mystery shopping started way back in the 1940s when it was used primarily by private investigators to evaluate the integrity of the employees working in banks and retail stores. Through this process, owners would know if their employees were stealing from them or doing unprofessional things that hinder business success. The practice later spread into other private industries as well as government-run departments like law enforcement, hospitals, national agencies, and park services.

Assessments back then were broader and based only on the word of the mystery shopper. Today, shoppers are equipped with AV equipment and guide questions which can help them better document their experiences. They’re also usually required to take pictures to capture the reality of what’s happening on the ground.

The process of mystery shopping is not limited to retail stores only. Hotels, restaurants, movie theaters, gyms, malls, banks, airlines, and even car dealership businesses benefit from the power of mystery shopping services. A variation of this type called mystery calling can be done on businesses like hospitals, law and accounting firms, and businesses that provide telecom services.

How Mystery Shopping Works

Organizations used to hire mystery shoppers directly to conduct the evaluation for them. Now, there are market research agencies like SeeLevel HX that can provide mystery shopping services through their pool of customer experience experts.

The organization, as the client, should discuss with the research agency and identify the kind of data they want to extract during the process. Companies hiring mystery shopping services should have a clear goal of what they want to get examined and measured. It can be about the product quality, customer service, shop cleanliness, or staff behavior.

A timeline is set on when to do the assessment. The duration of how long the mystery shopper should visit the store and the specific purchase is also discussed. Visits take from 15 minutes to an hour in most cases.

A mystery shopper’s responsibilities involve more than just entering the store and making the purchase. They take note of a lot of other factors including, but not limited to, the following items:

• What’s the name and branch of the store you visited?
• What was the time and date you entered the establishment?
• How did the shop look in general?
• How many staff were working during the time of the visit?
• How were the employees dressed?
• Were you greeted when you entered the shop? How did they greet you?
• How did the employees present themselves?
• Was the staff courteous and helpful with your queries?
• Did the employees display their knowledge of the products sold at the shop? Any questions they weren’t able to answer?
• How was the product presented? What are your personal opinions about the purchased item?
• How was your shopping experience in general?

For those conducting mystery calls, the assessment guidelines usually have the following items:

• When did you conduct the phone call? Specify the time and date.
• How were you received by the staff during the phone call?
• Did the staff introduce themselves properly?
• Did you call the store before visiting them in person?
• How did the call end?

The information gathered is reported back to the client through a questionnaire or a detailed report outlining the shopping experience. Mystery shoppers should be accurate, objective, and consistent with their assessment. This will make the evaluation more reliable for making important business decisions.

Testing Your Business

The method the shoppers will use to assess the shop must be determined beforehand. There are many methodologies that can be employed in mystery shopping and it’s not limited to in-store visit alone. The process can also be conducted through phone calls, questionnaires, and online shopping.

To let businesses assess different scenarios, various mystery shopping practices can be executed. The popular purchase and return method and the discrimination test will both examine how employees react in challenging situations. These approaches will allow companies to evaluate staff behavior and customer satisfaction to see if both areas live up to business expectations.

For example, you’re running a store that sells shoes. You want to know how your staff provides service to different types of customers. You can’t ask your staff directly because you’ll get unrealistic and sugar-coated responses. What you’d want to do is hire a number of mystery shoppers with a diverse set of characteristics to assess the service for you.

You may want to determine how your staff receives women in the age range of 55 to 60 years old. You may also need to see how they deal with younger shoppers ask a lot of questions and spend a lot of time loitering around the shop. Complaining customers are also a challenge to employees and you might want to see how your staff handle these kinds of clients.

It really depends on what specific information you want to identify about your business operations. Market research agencies like SeeLevel HX can provide you with shoppers that fall on a certain demographic. You can choose the income level, gender, age, and other criteria from more than 792,000 shoppers they employ.

Benefits of Mystery Shopping

According to a survey, 75% of companies interviewed want to differentiate their business from competitors in terms of customer service. Improving customer experience is the top priority of more than 90% of companies surveyed by the Mystery Shopping Providers Association of North America.

Mystery shopping may not have the biggest budget allocation but it definitely is a valuable market research tool for many companies. It gives precious insight on how the company is doing in terms of customer service and client satisfaction.

Next to price, customer service is the biggest factor that affects sales conversion, client satisfaction, and brand loyalty. According to statistics, almost 90% of customers will just transfer to a competing store if they feel unhappy with the service they receive. Most of the time customers won’t say anything to address their disappointment with the service they received, making it hard to pinpoint the exact source of the issue.

With the help of mystery shopping, organizations can verify the following factors that can affect the company’s success:

• How customer experience relates to the corporate culture and the policies enforced by the organization.
• How employees support and promote the brand identity the company wants to establish to its customers.
• How employees perform and display productivity during business hours.
• Possible room for improvement in the arena of human resource development.

The data gathered from mystery shopping activities can be used to develop training programs and best practices that can help improve the customer service delivered by the organization.

How about the mystery shoppers themselves? What’s in it for them?

Mystery shoppers earn around $8 to $25 per hour, depending on the type of business they’ll be assessing. The money they spent on purchasing the items from the store is also reimbursed in the process. Usually, they’re also allowed to keep the product they bought as part of their incentive.

Mystery shoppers should be aware of scams, though. The FTC has a number of guidelines that would greatly help mystery shoppers identify fraudulent jobs and other tricks that can get them into trouble.  For mystery shoppers looking for a reliable agency to work with, SeeLevel HX is who you should contact. Aside from getting regular gigs, they provide professional training to their mystery shoppers to make them more reliable in doing assessments.

Conclusion

Mystery shopping provides insights that are not readily available through typical survey methods and regular employee evaluation procedures. By hiring a professional mystery shopper, you’ll gain direct access to information from customers who are trained to objectively evaluate specific areas of your business operations.

If you want to assess how your company is doing in terms of customer service, the insightful reports SeeLevel HX provide will surely highlight your organization’s strengths and weaknesses. Just give us a call and let’s discuss how we can improve your operations.