Mystery Shopping – Twelve Major Pitfalls

Why it simply doesn’t work and what to use instead.

What is Mystery Shopping?

First established in the early 1940’s, mystery shopping has been around for a while. But just because it’s been in action for almost 70 years, doesn’t mean that it’s an effective method of data gathering, performance audit or performance improvement. In fact, we argue, that at best, it is a high cost, low success employee training tool. Nowadays, there are much better alternatives for a company to consider.

The purpose of mystery shopper program is to measure employee integrity, customer service and operating standards. Together these form, ‘Customer Experience’.

So what is the best way to do this?

Perhaps by engaging a third-party provider. They will send in undercover customers so you can find out everything you need to know about the customer experience, and keep an eye on your staff at the same time.

Sounds great, right?

Unfortunately, it’s not quite as clear-cut as that. Not only is this old-school approach ineffective for judging customer experience, but it has at least a dozen reasons pitfalls. These should cause a business to challenge the wisdom of having a mystery shopping program..

Who Uses Mystery Shopping?

Clearly only for those with brick and mortar channels, many industries use mystery shopping, but the most common of these brands tend to be in retail, healthcare, and hospitality. These include:

• High-street stores
• Hotels and accommodation providers
• Movie theaters
• Restaurants, cafes and fast-food chains
• Health care facilities
• Independent shops

What is the Purpose of Mystery Shopping?

A secret shopper gauges the collective performance of employees within a business. The shopping method is predominantly used by market research companies, watchdog organizations, and by brands themselves. They measure the quality of service, across the entire customer journey and to confirm whether employees are complying with regulations and policies.

In addition, it can also often used to gather specific information about products and services. In either case, the information is then fed back to the organization and used to improve internal processes and audit employees.

Does Mystery Shopping Work?

Much debated by many, but, in a nutshell:

Secret shopping isn’t an effective method of measurement – in any form. And many agree:

In recent months we’ve had the opportunity to talk to over a hundred retail executives about their mystery shopping programs. The majority believe that the return on investment is poor but they continue to invest in them due to a perceived lack of alternatives. Maze – Australia

 

It’s time to say goodbye to mystery shopping. It is this old-school approach that is ineffective for judging customer experience. Customer Radar Retail Blog

Perhaps this result is not a surprise. After all:

• Asking fake customers (professional secret shoppers)
• Paid by a third party (secret shopping agency)
• To assess unfamiliar processes and procedures (mystery shop program)
• Using a synthetic transaction
• At most, once a month
• With the resultant poor analysis (shopping reports)

Who are we kidding people?

It is not going to provide valuable and actionable data This is not going to provide objective feedback and actionable data – rather deliver only corporate defined customer experiences.

Is there Data?

The judgment that mystery shopping doesn’t actually work comes down to the data from several studies, many from the retail industry.

Don’t believe me? A detailed article from The Journal of Retailing from May 2019 reviewed the following question:

Do Mystery Shoppers Really Predict Customer Satisfaction and Sales Performance?

Their conclusions are startling:

• We observe a low correlation between Mystery Shopper assessments and evaluations of customers
• In contrast to customer evaluations, Mystery Shopper assessments cannot predict sales.
• These findings put the informative value of Mystery Shopper data into question
• The results show that Secret Shoppers are not good proxies for real customers

Our research reveals that the level of agreement between the assessments of mystery shoppers and those of real customers is low and that MS assessments are not effective in predicting customer satisfaction.

In short, a resounding – NO!

The 12 Flaws of Mystery Shopping 

Here are some of the reasons that mystery shopping should be replaced with something better. We have split these into Strategic and Operational flaws.

Strategic Flaws

1. Expensive – Mystery shopping is a considerable expense to the business. Each visit from a mystery shopper costs between $30 – $100. In contrast, alternatives to this cost the same for unlimited feedback.
2. Lack of ROI – Not only is it expensive, but there is little evidence that mystery shopping brings in much return on investment.
3. Not Enough Data to be Useful – Unlike in-store surveys and exit polls, mystery shopping is a one-man, one data point deal. Therefore, the level of data that comes from just one mystery shopping experience is always going to be very minimal. This the data becomes unreliable for operating improvements.
4. Not Time-Sensitive – Shopper findings take a while to reach the relevant management. This means they become irrelevant quite quickly. Even worse, the actions taken by staff are seldom tracked so the business cannot determine if the staff actions have closed out the original issue.
5. No Prioritization – As there is no little data, the business has no method to rank any findings. Instead, all issues are treated equally. Yet we know some customer issues are fatal flaws, while others may be just annoyances.
6. Inconsistent – Mystery Shopping is only as good as the Mystery Shopper. These people themselves vary enormously in capability. This is partly driven by the high turnover of the industry. They may also not represent the demographics of the real business. All this means that any result that one shopper produces may be entirely inconsistent with another.

Operational Flaws

1. False Premise – While mystery shoppers should be unbiased, remember they are not real customers. Consequently, their overall experience cannot be genuine. They bring their own preferences, habits, and shopping senses to the job. Moreover, they are looking for issues and a level of service of a synthetic transaction. This means mystery shoppers have a built-in negative bias.
2. Not Specific – Mystery shoppers don’t always cover enough of the shopping experience for the results to be meaningful. This means, for example, they may never uncover the main issue that drives customer behavior.
3. Staff Awareness – Employees often know who the mystery shoppers are or when they are visiting. Consequently, they can prepare for the visit. They react differently to a regular customer, likely over-performing in presentation and service.
4. Unnatural – Most mystery shoppers are instructed to give feedback on specific areas, in a certain order, using a specific process. These may not be familiar to the shopper. The shopper may also just be incompetent. This means it is unlikely for a mystery shopper to behave like a typical customer, and will inevitably produce unnatural results with no real customer stories.
5. No Authenticity – Questioning a mystery shoppers’ skills, reporting and credibility is common practice by employees (especially a location manager), in order to improve scores. This takes time, deflects from efforts to improve operations and chips away at the credibility of the Mystery Shopping organization.
6. Heavy Workload – Using a mystery shopper can take up more internal administration and people power than planned. This can tie up and resources and be a distraction from running the business.

The Alternative to the Mystery Shopping program – Use Your Own Customers

Your business already has a team of hundreds or thousands of ‘mystery shoppers’ – the customers that purchase from you every day – so use them! Moreover, real customers are authentic – they are the real thing, not a proxy. Customer feedback technology exists to take the mystery out of these shoppers by providing you with validated, instant feedback. Armed with this, you can now continuously improve the aspects of your business that you know your customers care about.

This instant opportunity to loop with customers helps deliver customer loyalty.

There are solutions out there that provide customer feedback which captures comments, ratings, and feedback from real customers using their mobile phone. This on the spot  (at the point of experience) data arrives in real-time and Feedback is generated throughout the customers’ experience and delivered to the business in real-time. This means it is used to assess any part of the offer eg. Staff courtesy, queuing, product availability, cleanliness, product quality – even restroom cleanliness.

This allows you, as a business owner, to track all feedback and immediately respond to any issue – within seconds. Consequently, your team can fix the problem and connect with the customer – while they are still in your location. Perhaps this is the biggest challenge that mystery shopping fails to address.

The big benefits here are:

1. Improved customer retention
2. Increased operational standards
3. Fewer complaints on social media
4. Lower maintenance and HSE exposure
5. Lower overall feedback costs
6. More data and detailed analysis

In this modern-day and age of technology-driven opportunities, there are far more responsive and results-focused ways in which to find out how your organization is operating. Many of these leverage the ever-present, cell phone. This means that even without a mystery shopper, it’s entirely feasible to measure the performance of your business from customer entrance to exit and everything in between.

More to the point, it is a more effective strategy to take. In fact, this is the conclusion from a recent CustomerThink article published in August, that concludes Mystery Shopping is ineffective.

It’s a mystery no longer.

Opiniator is a customer feedback and recovery platform, delivered as SaaS.  It captures on location comments, ratings and feedback from real customers using their mobile phone. This powerful technology allows you, as a business owner, to track all feedback and monitor a resolution to any issue. This closed-loop feedback system will help improve business operations and customer satisfaction.

This form of real-time feedback capture means that a business respond to a negative experience and connect with a disgruntled customer before they take their business elsewhere.

It’s time to give mystery shopping up and use a digital alternative instead ie. a real-time data capturing and actionable customer feedback system using their own cell phone.