This article explains the term mystery shopping in a practical way. After reading this article you will understand the definition and the basics of this powerful field-based marketing research tool.
History of mystery shopping
Mystery shopping first occurred in the 1940s. It was used to the analyze the integrity of employees. Mystery shoppers would pose as employees and analyze attempts of theft by other employees or any other activity that could harm the organization.
Since then, the objective of mystery shopping has demonstrated to change with the changing business environment. Today’s companies execute business with a customer-centric strategy because customers determine the success of the organization. They have access to technology and can share their experience online.
If these customers have experienced negative experiences of a company, the chance they will share this experience is high. The result of this could substantially harm the organization when potential customers decide not to buy a product or service based on negative customer feedback.
It is for this reason crucial for current organizations to improve the customer experience, and therefore, improve customer satisfaction and create customer delight. This customer-centric strategy have demonstrated to be an effective research technique to gain insights from the organization at a front level perspective.
It enables organization to improve operational efficiency and gain insight in the extent to which the organization’s product is delivered.
What is Mystery shopping?
Today, mystery shopping is seen as an evaluation process that is used by market research companies and internally by organizations to measure the quality of the customer experience. It focusses on how organizations compliance with regulations, but mystery shopping is additionally used to collect specific information about products and services. The central objective is to improve organizational performance.
A mystery shopper performs mystery shopping. This is a person who visit stores and act as a usual customer or employee but who simultaneously collect information about the business’s services and related business activities. The information that should be collected varies per organization but could include displays, prices, and the quality of the work of the employees.
If mystery shopping occurs at a service company, the information that should be collected also varies per organization, but it could include identifying if employees understand how to deliver a brand in terms of customer service.
It could also include but is not limited to observing kindness and the availability of customer relationship representatives.
The tasks of mystery shoppers vary enormously and could include purchasing products, asking questions, registering complaints or act as a general or new employee. The final deliverable is many times a detailed report of the experience, but the mystery shopper can also discuss the findings in a meeting with the managers of a company.
An important element of mystery shopping is working with parameters which are used to measure organizational performance. Market research companies and organizations internally identify the firm’s most important customer service characteristics and objectives and next use these variables to develop a mystery shopping questionnaire for the mystery shopper. Examples of variables used in the assessment could include but are not limited to:
- Customer service
- Cash handling
- Visualization of displays
- Product knowledge
- Operational efficiency
Another way to analyze the variables is when the mystery shopper is assigned to use audio and video recording to capture the details of the experience. This way of researching can help the business compare its improvements. The recordings can also be used for internal learning purposes for employees.
Mystery shopping can be beneficial for any business where it is useful to obtain knowledge about the customers’ experience of the organization. Examples of organizations where mystery shopping frequently occur are at retail stores, banks, theatres, hospitals, hotels, and restaurants.
Characteristics of a mystery shopper
In order to work in mystery shopping, the mystery shopper need to possess a combination of skills and attributes. Mystery shoppers need to be flexible in working hours because for each job a different company is selected, and the research methodology could also vary per company.
They next should be open-minded because it is easy for people to be biased. Mystery shopping sometimes requires acting in a specific way, and for this reason, mystery shoppers should be comfortable when they have to act in this particular way.
In addition, communication skills are highly important in mystery shopping because mystery shoppers have to communicate to the clients about their experience. Many times, they also have to write about the experience in the form of a report. Finally, mystery shoppers must have an eye for detail because when mystery shopping occur it is not possible to write down notes since the identity of the secret shopper must be hidden.
When the mystery shopper possesses the right mix of qualities it is highly likely that mystery shopping is going to benefit the future performance of the organization in terms of worker’s performance and customer service.
Practical example of mystery shopping
At this point, the term mystery shopping has been explained in addition to why companies use this research technique. As described previously, mystery shopping can be beneficial for any organization to improve organizational performance to become or remain competitive in the business environment. Consider the following example of a business that needs improvement in its way of working:
Company XYZ is the parent company of various hotel and was established 30 years ago. In that time, the market was demanding more hotels to keep up with increased tourism. Businesses in that time were instead of customer-driven more market-driven.
Company XYZ designed a strategy that led to an annual average occupancy rate of 70 percent at all their subsidiaries. However, as tourism increased, the competition also increased. The potential market grew as a result, but due to the current increased competition, the annual occupancy rate dropped to 45 percent.
The CEO of company XYZ, James Cooper, thought that probably drastic changes should be made to the company’s way of working. According to the CEO, the best way to identify what needs to be improved is by implementing mystery shopping.
Company XYZ identified the following:
- Mission statement: XYZ is committed to continually improve its service, satisfy the need of our guests, add value to our brands, and commit to developing sustainable development.
- XYZ is under high pressure.
- There is a need to identify what is going on in the business.
- The goal is to look for a new way of work.
CEO James Cooper decided that he would present himself as a new employee in various positions such as a front office representative and cleaner. The goal is to assess the of cleanness of the rooms, the speed of operational handlings, and complaint handlings.
Mystery shopping enabled James Cooper to gain insights into the subsidiaries. In his position as a front office representative, he noticed that administrative handlings take too long and as a result, customers wait unnecessarily long.
This leads to working under pressure, and as a consequence, mistakes could be made. There is no time left to register or process complaints, which is critical to improving customer service. In his job as a cleaner, he observed that the available time to clean all rooms is not enough to do it properly.
Because of the mystery shopping at the subsidiaries, the CEO of company XYZ now knows which areas of business the organization needs improvement. Mystery shopping enabled James Cooper to see the business from a different angle, namely the point of view of a customer.
He noticed that the rooms are not optimally clean, which is unnecessary and could come at a cost of customers. He additionally argued that the front office representatives are not able to sell the company’s brand as it is supposed to because of the working pressure.
At this point, he will share his findings with executive managers who are next responsible for designing a new way of running the business that will help the organization become competitive again. Mystery shopping helped the organization to obtain these critical insights which will help the organization to grow.
It’s your turn
What do you think? Have you ever heard of mystery shopping? Have you worked as a mystery shopper? Do you recognize any of the previously described elements that are used during secret shopping or do you have more additions?
Share your experience and knowledge in the comments box below.
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- Wiele, T. V. D., Hesselink, M., & Iwaarden, J. V. (2005). Mystery shopping: A tool to develop insight into customer service provision. Total Quality Management & Business Excellence, 16(4), 529-541.
- Wilson, A. M. (2001). Mystery shopping: Using deception to measure service performance. Psychology & Marketing, 18(7), 721-734
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