Myetery Shopping Term Paper

MYSTERY SHOPPING

INTRODUCTION

Mystery shopping or a mystery consumer is a tool used by Mystery Shopping Providers and market research companies to measure quality of retail service or gather specific information about products and services. Mystery Shopping should be performed by a person, so called Mystery Shopper, who is unknown to the establishment the shopper is evaluating. ‘Mystery shoppers perform specific tasks—such as purchasing a product, asking questions, registering complaints or behaving in a certain way—and then provide detailed reports or feedback about their experiences.

Mystery shopping was standard practice by the early 1940s as a way to measure employee integrity. Tools used for mystery shopping assessments range from simple questionnaires to complete audio and video recordings. Mystery shopping can be used in any industry, with the most common venues being retail stores, hotels, movie theaters, restaurants, fast food chains, banks, gas stations, car dealerships, apartments, health clubs and health care facilities. In the UK mystery shopping is increasingly used to provide feedback on customer services provided by local authorities, and other non-profit organizations such as housing associations and churches.

Though the name itself may seem a bit mysterious, the concept of mystery shopping is actually straightforward. Also referred to as secret shopping, performance evaluations, service checks and frontline evaluations to name a few, mystery shopping allows companies to obtain a “snapshot in time” by trained researchers who know in advance what they are to evaluate. It provides management a method to quickly yet efficiently evaluate their business practices, deliverables, and employees from the perspective of a non-biased consumer.

METHODOLOGY.

When a client company hires a company providing mystery shopping services, a survey model will be drawn up and agreed to which defines what information and improvement factors the client company wishes to measure. These are then drawn up into survey instruments and assignments that are allocated to shoppers registered with the mystery shopping company.
The details and information points shoppers take note of typically include:
• number of employees in the store on entering
• how long it takes before the mystery shopper is greeted
• the name of the employees
• whether or not the greeting is friendly, ideally according to objective measures
• the questions asked by the shopper to find a suitable product
• the types of products shown
• the sales arguments used by the employee
• whether or how the employee attempted to close the sale
• whether the employee suggested any add-on sales
• whether the employee invited the shopper to come back to the store
• cleanliness of store and store associates
• speed of service
• compliance with company standards relating to service, store appearance, and grooming/presentation
Shoppers are often given instructions or procedures to make the transaction atypical to make the test of the knowledge and service skills of the employees more stringent or specific to a particular service issue (known as scenarios). For instance, mystery shoppers at a restaurant may pretend they are lactose-intolerant, or a clothing store mystery shopper could inquire about gift-wrapping services. Not all mystery shopping scenarios include a purchase.
While gathering information, shoppers usually blend in to the store being evaluated as regular shoppers. They may sometimes be required to take photographs or measurements, return purchases, or count the number of products, seats, people during the visit. A timer or a stopwatch may be required. In some states in the USA, mystery shoppers must also be licensed as private investigators in order to perform some of the tasks.
After the visit the shopper submits the data collected to the mystery shopping company, which reviews and analyzes the information, completing quantitative or qualitative statistical analysis reports on the data for the client company. This allows for a comparison on how the stores or restaurants are doing against previously defined criteria.

STATISTICS

The mystery shopping industry had an estimated value of nearly $600 million in the United States in 2004, according to a 2005 report commissioned by the Mystery Shopping Providers Association (MSPA). Companies that participated in the report experienced an average growth of 11.1 percent from 2003 to 2004, compared to an average growth of 12.2 percent. The report estimates more than 8.1 million mystery shops were conducted in 2004. The report represents the first industry association attempt to quantify the size of the mystery shopping industry. Similar surveys are available for European regions where mystery shopping is becoming more embedded into company procedures.
As a measure of its importance, customer/patient satisfaction is being incorporated more frequently into executive pay. A study by a U.S. firm found more than 55% of hospital chief executive officers surveyed in 2005 had “some compensation at risk,” based on patient satisfaction, up from only 8% to 20% a dozen years ago.
CBC Television’s news magazine program Marketplace ran a segment on this topic during a January 2001 episode.