Five Reasons Why Mystery Shops Don’t Work in Retail

August 23, 2016

Five Reasons Why Mystery Shops Don’t Work in Retail

Since the 1940s, retailers have used mystery shoppers as a tool to evaluate and refine their customer service strategy. Touted as a way for upper level managers to find out exactly what their customers were experiencing, retailers have made mystery shopping a $1.5 billion industry that has spawned hundreds of mystery shopping companies that employ an estimated 1.5 million secret shoppers.

However, if you’ve ever commissioned a mystery shopping study, you already know what hundreds of retailers suspect: Mystery shopping is an outdated way to evaluate retail stores.

1. Mystery Shopping Doesn’t Measure What’s Important in Retail

A group of mystery shoppers can tell you how many size eights were on the sales floor, whether they offered a store card and how clean the dressing rooms were. In some ways, this information can be useful, but a positive checklist of quantifiable store attributes can’t give you a useful understanding of how your desired customers assess your store.

Many mystery shopping companies try to design surveys that measure subjective characteristics of the customer service shoppers receive. They’re rarely successful because the success of your retail store is often based on the full customer experience. This experience is the aggregate of multiple visits, customer service calls, emails and other ways the customer interacts with a retailer. Marketing experts have found that businesses cannot focus on a few positive touch points to retain consumers. Instead, your company must manage the overall experience if you want to increase customer loyalty.

2. Small Sample Sizes Diminish Data Usefulness

Imagine one mystery shopper reports that one of your sales staff was rude to her. How seriously should you take this shopper’s report? Ideally, each mystery shopper would be a completely objective professional who would give you the right information to act on this tip. In practice, mystery shoppers are fallible people who can sometimes give prejudiced information. Quality control is limited. Sometimes retailers turn to mystery shoppers outfitted with secret cameras, but the cost and time involved in that type of operation can be prohibitive for smaller companies.

No matter how professional the mystery shoppers are, each of them only represent a single data point of information. When you use only a few mystery shoppers, your data will be shallow, and it can be easy to draw incorrect conclusions.

3. Mystery Shoppers Can Be Prohibitively Expensive

For companies that want to reduce the chance of excessive bias from a small sample size, the solution is to hire a larger force of mystery shoppers. With a range of $50 to $500 per shopper, depending on the size of the survey and information required, hiring an adequate amount of shoppers can be overly expensive. By comparison, post-transaction interviews cost approximately 25 percent of the fee for a mystery shopper. Internet surveys cost even less and can reach a larger segment of your customer base.

4. Mystery Shoppers May Not Match the Ideal Customer Profile

Despite the thousands of dollars it requires to successfully fund a mystery shopping campaign, only a small fraction of that budget is paid to the actual mystery shoppers. Most mystery shoppers you’ll hire signed up with a mystery shopping company as a way to supplement their income. This means that the typical retailer mystery shopper is a retiree, stay-at-home mother, student or other person who isn’t currently part of the job market.

If you’re like most retailers, these shoppers don’t match with the ideal customer profile your company developed as a marketing tool. Therefore, if your company asks subjective questions on your shopping survey, you’re likely to get information from mystery shoppers that doesn’t align with the perceptions and goals of your target market. Your store may be effectively courting your desired audience of established urban professionals, but may be off-putting to the stay-at-home mom or senior mystery shopper.

5. New Technology Makes Mystery Shoppers Obsolete

Mystery shopping was developed as a way to understand how your business is perceived by customers. Prior to mystery shopping, there was no accurate way to evaluate how your employees served your customer base. Customers who received poor service may have contacted your company to complain, but you’d also lose their business if your company didn’t correctly address the problem. One survey estimated that 89 percent of customers who had a negative experience with a company switched to a competitor.

Now technology has changed how customers can relay their experiences to your company. Social media allows customers to tweet or Facebook their concerns directly to customer service. Plus, modern consumers are more comfortable sharing their thoughts and providing feedback directly to companies — 24 percent of American customers in 2010 reported leaving reviews or feedback online.

Technology also allows you to collect better data from customers through post-transaction surveys. An anonymous survey, conducted from the privacy of your customer’s computer, can yield a wealth of information of data about customer service, marketing and overall retail impressions. A small incentive, such as a gift card or discount, can increase the amount of responses from your customer base.

Like many other retail strategies, mystery shops are quickly becoming a relic of pre-internet marketing research. The rise of enterprise feedback management providers indicates that determining your store’s customer service quality through the proxy of mystery shoppers is no longer necessary. Instead, your company should work on connecting directly with the customer base it serves — no secret cameras required.

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