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Secret shoppers know what’s in your store


Owners who use secret shoppers should only do so if they’re ready to take action on what is uncovered, experts say.

A customer of a fast-food chain recently waited at a counter for two-and-a-half minutes while three employees held an animated conversation instead of taking her order.

Had she been an ordinary customer, she would have walked out. But she was a mystery shopper, sent to the restaurant to assess its customer service, and she videotaped every second of their talk.

Jonathan Przybyl, president of Eagle Eye Retail Intelligence, the Gilbert, Arizona-based company that sent her there, says, “The client is a well-respected brand in the Southwest and they knew this particular location was struggling. But until they saw the video, they had no inkling this detrimental behavior was going on.”

Mystery shopping has been practiced since the 1940s as a way for companies to see how their customers perceive their products and services.

Franchisors and multi-unit franchisees use secret shoppers to assess customer service and consistency across their locations. But some mystery shopping programs are not as beneficial as others. We asked mystery shopping company owners, association leaders and secret shoppers how franchisors can gain more from their services.

“There’s no sense in launching a mystery shopping program if you are not ready to take action on what it uncovers,” said Pamela Olmstead, of Mission Viejo, California, co-founder and president of the Independent Mystery Shoppers’ Coalition.

For example, she said many franchisors and multi-unit franchisees of fast-food restaurants begin drive-thru window shops with “incessant timings of how long it takes to drive from the entrance to the ordering podium to the window. Unless you are specifically gathering that information for something, focus on areas that are important, like customer service.”

Przybyl said the chain with the chatty counter staff used the mystery shopper’s video in employee training sessions. COO Jennifer Yiangou said consistency is crucial for her company, Anytime Fitness in Hastings, Minnesota, because members can use any of the company’s 3,000 gyms around the world. If a mystery shopper finds a gym out of compliance with Anytime’s policies or procedures, “a letter will be sent to the franchisee recapping the shop and an action item list with deadlines will be provided,” she said in an email.

Anthony Russo, CEO and founder of Russo’s New York Pizzeria in Houston, said he mystery shops all his chain’s franchised and corporate stores each quarter. “When we started this, we had reports about cashiers who just stood there instead of welcoming customers. We actually wrote scripts for them and their mystery shopping scores quickly improved.”

Spend time selecting the right mystery shopping company, advised Rich Bradley, president of the Mystery Shoppers Providers Association of North America in Orlando.  A directory of his association’s 160 members allows you to sort them according to their specialties, from fine dining to carpet cleaning.  You can find several hundred more non-member companies on the internet. Contact two or three companies that serve clients from your industry and ask for proposals, Bradley said. The mystery shopping industry has no set pricing and “the low bidder might not be the best,” he added.

Then design a shop that’s not too daunting and plan to pay rates within industry standards. Since mystery shoppers pose as regular customers, they are expected to order something from your menu, buy something off your shelves or invite your employees into their homes to provide services.  

The price of each shop includes their reimbursements, said Tom Mills, CEO of HS Brands, a mystery shopping company in Taunton, Massachusetts.

Thus, a fast-food shop might cost $25 to $40 a visit while a fine-dining visit can run $80 to $150. “The majority of shops are lower paying,” Olmstead said, with shoppers receiving $3 to $15 above their expenses for a fast-food or grocery shop.

“The better the perk is to the shopper, the lower the amount of money we have to pay them,” said David McAleese, CEO of A Closer Look, based in Norcross, Georgia. “I’d certainly take a lower amount if someone was paying for the nice meal I’m eating out with my wife. And I’d be happy to spend another 15 minutes writing up a report of our experience.”

That approach can backfire if the report the franchisor or multi-unit franchisee requires takes hours to write and file on the mystery shopping company’s website.   “Some shops require extreme details,” said Dana Kern, of Kailua Kona, Hawaii, who spent five years as a mystery shopper in the San Francisco area. “One report for two nights in a hotel,” she said, “took me about eight hours to write and the shop was not worth it.”

Anyone can sign on to be a mystery shopper, but most shoppers sign on with several companies and about half that sign up only do a shop or two, then disappear.

Smarter shops

1. Consider video shops, which used to be expensive, but are getting easier and cheaper. Pamela Olmstead said that on a recent shop, a male cashier wore a nametag that said ‘Eileen.’ “If I were doing a video shop, the client would be able to figure out who he was and why he was wearing the wrong nametag,” she said.

2. Be aware that some states require consent from your franchisees and/or employees for video or audio recordings. Include consent forms in all your franchisee agreements and employment documents.

3. Mystery shops must be applied equally to all your franchisees; using them to check up on only problem operators may be illegal, according to a session on “The Ethics of Mystery Shopping” held at last May’s International Franchise Association Legal Symposium.

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