A Guide to Mystery Shopping

Customer Service can be divided into two elements - the tangible (such as telephone answering times, delivery when promised) and the intangible (how the customer feels about doing business with you).

If you can't deliver when you say you will, or your telephone is constantly engaged, you have a fundamental customer service failure which clearly needs fixing as a high priority.

Fortunately, these tangible elements are measurable (although it isn't always particularly easy) so it is possible to keep track of how you're doing.

It's the intangible which are more difficult - both to define and to measure. That's partly because they tend to be relative - relative to your customers' expectations. For example, if your industry has a reputation for rudeness and your staff can avoid being actually rude, you might still be the industry leader!

On the other hand, if you've told everyone what a great customer service you offer (even though all your competitors are acknowledged to be lousy) you can still generate ill-feeling if you ever fail to meet those expectations you've raised.

Having your customers consistently rate your service 'excellent' isn't good enough if they're rating your chief competitor 'outstanding'.

 

The Competitive Edge

Faced with a situation where your product or service isn't greatly different from that of your competitors and you don't want to risk a price war which lowers your profitability, it is worth looking at ways in which you can make the quality of your customer service better than that of your competitors.

The advantages are that quality in customer service doesn't always cost more and that it is often something which isn't easy for a competitor to copy.

Quality of customer service tends to be more important to a customer than many other features of a product - even price. Indeed many profitable firms rely on their reputation for good customer service to sustain a price differential over their competitors.

 

The Customer

Generally, retail customers won't tell you if your product isn't right or they are dissatisfied - they'll simply go elsewhere. A recent TARP survey showed that 90% of dissatisfied customers do not make a complaint.

Retail customers have an even more distressing habit - that of appearing to be satisfied because they do not want the unpleasantness of a complaint. It is, after all, human nature to avoid public confrontation. They may even behave as if they are pleased with the most appalling service, and may go as far as giving staff tips and compliments to avoid unpleasantness.

However, although they may be reluctant to tell you or your staff, you can be sure they'll tell just about everyone else! If it makes a good story, they may even tell it for years.

The trade customer is even more influenced by your customer service. Many companies have a relatively small trade customer base, so that each customer accounts for a larger proportion of sales.

Repeat orders therefore form a large proportion of the business and a loss of a single customer to a competitor can in these circumstances be very serious. Generating customer loyalty through a high quality of customer service can make all the difference.

Customer service quality is intangible - and therefore tends to be difficult to measure. There are of course many well-known traps. Complaint and compliment rates can lead to a false sense of security, if nine out of ten dissatisfied customers don't complain. Telephone answering times are irrelevant if the quality of the response is poor.

Delivery targets are important, but the quality of the experience (convenience, packaging, ease of unpacking and assembling etc) may be even more important. Admiration from customers for your new waiting room is of little benefit if at your competitors' establishment they are never kept waiting.
There are a number of specific reasons for measuring your customer service.

Probably one of the most important is to identify trends. If for some reason your customer service levels are deteriorating, you need to know before your customers perceive there is a problem.

There is usually a significant delay between service levels falling and customers noticing, and even between customers noticing and customers taking their business elsewhere. Indeed, it may take some time before a definite trend of falling orders is identified by the company.

Once such a trend has been identified, corrective action takes time, as does regaining the confidence of customers. With a continuous monitoring programme you can detect and correct service shortfalls well before they become a problem.

Another reason for measuring your customer service is to enable it to be benchmarked against your main competitors. Mystery shoppers are particularly useful for making objective comparisons between your service and that of your competitors.

 

Measuring the 'Gap'

Most organisations have a 'Gap' - the difference between the promise and the actual delivered performance. Some organisations may be so totally in control of their own circumstances that the gap is very small, but some organisations may be much less in control of their environment - airlines, railways and bus companies for instance are at the mercy of events they cannot control such as weather, accidents and route closures or diversions.

Most organisations involved in customer service have to rely on people to deliver that service - and people being only human do not always perform to specification.

Customer service measurement is largely about measuring the 'Gap'. It can be the gap between corporate standards, between delivered standards and customer expectations, industry or legal regulations or your advertised standards.

It is often impracticable or uneconomic to eliminate the 'Gap' entirely, so it needs to be identified and measured so that it can be managed.

Managing the 'Gap' may include proactive customer relations, empowerment of local staff to take extraordinary action or fallback operational arrangements such as relief buses or standby trains.
But if the 'Gap' isn't monitored or measured it can't be managed.

Mystery Shopping is the evaluation, measurement and reporting of customer service standards by use of agents acting as if they were customers. It is arguably the fastest and most effective method of obtaining hard objective management data about customer service levels.

There are several types of Mystery Shop. The most common is where agents visit a client's retail premises to make an evaluation. Another type is where agents report on a clients telephone response in a variety of situations such as a call from a prospective customer or to a telephone complaint. A third type is where a home service is being offered (e.g. carpet and upholstery cleaning) where the client's staff visit the agent's home to provide the service.

IT MAY BE APPROPRIATE AT TIMES FOR MORE DETAILED EVALUATIONS TO BE CARRIED OUT BY A SPECIALIST CUSTOMER SERVICE CONSULTANT OR AN EXPERT IN THE PARTICULAR INDUSTRY.

 

Why use Mystery Shoppers?

Mystery shoppers give you the advantage of a unique form of customer feedback. Consumer research using customers will give you a high quality of data but at the cost of a significant amount of money. It will give you the hard data which is often needed to manage your business.

For example:

  • Does the retailer recommend our product to a customer?
  • Is our product displayed prominently, or as we specify to our representatives?
  • Do our home visiting salesmen research the prospective customer's needs before launching into a sales pitch or a particular model?
  • Do our franchisees offer to do the job cheaper for cash?
  • How do our retail outlets compare with that of our main competitor?
  • What do they do well that we could copy?
  • How many of our products are on display in a retail outlet and at what price?
  • Are our installation contractors meeting our agreed service standards, or are they letting us down?
  • Which of our branches offers the best customer service and what is the worst?
  • How did last quarter's service measures compare with this quarter?
  • Are we meeting our customer service targets? If not where is the shortfall?
  • How quickly are our telephone sales lines answered? How often are they engaged?

Mystery Shoppers can carry out an audit of your customer service operation. 'Mystery Shopping' involves regular sampling of your service, with a report of each survey as well as periodic summaries of what we have found.

We have a large number of agents spread over Great Britain who are able to sample your customer service. We have quality procedures in place to ensure that we in turn provide you with the best possible service.

We carry out sampling visits to your retail outlets, we will sample your telephone response services and we can sample services which are provided at the homes of our agents.

If your typical customer has a very unusual profile, or the service you provide is extremely expensive, we can arrange to recruit your own prospective or existing customers to carry out our surveys.

The benefits to you are:

  • cost-effective method of monitoring your customer service standards
  • an efficient way of identifying staff in need of further training
  • a regular summary of strengths and weaknesses which can be your action plan
  • An effective deterrent against dishonesty, poor service or bad practice
  • a way of identifying retail outlets which are under-performing

For sales operations, our agents can ensure that your sales representatives are not only complying with any legal requirements but also with your own policy guidelines.

For franchisors, Mystery Shopping not only ensures that your franchisees are maintaining the service standards you have set but also that they are conforming with other conditions of their contract.

 

The Benefits

Research shows that it is the quality of human interaction which has the greatest effect on customers' perception of a company. Therefore where there is little difference between competing products or services, quality customer service can give the competitive edge.

High customer service standards enable many firms to charge a premium for their products. Yet in many ways, good customer service can be a nil cost item. So improved customer service is one route to increased profitability.

Repeat business is another key profit-maker. Repeat business comes from ensuring customers are genuinely completely satisfied with - and preferably pleasantly surprised by - the quality of your product. Repeat sales save unnecessary expenditure on advertising and promotion to attract new customers.

It is possible to predict that as standards of living rise, the more quality, convenience and service will become important relative to price. An investment in a strategy of quality customer service now is therefore an investment in greater future profitability.

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